The Tech Week that was... Jan 24~28

As we enter the Year of the Tiger next week, Happy Chinese New Year to everybody, it looks like another roaring year for the semiconductor industry.  Catch up with all the key semiconductor and technology news from around the world in one easy read in the latest edition of my weekly newsletter

This week the US Department of Commerce released its results from its request last year for data from semiconductor companies on the the semiconductor supply chain. The findings show that existing semiconductor facilities are running at maximum utilization whilst demand is up 17% since 2019. At the same time inventory levels dropped from 40days in 2019 to less than 5 days in 2021 meaning that the supply is very susceptible to disruption from any incident in the supply chain. They expect chip shortages to persist into 2022 due to capacity constraints which can't be corrected in the short term.

 To help address the chip shortages, this week the US House of Representatives debuted the US Competes Act to move forward funding for domestic semiconductor manufacturing in the US. The bill includes US$52billion in funding for US semiconductor chip research and production. The bill moves forward the bill passed in the Senate last June known as the US Innovation and Competition Act but never moved into law. The House version retains US$52billion in funding for domestic semiconductor funding but removes US$200million in funding for US scientific research and technological innovation. The act is expected to pass before the end of March after which the House needs to come to agreement with the Senate on a compromised bill which then needs to pass before being sent to President Biden to sign into law.

In market research news..

Global smartphone shipments grew 4% yoy to 1.39billion units in 2021 according to the latest research by Counterpoint. Samsung lead the global smartphone market with annual shipments of 271million units. Apple, Xiaomi, Oppo and Vivo recorded their highest ever annual shipments as all the top 5 brands gained from the decline of Huawei and LG’s exit from the market. In Q4 global shipments declined 6% yoy to 371 million units as Apple overtook Samsung to become the top smartphone vendor in Q4 shipping 81.5million units, as it grew in key markets such as US, China, Europe and India. 

SEMI has reported that North America based semiconductor equipment billings grew in December 2021 by 46% compared to a year ago to US$3.92billion. After November’s record breaking billings, billings dropped slightly by 0.5% but were still the 2nd highest ever and the equipment market remains robust. Billings exceeded US$3billion every month last year for the first time.

IC Insights believes that the reason by the current automotive IC shortage is that demand surged for automotive IC’s in 2021 as automotive IC shipments grew more than 30% to 52.4billion units. This is 27% more than the amount of units shipped pre-pandemic in 2019, as suppliers ramped up IC supplies to the segment.

 In company news..

TSMC is rumoured to be looking for a location to build a new advanced IC packaging and testing plant in Taiwan with Chiayi County and Yunlin County the leading sites in southern Taiwan.  On hearing the news Chiayi County commissioner urged TSMC to choose it as it has land available after earlier this month a plan was approved to allocated 88hectares in Taibao city to set up a science park. TSMC has declined to comment on the report.

Malaysian foundry Silterra has said it will invest around US$155million to increase it’s 8” capacity by around 20% with the additional capacity scheduled to come online in early 2023. Silterra said it has set up long term supply agreements with ChipOne Technology (Beijing) and Taiwan-based ILI Technology, as well as other customers, to support its upcoming expansion project.

 Micron has announced it will close it’s DRAM engineering group in Shanghai by the end of 2022.  Moving forward the design centre will focus on developing NAND and SSD technology.

Lots of electronics companies reported solid financial results this week. As expected the results are very good, here is a flavour of some of them.

Apple reported Q1 revenue of US$123.9, up 11% from a year ago, with iPhone13 sales up 9% compared to 2020 as it took number one spot in China. Apple reported easing chip shortages as it used it’s buying power to navigate the supply chain better than it’s competitors. Intel reported record Q4 revenue of US$20.5billion, up 3% yoy, with full year revenue of US$79billion, up 1% yoy. Q1’22 revenue was forecast to be US$18.3billion. Samsung reported record revenue of US$63.7billion in Q4’22, up 24% yoy. For the full year revenue was US$232billion, up 18%due to strong sales of it’s smartphone business.   SK Hynix reported record revenue in 2021 of US$35billion as memory chip sales boomed. They see the supply chain issues gradually improving in the 2nd half of 2022. Texas Instruments reported Q3 revenue of US$4.64billion, up 22% yoy due to strong demand of industrial, automotive and personal electronics. The company forecasts that revenue for the current quarter Q4 will be around US$4.4billion.  STMicro reported Q4 revenue of US$3.56billion up 10% yoy, with full year revenue of US$12.76billion up 25% yoy. They forecast revenue will grow 20% in 2022. STMicro will spend around US$3.5billion in capex this year to expand capacity and open the 1st production line of the new R3 300mm Fab in Agrate, Italy.

Taiwan Foundry UMC announced it’s 4th quarter results reporting a 5.7% QoQ increase to US2.14billion and up 30% compared to a year ago. UMC reported full loading of all its Fabs as wafer shipments grew 1.7% QoQ,  with 22 and 28nm node technologies accounting for 20% of their revenue. 

Separately Taiwan's Intellectual and Property Court announced its ruling on the trade secret theft case brought against UMC. UMC was ordered to pay US$720k, with the fine subject to a 2 year probationary period. The case brought after UMC and three of its employees were accused of using Micron trade secrets to the benefit of the Taiwanese contract chipmaker. UMC hopes that with this ruling together with the settlement reached last November with Micron will close the case.

Mergers and Acquisitions

China’s market regulator has conditionally approved AMD’s US$35billion acquisition of Xilinx. The deal was approved on condition that AMD and Xilinx do not force tie-in sales of products or discriminate against customers that buy one set of products but not another. The approval moves the merger,  first announced in Oct 2021, closer to completion.

 With the increasing scrutiny from regulators around the world into it’s planned US$40billion acquisition of Arm, Nvidia is rumoured to be preparing to abandon it’s planned acquisition. The initial terms of the deal are set to expire after 2 years on 13th September, but is felt that the parties will not gain clearance by that date.

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Stay safe and healthy... bye.