The Tech Week that was... Feb 5~9th

Welcome to my weekly semiconductor newsletter and Happy Chinese New Year to all my readers.  The Chinese lunar year for 2024, which begins today, Feb 10th,  is the year of the wooden dragon, which is believed to be able to foster growth, progress and abundance.  In Chinese culture the dragon is related to success, intelligence and honour, whilst wood dragons are full of energy and dream of changing the world.  Let’s hope that the semiconductor industry grows this year.

In Financial news…

This week we saw some of the Q4’23 financial results of the non Taiwanese foundries and OSAT’s

China's largest foundry SMIC said that the global semiconductor industry was seeing some bright spots after a year-long slump, but growth would be mild as the demand recovery was insufficient to support a "strong and comprehensive" rebound.  SMIC as well as many other foundries saw a surge in orders from smartphone and personal computer manufacturers late last year, SMIC was cautious on whether this was sustainable.  SMIC reported that Q4 revenue of $1.6billion, up 3.6% sequentially and up 3.5% YoY. Revenue for the full year was US$6.3billion, down -13% YoY.  For Q1, they are forecasting flat to +2% QoQ growth.

Belgium foundry, X-Fab reported Q4 revenue of US$238million up 2% QoQ and 29% YoY as they saw strong growth in automotive, industrial and medical markets.  For the full year revenue was US$907million, up 23%, with automotive, industrial, and medical segments up 31% YoY and which accounted for 90% of sales.  X-Fab’s forecasts that Q1’24 revenue will be ~US$220million down -8% sequentially.  For the full year 2024 they predict revenue of US$935million at the midpoint, up 3% YoY.

US OSAT Amkor reported Q4 revenue of US$1.75billion, down almost -4% sequentially and down -8% YoY.  For the full year revenue in 2023 was US$6.5billion, down -8% compared to 2022.  For Q1’24 they are forecasting revenue of US$1.35billion, down -22% sequentially, as they a stronger than usual seasonal decline in Communications, together with weakness in automotive and Industrial end markets.

In other semiconductor news..

TSMC announced that it will build a 2nd Fab in Kumamoto Japan, scheduled to start production by the end of 2027 after Sony and Toyota announced further investment into TSMC’s Japanese subsidiary, JASM.  Construction will start at the end of 2024.  Once both Fab’s are completed they will offer a total production capacity of 100k 12” wafers per month, manufacturing technologies ranging from 40nm down to 6nm. 

The US government has announced plans to spend $11 billion on semiconductor-related research and development and said it was launching the $5 billion National Semiconductor Technology Center.

 In Japan, Kioxia and Western Digital announced that their joint venture manufacturing facilities at Yokkaichi and Kitakami plants have been approved to receive up to US$ 1billion in subsidies, including facilities that will produce its latest generation of 3D flash memory. The subsidy will be granted under a designated government program aimed at facilitating corporate investment in cutting-edge semiconductor production facilities and securing stable production of semiconductors in Japan.

The Japanese government also announced this week that it would invest up US$300million to the Leading-edge Semiconductor Technology Center (LSTC) for research into cutting edge semiconductor technology. LSTC is chaired by Rapidus Chairman Tetsuro Higashi and includes research institutions and universities.

 A court in Germany has issued an injunction against the sale of some of Intel's chips, in a patent dispute between Intel and California based R2 Semiconductor in a case involving voltage regulators.  The court ordered Intel to refrain from applying the patent in question in Germany.

In Market Analysis news..

 Global semiconductor industry sales totaled US$526.8billion in 2023, a decrease of -8.2% compared to the 2022 according to the latest data from WSTS (World Semiconductor Trade Statistics organization). However, sales in the 2nd half of 2023 picked up and Q4 sales were US$146billion which was up 11.6% YoY, whilst December sales were up 1.5% sequentially.   This rebound in 2nd half indicates that 2024 sales are expected to see 13% growth.  

Worldwide silicon wafer shipments decreased -14.3% in 2023 to 12,602 million square inches while wafer revenue was down -10.9% to $12.3 billion, according to the latest data released from SEMI. The decline, after three consecutive years of growth, was due to a slowdown in end-demand, coupled with a broad-based inventory correction. Softening memory and logic sector demand led to a decline in orders for 12-inch wafers, while weakening foundry and analog uptake accounted for a drop in shipments of 8-inch wafers.

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Stay safe and healthy... bye