2023 Q1 Semiconductor Market Trend

2023 is tough for semiconductor industry. It seems that the overall demand for semiconductor materials is sluggish, and the lead times for major brands are back to normal. The revenue of most manufacturers has shown a downward trend. For instance, TI, the analog leader,?has experienced a sharp decline in revenue, but the automotive chip market continues to grow.

In terms of the market, except for a few high-end materials and automotive chips, the overall demand is sluggish. And the lead times of major brands are shortened, back to the normal cycle.

Below the latest spot market trends are for your review, including TI, ADI, MICROCHIP, XILINX, ST, NXP, BROADCOM, RENESAS, ON, INFINEON.

TI

In April, overall demand decreased. Hot selling materials in the automotive chip market decreased significantly, and the market price of general materials gradually returned to normal.

PMICs indicate a differentiated state. The prices of some models are still at a high level, such as 03853QDCARQ1. However, some prices are already spot prices in the second half of 2021. It is expected that the spot market quotations in Q2 will continue to gradually return to the trend of 2020. The lead time for some common materials is about 10-12 weeks. Nevertheless, the lead time for high-end materials has not been fully relaxed.

TI's 2023 Q1 financial report is not optimistic. Q1 revenue, operating profit and net profit all declined year-on-year. Revenue in its flagship analog chip?fell 14 percent, while embedded processors rose 6.4 percent. Other revenue fell 16%, with only the automotive business growing.

ADI

The spot price of ADI LTM power chips is still at a high level in April.

The delivery time of most of ADI's materials gradually shortens to 13 weeks.?While, the attitude of downstream end customers to ADI's current excess inventory is relatively vague in April. It is related to two factors. One is that there is still room for spot prices to fall.?The other is that they are only interested in ADI's futures prices. But futures are?not confirmed with schedule.?It’s said?that ADI planned to adjust prices in May.

MICROCHIP

The production schedule for hot-selling MCUs is irregular, including traditional ATMEL 8-bit and 16-bit MCUs.?For example, some ATXMEGAx deliveries lasts?52 weeks, while some AT91x deliveries will continue to deliver one after another. Moreover, MICROCHIP has announced a price increase of 5-10%. This is?also due to raw material shortages.?Prices of common?materials have dropped significantly. For some interface ICs such as MCP17XX and MCP25XX, the market price is back to the normal level.

Some customers worry about futures ordering. Although the reference delivery time of individual models is still 40-50 weeks or longer, customers are not very repulsive.?Besides,?the feedback has been included in the order reference. However, those who?can accept futures orders,?are pretty sensitive to?prices.

The delivery time of EEPROM is still very tight, exceeding?52 weeks.?The delivery time of some common materials for 8-bit MCU has been shortened to about 30 weeks, and FPGA is more than 40 weeks. Now, Microchip's overall lead time is still very long, but it is gradually returning to normal.

XILINX

In April, XILINX heated up, mainly in the 7 series and 6S series.

The 6S series is currently in short supply, and the number of skyrocketing models has decreased, but the price of the missing materials is still at a high level. This series is used in industrial control, automotive infotainment systems, consumer electronics.?Thus, the price-cut models gradually return to normal status.

The 7 series, headed by 7A, 7K, and 7Z, currently have a relatively high inventory.?As a result,?the market price is on a downward trend. However, prices for hot models fluctuate regularly. There is hearsay?that the series will adjust?price in Q3.

ST

The demand for ST declined in April.?The price of general MCU basically dropped to a low level. Demand for automotive specifications?is still the main role. The most April popular model was L9680, which is mainly applied to?car airbags. Early April, the transaction price was about RMB700 (excluding tax).

ST's latest financial report shows that Q1 net revenue in 2023 is higher than expected. But personal consumer electronics has declined. Gross margin was also beyond expectation.?ST said it?was due to?a favorable price environment, which resulted in a strong product mix.

ST currently has more than six quarters of order backlog coverage in the automotive, power and specialty B2B industrial fields. Orders in hand will not be shipped until 2024.?New orders tend to be normal. Demand for computer-related equipment/personal electronic equipment continues to be weak.?Inventory is being corrected;?backlogs and new orders are decreasing.?Company's 2023?Q1 inventory turnover days are 122 days, mainly related to excess personal electronic products and consumer goods. In the second half of the year, the company's consumer sector may face?no-load fabs?situation.

NXP

NXP's overall demand fell this month, and customers' demand for short materials?decreased. Lead times for most products are constantly improving. For instance, the lead time of TJA series has returned to about 12 weeks; LPC series is about 13-26 weeks; I.MX series is about 26-36 weeks. Some products such as MK series, S912ZVC, and FS32K are still out of stock, and the delivery time is about 40-52 weeks. NXP's demand is generally concentrated in the automotive and industrial application and some non-general materials.

NXP's Q1?is also beyond expectation. Revenue from automotive chips increased by 17% year-on-year.?Its proportion in total revenue rose from 54.5% in Q4 2022 to 58.6%.?Revenues of chips for industrial, IoT (Internet of Things) and mobile all?declined, while revenue from communication infrastructure and other products increased slightly. Continued growth in the automotive business made up for declines in other businesses.

NXP's channel inventory days in Q1?were 1.6 months, the same as in Q4?2022, a bit higher than the 1.5 months in Q1?2022. The current downturn in the consumer electronics market has also affected its destocking.

BROADCOM

The demand for Broadcom continues to slow down.?The market prices of most materials have tended to normal order prices.?What’s more,?some materials have even turned upside down. Weak demand for consumer and communication products in the first half of the year is basically a foregone conclusion.

The shortage of Broadcom is mainly concentrated in some automotive materials and some high-end PLX materials. The automotive industry mainly comes from overseas demand;?while PLX high-end materials mainly benefit from the fiery influence of artificial intelligence such as ChatGPT.

Although there is overcapacity and a large inventory, the original factory has basically not added too many orders in the past year. Broadcom's net revenue in Q1?of fiscal year 2023 increased by 16% year-on-year, and net profit increased by 53% year-on-year. Revenue beat expectations, with Semiconductor Solutions segment revenue up 21% year-on-year, accounting for 80% of net revenue.

RENESAS

April?demand for Renesas MCU has increased significantly, especially the R5 and R7 series, which are in short supply. Lead time for both series?is?about 40-50 weeks.?It will be quite difficult?to get orders?early. In addition, the supply of R8Axxxx series is currently tight.?Delivery schedule is still unstable, which is expected to continue to be out of stock.

Both Renesas sales and net profit?increased in Q1?2023, which was generally better than expected. However, Renesas?is not optimistic about its Q2?performance. Renesas is carefully studying demand trends in the second half of the year and arranging?shipments. Raise channel inventory slightly to avoid opportunity loss.

ON

Now, ON’s?delivery is gradually stabilizing. Even for high-priced chips, the upside space is limited. The major shortage is irreplaceable components, like automotive MOS, automotive IC, and MBRS series for industry and medical treatment.

ON is strengthening its collaboration with customers through joint laboratories and long-term supply agreements. When customers need to increase volume production, ON supplies to meet their needs. ON will work hard to increase SiC silicon carbide production capacity this year.

INFINEON

Recently, the automotive MCU Aurix TC2XX series market is booming, particularly?some?hard-to-find?models. Demand for power devices has been sluggish recently, and inventory pressure is extremely high.?But high-voltage MOS continues to be short. TLE series keeps?approximate 50 weeks?delivery. TLE8082ESXUMA1?became quite popular in a sudden. At the same time, price soared. The price has exceeded RMB1,000 , while the market is no stock available.

Infineon plans to officially break ground on a new 12-inch fab in Dresden, Germany on May 2nd. The new factory will mainly produce analog and power semiconductors. By quadrupling its current capacity, it will double its share of global chip production to 20% by 2030.