The Tech Week that was.. Aug 5~9
Welcome to the latest edition of my weekly newsletter bringing you all the global key semiconductor and technology news from last week in one easy read.
Happy Birthday to Singapore as the city state yesterday celebrated its 59th Birthday. Singapore’s semiconductor scene has been positively booming recently, benefitting as a stable manufacturing country in the current geopolitical environment, with a skilled workforce, stable utilities supply and free from natural disasters. Singapore is already home to 9 of the top 15 semiconductor firms and accounts for 5% of global wafer fab capacity and 20% of global semiconductor equipment production. Companies include Micron and GlobalFoundries who have both built in recent years new Fabs to increase capacity here.
In the last 3 months alone of 2024 there have been numerous positive semiconductor news headlines.
In May UMC celebrated the move-in of the first equipment for it’s new US$5billion phase 3 wafer Fab at it’s Fab12i site in Singapore. The new 300mm wafer Fab will manufacture 22nm & 28nm technologies with a monthly capacity of up to 30,000wafers.
In June
In July the Governments industrial planner JTC announced it is preparing to allocate 11% more land in Singapore wafer fabrication parks to attract more leading semiconductor companies to Singapore. The new plot in eastern Singapore will be ready by the end of the year
In Foundry and OSAT revenue news..
Chinese foundry SMIC reported Q2 revenue of US$1.9billion, up almost 9% sequentially and up 22% YoY as wafer shipments increased 18% sequentially to 2.1million 8” equiv wafers, though blended ASP dropped -8% due to intense local pricing competition. The company expects ASP to recover in Q3 as 12” capacity that came on line in Q2 improves the product mix. Fab utilization was 85% in Q2, it’s highest utilization in the past 7 quarters. For the 1st half 2024, revenue was US$3.7billion, up 21% compared to 1st half 2023. SMIC expects revenue to grow 14% sequentially in Q3 driven by strong local demand.
SMIC said it is expediting it’s capacity expansion plans as some customers have won new opportunities due to geopolitical induced changes in the supply chain. SMIC will add an extra 60k 300mm wafer/month capacity by December, around 33% more than it’s original plans.
US foundry Globalfoundries (GF) reported it’s Q2 earning this week, reporting revenue of US$1.6billion, up 5% sequentially but down -12% YoY. GF saw growth in it’s smartphone business, but a decline in home and industrial IoT segments. Automotive was flat, though GF expect automotive revenue to grow in 2024. For Q3, GF is forecasting revenue to grow slightly to just over US$1.7billion.
Last week, Taiwan’s semiconductor manufacturers reported their July revenue data, with generally very positive news.
TSMC reported record revenue in July of US$7.9billion up 24% sequentially and 45% YoY due to increased demand from major clients like Apple, Nvidia, Qualcomm and Mediatek on advanced nodes. For the year date revenue in NT$ is 30% higher than the same period in 2023.
Taiwanese pure-play foundry United Microelectronics (UMC) reported it’s July revenue grew to a 19-month high of US$644million. This represents a sequential increase of 19% and a year-over-year increase of 9.6%. The company's revenue for the first seven months of 2024 totaled NT$132.33 billion, up 2.1% from the same period a year earlier.
Taiwans 8” foundry specialist Vanguard International Semi (VIS) reported July revenue of US$109million, down -13% sequentially and down -1% YoY. For the year to date revenue was US$747million, up 12% compared to the same period in 2023.
Leading OSAT ASE reported July monthly revenue of US$846million for its ATM group which includes OSAT’s ASE & SPIL, up 4.7% sequentially and down -2.4% YoY, the decline mainly due to exchange rate effects.
Taiwan wafer substrate manufacturer GlobalWafers has forecast it’s revenue will drop high single digit percentage this year compared to 2023 as customers undergo a lengthy inventory correction cycle. Previously the company forecast 2024 would be flat. Globalwafers said it expected the inventory correction to end by the end of 2024 and would grow again in 2025. GlobalWafers reported that revenue dropped -17% in 1st half 2024 to US$930million, and expected revenue to be approx. flat in the 2nd half. The company said demand for 12-inch wafers has been strong lately and demand for 8-inch wafers is recovering, while there are no signs of further deterioration for 6-inch wafers.
Globalwafers also announced it plans to buy land and buildings in Malaysia for US$33million to cope with future customer demand.
In other semiconductor financial news..
Infineon reported revenue of US$4billion for fiscal Q3’24, the quarter just ended. This was up 2% sequentially and down -9% YoY. Chief Executive Jochen Hanebeck "The recovery in our target markets is progressing only slowly. Prolonged weak economic momentum has resulted in inventory levels in many areas overlaying end demand." Infineon is forecasting fiscal Q4 revenue will be around US$4.4billion, as they expect the worst of the inventory correction is over. For the full year Infineon forecasts revenue will US$16billion.
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After the call Infineon announced it would cut 1,400jobs worldwide and relocate a further 1,400 positions to countries with lower labour costs as part of it’s “Step Up” cost savings program.
NAND flash maker Kioxia reported record revenue of US$2.9billion in fiscal Q1 2024, up 106% sequentially for the quarter just ended, due to increased ASP’s and shipments as the flash memory market recovers. Kioxia recently announced that it has completed the construction of its new K2 Fab in Iwate Pref, Japan in July. Kioxia will gradually make capital investments in the Fab watching the Flash market trends carefully, with the target to start production in the fall quarter of 2025.
In other semiconductor industry news…
ASE announced it plans to spend US$162mililon to fully acquire a facility in Kaohsiung, Taiwan from Hung Ching Development and Construction Co. ASE jointly built the facility called K18 with Hung Chin and currently owns a 25% share in the Fab. ASE intends to purchase the facility to expand advanced production capacity and plans to add bumping and flip-chip packaging capacity at the K18 fab.
TSMC plans to break ground for it’s new European Fab, ESMC (European Semiconductor Manufacturing Company) in a ceremony in Dresden on 20th August. The new facility is expected to start production by late 2027, targeting a monthly capacity of 40,000 wafers by 2028. TSMC is gearing up for a major recruitment drive in November, seeking to attract top global engineering talent to staff the new plant.
Infineon officially opened it’s new 8inch SiC Fab, Kulim3, in Kulim, Malaysia, this week with a ceremony attended by Malaysian Prime Minister Anwar Ibrahim. The opening of the US$2billion 1st phase is part of a total US$7billion project to build the worlds largest 8”SiC plant for power semiconductors, when the 2nd phase is complete.
SK Hynix is the latest beneficiary of CHIPS act funding for it’s new advanced packaging R&D facility in Indiana, USA. The U.S. Department of Commerce announced this week that it will provide up to US$450 million in incentives and US$500 million in loans to SK hynix in return for the chipmaker’s construction of its US$3.9billion memory packaging plant in Indiana.
Equipment manufacturer Applied Materials has reportedly had it’s CHIPS Act funding application rejected by the Department of Commerce for it’s proposed new US$4billion R&D facility in Silicon Valley, California as it did not meet eligibility criteria according to reports by Bloomberg.
According to Digitimes TSMC has notified customers of a 3~8% wafer price increase for it’s 3 & 5nm technologies, as well as raise it’s CoWoS advanced packaging quotes to reflect escalating costs and preserve it’s long term gross margin of 53% or higher.
In market research news…
Global semiconductor industry sales totaled $149.9 billion Q2 2024, an increase of +18.3% compared to the Q2 2023 and +6.5% higher sequentially according to the latest data from WSTS. SIA President and CEO John Neuffer said “The global semiconductor market remained strong during the second quarter of 2024, with quarter-to-quarter sales increasing for the first time since the fourth quarter of 2023.” Sales in June 2024 were $50.0 billion, an increase of +1.7% sequentially, with the America’s leading the growth in sales.
McKinsey published a guide to navigating the complexities in the silicon carbide market. The report highlights that whilst there is uncertainty in how the speed of market will evolve, it concludes demand will grow and remain robust. It notes that the SiC industry is proactively addressing new demand and there will be intense competition moving forward for the current incumbents from emerging new suppliers, and the incumbents need to move to 200mm (8”) wafers to be able to gain cost advantages to maintain their technology leadership.
That's all for this weeks Singapore Birthday special edition. If you enjoyed the newsletter, please “like” or “share” the article and if you have not already done so, why don't you subscribe and automatically stay up to date with all the industry news in your inbox.
Stay safe and healthy... bye
Long may the geopolitical situation continue to encourage semiconductor growth in Singapore and rest of Asia