The Tech Week that was.. April 22~26

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..

Global #1 OSAT, ASE held it’s Q1 earning conference this week reporting that it's ATM group Q1 earnings fell -10% sequentially to ~US$2.3billion due to typical seasonality.? ?ASE forecast that revenue will grow by mid single digits in Q2.? ASE also announced that it will increase it’s Capex budget this year by another 10% on top of the 40~50% increase announced in February.? Total Capex should now be around US$1.9billion this year to expand leading-edge and advanced packaging and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand.? ASE said that equipment utilization will increase to more than 60% in Q2 and reach 70% in Q3, from a base of less than 60% in Q1.

Taiwanese foundry UMC reported Q1 revenue of US$1.7billion down -0.6% sequentially and up 0.8% YoY.? Wafer shipments increased slightly in Q1 as they saw a pick up in the computer sector with factory utilization of 65%.? For Q2 they expect wafer shipmenrs to increase by low single digits with blended ASP remaining flat.? 2024 capex remains unchanged at US$3.3billion, primarily to increase 12” capacity.? UMC announce dit will delay the production start of it’s Singapore factory from April 2025 to January 2026 due to the current automotive market outlook.

Intel reported revenue of US$12.7billion in Q1 which was up 9% YoY but down 18% sequentially.? For their foundry business, Intel Foundry, which is now reported separately, had revenue of US$4.4billion down -10% YoY on lower backend services and samples revenue along with lower IMS tool sales. Wafer volumes were modestly higher in Q1 with ASPs modestly down driven by pricing for mature nodes. ?Intel announced a new aerospace/defense customer on it’s 18A process taking its “meaningful” customer base on the 18A platform to 6.? ?Intel forecasts Q2 revenue will be US$13billion, with client and data center businesses roughly flat, and sequential growth from Mobileye, NEX and Foundry Services.? For the 2nd half of 2024 they expect growth across all segments.

SK Hynix announced that Q1 revenues were an all time Q1 high of US$9billion, up 10% sequentially and up 144% YoY as the company believes that it has entered the phase of a clear rebound following a prolonged downturn.? SK hynix forecasts the overall memory market to be on a steady growth path in coming months as demand for AI memory continues to rise.

Texas Instruments (TI) reported Q1 revenue of US$3.7billion, down -16% YoY and down -10% sequentially as revenue declined across all end markets.? TI is forecasting Q2 revenue of US$3.8billion giving hope that the inventory corrections are easing.?

In other industry news..

Micron will receive US$6.1billion in direct funding from the CHIPS Act becoming then latest beneficiary of grants to support manufacturing construction in the US.? The funding will support the construction of two Micron fabs in Clay, New York, and one fab in Boise. Micron intends to invest approx. US$30billion by 2030 in gross capex for U.S. domestic leading-edge memory manufacturing.? In addition to the CHIPS grants, Micron expects to benefit from the U.S. Treasury Department’s Investment Tax Credit, which provides a credit of 25% for qualified capital investments. The state of New York has made up to $5.5 billion available in incentives over the life of the project.? In Idaho Micron will also benefit from an incentive package, including reduced state taxes related to the project and substantial investments in semiconductor workforce training programs.

SK Hynix has announced it will spend US$14.6billion to build a new memory chip complex in South Korea to meet the rapidly increasing demand for AI semiconductors. An initial US$3.9billion will be spent to start construction of a new Fab, with construction starting in April which is planned to be completed by the end of 2025. They plan to locate its newest Fab, M15X, close to its production base in Cheongju, South Korea.

According to Trendforce Kioxia and Western Digital plan to restart merger talks despite continued opposition from SK Hynix which is one of its major shareholders.? The improving ?memory market has prompted Kioxia to restart talks with Western Digital and is also reported to be looking at going public this year.

Taiwan was hit with another round of earthquakes this week with aftershocks ranging from 3.0 to 6.3 but no damage was reported.? Although some TSMC Fabs temporarily were evacuated, no damage was reported and TSMC have reported no impact on operations. ?UMC also said it’s operations were not affected. ?This follows the major earthquake on April 3rd which caused operations to temporarily stop.? TSMC reported loses of US$92million due to the scrapped wafers from the April 3rd earthquake. ?

The Malaysian government has announced plans to build the largest chip design park in South East Asia in Selangor State to attract global companies to have design centers located there as Malaysia aims to broaden it’s scope in the semiconductor industry from being a major BE assembly hub mainly based in Penang.? Meanwhile Penang state government has said it is committed to strengthening it’s position as part of the global chip supply chain and “will continue to be a natural magnet for back-end chip manufacturing and is expected to further integrate with the global chip supply chain in the upcoming decades.”

In market research news…

China’s smartphone sales grew 1.5% YoY and 4.6% QoQ in Q1 2024, marking the second consecutive quarter of positive YoY growth according to the latest data from Counterpoint. Vivo took top spot with 17.4% market share.? Huawei and Honor were the biggest gainers both with double digit growth whilst Apples sales dropped -19% YoY.? The market is expected to see low single-digit YoY growth in 2024.

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Stay safe and healthy... bye

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