The Tech week that was... Sept 5~9
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.
This week the Taiwanese foundries reported their monthly revenue for August 2022. TSMC and UMC both reported record monthly revenue, and TSMC reported they expect to be fully utilised until the end of 2022, however VIS and Powerchip are reporting lower revenues than they reported from the high point in Q2 as inventory corrections start to be seen.
TSMC reported record monthly revenue yet again in August up 17% sequentially and up 58.7% yoy reporting revenue of US$7.06billion. For the 8 months of the year to date TSMC has posted revenue of US$46billion, up 43.5% compared to a year before. TSMC said that they expect production capacity will be fully utilised until the end of 2022 and they expect to grow 34~36% in 2022. This comment was in response to earlier news reports that some of TSMC’s major customers, MediaTek, AMD, Qualcomm and Nvidia were scaling back their orders to TSMC due to inventory adjustments.
UMC also reported record monthly revenue in August, reporting revenue of US$821million, up 35% year on year and up 2% sequentially.
Specialist foundry Vanguard (VIS) reported revenue of US$161million for August, up 6.6% compared to July and up 23.4% year on year. Last month Vanguard said it expected Q3 revenue could fall 16% with factory utilisation to fall to around 83% as customers, particularly flat panel makers reduce inventory levels. They predicted Q3 revenue will fall to around US$436million down up to 16%, and expect Q4 to be lower as it will take between 2~4 quarters for customers to use the excess inventory.
Powerchip reported its lowest monthly revenue of 2022, reporting revenue of US$208million, down 4.5% sequentially but still up 10% yoy. For the year to date revenue was US$1.8billion, up 40% compared to the same period in 2021.
In other industry news..
Wolfspeed has announced it has selected Chatham county in North Carolina to build it’s next SiC materials manufacturing factory. The investment is intended to increase Wolfspeeds SiC production capacity by more than 10x. the facility will mainly produce 200mm SiC wafers and used to supply Wolfspeeds Mohawk Valley 200mm Fab which opened earlier this year. Phase one construction is anticipated to be completed in 2024 and cost approximately $1.3 billion. Between 2024 and the end of the decade, the company will add additional capacity as needed, eventually occupying more than one million square feet on the 445-acre site, creating 1,800 new jobs.
Skywater has announced it will use a US$36.5million grant from the Department of Commerce to expand its advanced packaging facility in Florida. The funds will be used to for the expansion and facilitization of the clean room and purchase and installation of tools and machinery for advanced packaging operations at the Center for Neovation
SK Hynix has announced it will break ground on it’s new M15X Fab in Cheongju, South Korea. Construction will be completed by early 2025 and SK Hynix will invest over US$10billion over the next 5years in the site. SK Hynix also has plans for a new M17 plant and will disclose details for the site construction after reviewing the overall business environment.
Intel officially broke ground at it’s new US$20billion Ohio Fab in a ceremony attended by Intel CEO Pat Gelsinger and US President Biden. In addition Intel intends to invest US$17.7million in STEM education investments in Ohio on eight projects from different research institutions to develop a local talent pool to help it staff both this Fab and other new Fabs around the country.
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Samsung has begun production in it’s new NAND Flash P3 Fab in Pyeongtaek, South Korea. The Fab is Samsung’s largest to date and will do sub 5nm technology using EUV litho. Samsung has also started foundation work for it’s P4 Fab on the campus. However at the press briefing Kyung Kye-hyun, CEO and president of Samsung's device solutions division, said that the chip industry has entered a down cycle and is facing various challenges, as the global economy has slowed and businesses tightened their spending. However he said that Samsung intends to turn this crisis into a good opportunity by continuing with consistent investment.
The US Commerce department published it’s implementation strategy for the CHIPS act to distribute the US$50billion fund from the act. The programs four primary goals are to (1) Establish and expand domestic production of leading edge semiconductors in the US (2) Build a sufficient and stable supply of mature node semiconductors (3) Invest in R&D to ensure the next generation semiconductor technology is developed and produced in the US (4) Create tens of thousands of good-paying manufacturing jobs and more than hundred thousand construction jobs.
China’s semiconductor imports continued to decrease in August. Chip imports in the first 8 months of 2022 were 370billion units, down 13% compared to the same period a year ago, however the value of these semiconductor imports was up 2.6% to US$277billion, due to price increases. China’s factory activity in August contracted amid weakening demand, while power shortages and fresh Covid-19 flare-ups disrupted production, according to the Caixin/Markit manufacturing purchasing managers’ index (PMI) survey, which slid to 49.5 in August.
In market research news…
TSMC is expected to take top position in Q3 for semiconductor sales as the memory market collapse will cause Samsung to drop to 2nd place with Intel taking 3rd spot in the latest update from IC Insights. They expect TSMC to post revenue of US20.2billion, up 11% qoq, whilst Samsung revenues is expected to drop -19% to US$18.29billion. For the full year IC Insights have reduced their global semiconductor sales growth forecast to 7% down from 11% almost entirely due to the memory market in the 2nd half of 2022.
Global semiconductor equipment billings rose to US$26.43 billion in Q2 2022, up 7% sequentially and up and 6% year on year according to the latest data from SEMI. Taiwan lead the spending accounting for US$6.68billion up 37% QoQ overtaking the spend of China which declined both on a quarterly and yoy basis.
Revenue of the top ten global IC design houses reached US$39.56 billion in 2Q22, growing 32% yoy according to the latest data from Trendforce. Growth was primarily driven by demand for data centers, networking, IoT, and high-end product portfolios. Trendforce is predicting that the IC design houses will have a difficult time maintaining this growth rate in the 2nd half of 2022 due to poor market conditions and the to reduce inventory levels.
The advanced packaging industry is expected to have a 9.6% CAGR between 2021 and 2027 to $65 billion according to the latest report form Yole. Six players, including 2 IDMs (Intel and Samsung), a foundry (TSMC), and the top 3 global OSATs (ASE, Amkor, JCET), process over 80% of advanced packaging wafers. OSATs accounted for 65% of the advanced packaging wafers in 2021, with Foundries accounting for 14% and IDMs with 21%.
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Semiconductor Professional
2yVery informative sir..
Recognized executive in the global semiconductor and photonics industry.│ Start-ups │ New Product Development & Transfers │ Ramp-up/Expansion │ Operations Management │ People Management │ Project Management │ Consulting
2yThanks Mark!