The Tech Week that was... April 11~14

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.??

Worldwide sales of semiconductor manufacturing equipment in 2021 surged 44% to an all-time record of $102.6 billion as companies aggressively pushed to add capacity amongst the current semiconductor shortages according to the latest update from SEMI.?China was the largest market for semiconductor equipment with sales expanding 58% to $29.6 billion, with Korea second and Taiwan the 3rd largest market, with the top 3 accounting for 77% of spend.

Worldwide 8” capacity is forecast to increase to a record 6.9million wafers per month by 2024 according to SEMI.??It is forecasting that semiconductors manufacturers will increase 200mm Fab capacity by 21%, 1.2million wafers between 2020 and 2024, to hit a record high of 6.9million wafers per month.?Foundries will account for more than 50% of 200mm capacity, followed by analog producers with 19%.?China will lead 200mm capacity with 21% market share in 2022, followed by Japan with 16%.?200mm fab equipment spending is expected to be $4.9 billion in 2022 as 200mm fab utilization remains at high levels

Worldwide IC unit shipments are forecast to increase 9.2% in 2022 to 428bilion units according to latest update from IC Insights. The 9% increase this year follows a 22% increase in units shipped in 2021, which was the largest increase in unit shipments since 2010. As electronics have become in integral part our everyday lives,?the shear quantity of shipments of semiconductor devices have increased at phenomenal rates over the last 40 years. ?In 2022 IC device shipments are expected to be almost 5x higher than in 2000, and a whooping 44x more than shipped in 1980.

Semiconductor wafer capacity is increasingly being concentrated in 5 companies, which now account for 57% of the world wide installed wafer manufacturing capacity, up from 53% a decade ago, according to the latest report from market research company Knometa,. Memory manufacturers account for 4 of the top 5 positions with Samsung accounting for the largest capacity with 19% of total worldwide capacity, having an total installed capacity base of 4.05million wafer per month, followed by TSMC with 2.8million w/m capacity, Micron, SK Hynix and Kioxia.

In latest update from Trendforce they see a weakening in the consumer electronics market caused by weakening stay-at-home economy, the pandemic in China, international tensions, and rising inflation in 1H22 and this will ease supply chain shortages in 1H22

Gartner has reported that worldwide PC shipments declined 6.8% in Q1’22, with sales of Chromebooks particularly badly hit.?Worldwide PC shipments totalled 77.9million in Q1, a decline of 6.8% but excluding Chromebooks there was a small 3.9% increase as businesses increased orders for desktop devices as the return to the office created demand.?Lenovo retained top position with 23.8% market share followed by HP.

China’s zero COVID policy and it’s efforts to stop the spread of COVID-19 in major cities like Shanghai and Kunshan is starting to have an negative impact on the semiconductor supply chain as manufacturers struggle to keep factories open and also to ship goods from the factories.?Over 30 Taiwanese companies have announced that they have suspended operations in Shanghai and Kunshan due to the strict COVID controls?at least until next week, including iPhone manufacturer Pegatron and chip substrate and PCB maker Unimicron.?Even the manufacturers that keep factories open by maintaining a “closed loop” bubble are struggling to ship output and get supplies of materials ?as truckers are caught up in a quagmire of quarantine controls which are paralysing trucking and causing huge queues of container ships?outside major ports to increase.

In company news..

This week we had the first indication of how the backend OSAT providers have performed in Q1 as the Taiwanese OSAT’s reported their March results which were generally up.??Year on year revenue was significantly up whilst Q1 results were generally slightly lower than the record Q4’21.

Taiwanese OSAT, ASE Technology holdings reported a 15.5% increase in March revenues to US$1.08billion compared to February for the ATM group which includes OSATs ASE & SPIL.?For Q1 they see revenue dropped almost 9% compared to the record Q4’21 reporting total revenue of US$3.015billion.Compared to a year ago revenue for Q1’22 was up 15.7%.

OSAT PTI (Powertech) reported March revenue up 9% yoy and up 10% sequentially at US$248million.?For Q1, revenue was US$714million, up 13% yoy.?Test provider KYEC reported record monthly revenue of US$112 million in March, up 26% sequentially.?For Q1, revenue was US$308million, up 17.7% yoy.

This week TSMC gave more details behind the 35.5% yoy increase in first quarter revenues, which reached a record US$16.85billion.?In the first quarter, shipments of 7nm and below technologies accounted for 50% of total wafer revenue, with 5nm technologies accounting for 20%. Wendell Huang, VP and Chief Financial Officer of TSMC said that the “first quarter business was supported by strong HPC and Automotive-related demand,” and for the 2nd quarter they forecast revenue to have a mid-point of US$17.9billion with “business to continue to be supported by HPC and Automotive-related demand, partially offset by smartphone seasonality.”

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Stay safe and healthy... bye.