The Tech week that was... Jan 29 ~ Feb 2

Welcome to the latest edition of my weekly newsletter bringing you all the key semiconductor and technology news from around the world in one easy read. 

In financial news..

 Taiwan OSAT ASE, said at its Q4 investor conference that they expect 2024 to be a year of recovery with growth accelerating in the 2nd half.  They expect the ATM group which includes OSAT’s ASE & SPIL to grow “at a similar rate with the [global] logic semiconductor market,” which is expected by most analysts to be in the high single digit % range. In Q1 2024 ASE expects it’s ATM group revenue to be flat at around US$2.3billion. 

UMC,  Taiwan’s 2nd largest foundry, said they are cautiously optimistic about 2024, but visibility is limited due to macro uncertainty.  They see lingering inventory issues for the automotive and industrial segments, with inventory levels for  PC and smartphones in the healthy level.  However the improved inventory levels have so far not translated into improved orders as customers remain cautious about restocking.  For Q1’24 they expect shipments to increase around 2~3%, but ASP will drop around -5% sequentially.   

Samsung electronics reported revenue of  US$51billion for Q4’23, down -4% YoY.  In Q4 Samsung saw some signs of recovery in the memory market as inventory levels improved and prices started to rise.  For the full year 2024 they expect the memory market to continue recovering, but they will selectively adjust production levels in the first half to manage inventory levels. For their foundry business they expect demand in Q1 to increase due to AI enabled smartphones and PC’s, and for the whole year they expect the foundry market to recover to 2022 levels due to recovery in smartphone and PC markets.

German wafer manufacturer Siltronic reported full year 2023 revenue of US$1.6billion, down -16% YoY as weak semiconductor demand due to high inventory levels impacted sales.  Construction of Siltronic’s new 300 mm fab in Singapore started in 2023 and is on schedule to start operations at the beginning of 2024.

Silicon Carbide (SiC) wafer manufacturer Wolfspeed reported revenue of US$208million for FY Q2’24 which just ended in December.  This was up 19% year on year.  For FY Q3’24 they are forecasting a midpoint revenue of US$200million. In FY Q3 the company sees revenue for power devices will be relatively flat, as increases in EV revenue supported by additional output from Mohawk Valley will largely be offset by lower industrial and energy revenue.

Qualcomm reported FY Q1’24 revenue of US$9.9billion, up 5% YoY, reflecting healthy Android demand and continued strong momentum in automotive.  Qualcomm estimate that global 3G,4G 5G handset units declined by mid-single-digit percentage in calendar year '23 relative to calendar '22.  For calendar year '24, we estimate that global handset units will be flat to slightly up on YoY basis.   For the coming FY Q2’24 quarter revenue they forecast revenue of US$9.3billion, the sequential decline due to seasonality.

In other industry news..

It is rumoured that the US Chamber of Commerce will announce major chip grants under the CHIPs and Science Act worth billions of dollars by early March to semiconductor chipmakers.  The grants are rumoured to be going to Intel, TSMC and Samsung amongst others that are setting up new US manufacturing Fabs.

South Korean chipmaker SK Hynix  is believed to have chosen the state of Indiana, U.S. for a site of it’s new advanced packaging plant but company says it had not made a final decision yet.

Intel is reported to be delaying the construction timeline for its $20 billion chipmaking project in Ohio amid market challenges and the slow rollout of U.S. grant money, according to the Wall Street Journal this week. Completion of the construction on the project is now expected to be delayed from 2025 to late 2026.

Digitimes reports that construction of Samsung Pyeongtaek Plant 5 (P5) in S Korea has been temporarily halted for inspection purposes, it is not clear how long the halt will last. There is speculation that the halt could be Samsung adjusting its construction and investment pace due to the current market slowdown.

SK Hynix is also reported to be slowing down construction of it’s M15X Fab in Cheongju, S Korea and has stopped work due to market conditions.  The planned restart is not determined.

In market research news..

Global semiconductor revenues declined -9% in 2023, with the memory sector suffering most due to weak demand and oversupply according to the latest report from Counterpoint.  Intel regained the top position in 2023 due to Samsung’s slowdown from the memory downturn.  Only 4 companies in the top 10 saw growth in 2023, with Nvidia growing 86% to move up to 3rd position due to AI, other companies showing growth were Broadcom, Infineon and STM.  Senior analyst Willian Li said “we believe artificial intelligence (AI server, AI PC, AI smartphone, etc.) will continue to be a major organic growth driver in the semiconductor industry in 2024, followed by the memory sector’s rebound due to normalizing oversupply situation and demand recovery. The automotive sector could be another driver for the market due to content growth, which was already a key revenue driver for Infineon and STMicroelectronics in 2023.”

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Stay safe and healthy... bye