The Tech week that was... July 29~Aug 2

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. 

In Semiconductor Revenue News..

Intel announced plans to cut 15,000 employees worldwide, as part of a US$10billion cost reduction plan after reporting worse than expected results. The >15% headcount reduction in workforce will be completed by end of 2024, whilst other cost reductions will be completed by end of 2025.  Intel reported revenue declined -1% YoY to US$12.83billion in Q2, this was up 1% sequentially.  Intel reduced their forecast capex spend for 2024 by -20% to approx. 26billion due to softer 2nd half demand and lower TAM in 2024. Intel foundry delivered US$4.3billion, down -1% sequentially and up only 4% YoY. Intel forecast Q3 revenue at a midpoint of US$13billion due to weaker than expected spending across consumer and enterprise markets, especially in China.

Qualcomm reported FY Q3 revenue of US$9.4billion, up 11% YoY, and flat sequentially. Smartphone revenue increased 12% YoY due to higher sales of processors and modems.  Qualcomm forecasts midpoint revenue for the coming quarter  FY Q4 will be US$9.9billion.  

AMD reported Q2 revenues of US$5.8billion, up almost 9% YoY and up 7% sequentially due to strong AI sales and also a recovery in the personal computer market.  AMD forecast Q3 revenue of US$6.7billion, up 16% sequentially, and they increased their forecast for full year AI revenue to US$4.5billion, up 12% from it’s previous forecast.

 Foundry and OSAT revenue news…

Taiwan foundry UMC reported Q2 revenue of US$1.7billion, up 4% sequentially and flat YoY. UMC said that it expects “to see a mild pickup in communications, consumer and computing segments”, however they “have not seen signs of a strong rebound yet as customers remain prudent in managing their inventories,”  Automotive remained soft in Q2 and this is expected to continue into Q3. UMC forecasts wafer shipments to increase 5% in Q3 with stable ASP indicating a 5% growth in revenue in Q3. Factory utilisation rates are expected to increase to 70% in Q3 from 68% in Q2. UMC’s new Singapore fab is on schedule to enter production in Jan 2026 reaching high volume production in 2nd half 2026.

Foundry Tower Semiconductor reported Q2 revenue of US$351million, up 7% sequentially. The main growth drivers were RF infrastructure and silicon photronics Tower is predicting revenue of US$370million in Q3, a further growth of 5.5%. 

US OSAT Amkor reported revenue of US$1.46billion in Q2, up 7% sequentially and flat YoY.  Q2 earnings were up driven by strong growth from advanced packaging supporting premium tier smartphones and AI solutions utilizing 2.5D technology, though this was partially offset by soft demand in Automotive & Industrial and Consumer end markets. For Q3 they are forecasting midpoint revenue of US$1.84billion, up 26% sequentially with the increase primarily driven by advanced SiP products, supporting the fall launch of premium tier smartphones as well as a next-generation consumer wearable product.

 In other industry news..

British compound semiconductor wafer manufacturer IQE has announced it plans to IPO it’s Taiwan business on the Taiwan Stock exchange.  IQE will seel a minority shareholding and retain overall control of IQE Taiwan.

Belgium GaN chip manufacturer BelGaN has filed for bankruptcy after it failed to get further investment to support the transition from manufacturing traditional Si semiconductors to GaN chip for electric chargers and electric vehicles.  The company based in East Flanders in Belgium employs 440 people.  BelGaN was spun off from onsemi in 2022 as a GaN foundry after the parent company failed to secure a buyer for the CMOS power fab.

TSMC has made a statement indicating that ground breaking for it’s new European Fab in Dresden will take place on 20th August.  The new US$10.8billion Fab called European Semiconductor Manufacturing Corp. (ESMC) in Dresden is a joint venture with minority stakes held by Robert Bosch GmbH, Infineon Technologies AG, and NXP Semiconductors NV. TSMC holds a 70 percent stake.  Construction of the fab is set to begin by the end of 2024, with production targeted to start by the end of 2027.

 Infineon announced it has completed the sale of its two backend manufacturing sites to ASE. The sites,  one in Cavite, Philippines and one in Cheonan, South Korea, to two fully owned subsidiaries of ASE.  ASE will assume operations with current employees, with long-term supply agreements agreed between the companies.

The strike at Samsung Electronics by it’s largest union NSEU which started on 8th July continues into August but talks have resumed. The NSEU which members account for approx. 24% of Samsung’s total workforce is demanding a 5.6% basic pay raise for all members, a guaranteed day off on the union's founding day and compensation for economic losses due to the strike.

 In market research news..

Worldwide silicon wafer shipments in Q2’24 increased 7.1% compared to Q1 to 3,035 million square inches (MSI), however this was 8.9% lower than a year ago in Q2 2023. according to SEMI.  SEMI said tht whilst the silicon wafer market is being driven by demand for data centers and generative AI, the recovery is uneven across different applications.

IDC is forecasting that Generative AI (GenAI) smartphone shipments will account for 70% of the market by 2028.  They forecast shipments will grow more than 360% in 2024 to 234million units to account for 20% of the overall smartphone market.

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Stay safe and healthy... bye