The Tech Week that was... June 6~10

The Tech Week that was... June 6~10

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

Whilst demand is still strong in the semiconductor industry there are more and more signs that the chip shortage will ease in the 2nd half of 2022. 

Mercedes, Daimler and BMW have indicated that they are now getting enough semiconductors to produce at full capacity. Whilst Qualcomm CEO Christiano Arnon said that the chip shortage is likely to wane by late 2022 into early 2023, though he added that some segments may still see shortages until 2024. 

In other industry news..

TSMC has said that it has no concrete plans to build a Fab in Europe for now. Last year there was speculation that TSMC would build a Fab in Germany but it seems there has been no progress on this. TSMC has also said they are seeing higher than expected costs for it’s US expansion in Arizona, but have stated that they  “can handle it”.

TSMC has also reiterated that it expects to reach its 30% revenue growth target in 2022, as demand for automotive and high performance computing (HPC) chips remain high, despite the pressures from global inflation. With the demand for smartphones, PC and other consumer electronics reducing, TSMC is using the capacity to adjust its portfolio to support other high growth areas.

In an interview with Fortune, TSMC Chairman Mark Liu describes how TSMC is reimaging the semiconductor industry. He shares how energy efficiency in computing is driving technology advancement at a 2x every years pace, so he believes that technology will continue to advance like clockwork as it did over the past 50 years. He also feels AR/VR will be dominant in future but the current AR/VR devices need to improve by more 100x through continuous development of technology to make this happen.

Meanwhile Intel continues its expansion plans in Europe and is reported to be receiving $7.3 billion in subsidies representing 40% of the $19 billion cost of building two fabs in Magdeburg, Germany. Construction is scheduled to start next year with first silicon planned for 2027.

Intel is "pausing all hiring and placing all job requisitions on hold" in its client computing group, as it re-evaluates priorities due to macroeconomic uncertainty. The cost cutting measures also extend to a cancelling some travel and limiting attendance at conferences. Despite the freeze it will honour all existing offers and will onboard the 23,000 recently hired employees in the next 90 days.

US memory manufacturer Micron has started construction of it’s Fab in Taichung, planned to manufacture some of the most advanced DRAM manufacturing technologies, including its 1-gamma nm node DRAM process in 2024. It aims to hire. About 2,000 employees in the next 3 years for the Fab as it increases it’s workforce in Taiwan to ~12000 employees.

UMC is reported to be considering a 6% price hike for 22nm and 28nm chips in 2023 according to latest media reports. This follows reports that TSMC and Samsung are increasing prices for 2023.

 TSMC is filing more and more patents as it steps up efforts to upgrade its technologies and cement a lead over its rivals in the global market. According to the Taiwan Intellectual Property Office, TSMC filed 1,950 invention patents in 2021, a 78% increase from the previous year. In Taiwan , TSMC was the largest patent applicant in 2021 whilst in the US it was the 3rd largest. According to TSMC, more than 99% of its worldwide patent filings were approved in 2021, with this figure hitting 100% in the United States.

 The US International Trade Commission (ITC) has voted to launch an investigation into a patent infringement allegation against Taiwanese communication network IC designer Realtek and China based TCL. The companies are alleged to have infringed on patents from AMD and ATI.

The US CHIPS act legislation to boost US semiconductor manufacturing with US$52billion in funds is at risk of collapsing in Congress as midterm elections and the summer break approach. Senators are reported to be frustrated with the White house for lack of engagement.

In an effort to get the CHIPs act moving US senator Maria Cantwell will convene a classified briefing with Pentagon officials and Intel Corp's chief executive for lawmakers negotiating a compromise measure to provide $52 billion in subsidies for U.S. semiconductor manufacturing, sources told Reuters. The briefing will cover threats to national security-critical supply chains, with a focus on semiconductors, officials said, and will review their importance for defense systems and critical infrastructure.

Russia has limited exports on 3 key noble gases, neon, krypton and xenon, which are used in chip manufacture until the end of 2022. The export controls could worsen the global supplies after Ukraine one of the worlds largest suppliers of noble gases had to suspend production due to the war in Ukraine.  According to the Russian ministry, Russia account for 30% of global supply of the 3 noble gases.

In market research news..

Worldwide semiconductor revenue is expected to reach $661 billion in 2022, a 13.7% year-over-year (yoy) growth rate following a strong 2021, according to IDC. In 2021 industrial and automotive industries were strongest growing 30.2% and 26.7% yoy respectively. The leading growth applications were 5G phones, game consoles, wireless access points, datacenters, and wearables. These segments will continue to grow in 2022, but more moderately as a whole as consumer-facing markets begin to see a slowdown by the fourth quarter of the year. Samsung took the top semiconductor spot from Intel in 2021 due to very strong memory sales. The remaining top 5 companies were SK Hynix, Qualcomm, and Micron. IDC expects front-end wafer manufacturing to meet demand by Q3 2022,  but back-end assembly and test manufacturing and the materials supply chain will cause lead times to extend and cause shortages until the end of the year and into the first part of 2023.

Global semiconductor industry sales were $50.9 billion in April 2022, an increase of 21.1% yoy and 0.7% sequential increase, according the latest data released by SIA. “Global semiconductor sales have increased by more than 20% on a year-to-year basis for 13 consecutive months, indicating consistently high and growing demand for semiconductors across a range of critical sectors,” said John Neuffer, SIA president and CEO. US saw the highest growth in April increasing almost 41% yoy with Europe having the 2nd highest growth.

Analog IC sales grew 30% in 2021 to US$73.9billion according to the latest data from IC Insights. Texas Instruments maintained it’s grip on top position with 19% market share with sales of US$14.1billion, with Analog Devices in 2nd with 12% market share and Skyworks 3rd with 8% market share. The top 10 analog companies account for 68% of analog sales.

The top 10 global IC designers had a combined revenue of US$39billion in 1Q22, with 44% growth YoY. Qualcomm, NVIDIA, Broadcom took the top 3 positions with AMD overtaking Mediatek into 4th position, according to the latest data from Trendforce.

Over 20 semiconductor plants are under construction in Taiwan according to Nikkei with a total investment of US$119billion. TSMC has recently completed the construction of four new plants and is building four additional plants for 3-nm processes.

The global LED market grew 15.4% yoy to $17.65bn in 2021 according to TrendForce.   Nichia remained in to position followed by ams OSRAM and Samsung LED. LED manufacturers benefited from the rebound in market demand and showed significant revenue growth, with the top three manufacturers accounting for 29.5% of the market. The global LED market is forecast to maintain a growth trajectory in second half 2022, but at a slower rate than the growth performance in 2021.

Mckinsey looks at how the automotive market is coping with the chip supply shortage in its latest update. It reports that demand for semiconductors in 2020 and 2021 exceeded pre-pandemic forecasts in almost all industry segments so automotive OEM’s and Tier 1 companies are increasing competing with other industries for chips.

That's all for this week. If you enjoyed what you read, please “like” or share the article and if you have not already done so why don't you subscribe to my free newsletter and automatically stay up to date with all the industry news in your inbox.

Stay safe and healthy... bye.

Thanks again Mark for putting this comprehensive overview together

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