The Tech week that was... May 6~10th

The Tech week that was... May 6~10th

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 earnings news..

Chinese foundry SMIC reported Q1 revenue of US$1.75billion, up 20% YoY and up 4% sequentially due to strong demand from Chinese customers.  Wafer shipments were up 7% to 1.79 million 8" equivalent wafers with Fab utilisation at 81%. The company forecasts revenue will grow 6% in Q2.  SMIC further indicated that, assuming no significant changes in the external environment for the full year, the company’s goal is for sales revenue growth to exceed the industry average.  SMIC’s Q1 revenue beat GlobalFoundries and UMC, making it the 2nd largest pure play foundry behind TSMC.

US foundry GlobalFoundries reported Q1 revenue of US$1.55billion, declining -16% YoY and down -16% sequentially.  GlobalFoundries said that certain end markets like IoT and automotive remain challenged, mostly related to macroeconomic conditions and the rate of inventory reduction is much slower than anticipated as we began 2024.  Q1 shipments were down -9% YoY and utilisation levels were in the low to mid 70% level.  GF is forecasting a midpoint Q2 revenue of US$1.62billion.  In 2024 Capex spend will be US$700million.

European foundry Tower Semiconductor reported revenue of US$327million in Q1, down -8% YoY and down -7% sequentially due to large declines in power management and automotive chips. Tower see Q1 as having been a low, with some growth coming up beyond that.  Tower is forecasting 7% sequential growth for Q2 to US$350million and then "notable growth" in the third and fourth quarters.

In other industry news..

It is reported by Reuters this week that Intel and Qualcomm have had some licences revoked by the US Commerce Department to ship chips used for laptops and handsets to sanctioned Chinese telecoms equipment maker Huawei Technologies.  The move comes after the release last month of Huawei's first AI-enabled laptop, the MateBook X Pro powered by Intel's new Core Ultra 9 processor which angered some US lawmakers.  Intel has warned it’s sales would be hit and drop below it’s midpoint projection.

US High Voltage IC manufacturer Power Integrations this week announce d it will acquire Odyssey Semiconductor Technologies, a developer of GaN technologies for an undisclosed fee.  

In market research news..

According to the latest report from the Semiconductor Industry Association (SIA) and the Boston Consulting Group,  the U.S. share of global Fab capacity will grow to 14% by 2032 up from the current 10% today, as US Fab capacity will almost triple thanks to government programs like the CHIPS and Science Act.  U.S. capacity for advanced logic will grow from 0% in 2022 to 28% by 2032 as the US will secure 28% of global capex, approx. US$646billion between 2024 and 2032, second only to Taiwan. Interestingly they predict that South Korea’s share of sub 10nm technology capacity will drop from the current 31% to less than 10% by 2032 as major players like Samsung Electronics and SK Hynix have chosen to establish their latest factories in the US.

Worldwide sales of semiconductors totalled US$137.7 billion in Q1 2024, up  +15% YoY  but down -5.7% sequentially.  Sales for the month of March 2024 decreased -0.6% compared to February 2024 according to the latest analysis from WSTS. SIA president and CEO, John Neuffer said “First-quarter global semiconductor sales were significantly higher than the total from the first quarter of last year, but sales slipped somewhat on a month-to-month and quarter-to-quarter basis, reflecting normal seasonal trends.” “The market is expected to continue to grow during the remainder of the year, with double-digit annual growth projected for 2024.” Regionally in Q1, China and the Americas grew 27% & 26% YoY respectively, whilst Europe and Japan both declined.

Global semiconductor materials market revenue contracted -8.2% to $66.7 billion in 2023 according to the latest data from SEMI.  Wafer fabrication materials revenue declined -7% to $41.5 billion, whilst packaging materials revenue fell -10% to $25.2 billion last year.  Silicon, photoresist ancillaries, wet chemicals, and CMP segments logged the biggest contractions in the wafer fabrication materials market. The organic substrates segment accounted for much of the packaging materials market contraction.  South Korea recorded the biggest decline due to the weak memory market.

To end this week here an interesting opinion piece about the reported clash of cultures at TSMC’s Arizona Fab and draws parallels to how the Japanese dominance of the automotive industry in the 80’s and how the US learnt to adapt.  Let me know what you think.

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

Stay safe and healthy... bye

 

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