The Tech Week that was... Aug 16~20

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 semiconductor sales are predicted to grow around 25% in 2021 and Samsung takes top spot in Q2, whilst Globalfoundries moves ahead with it’s plans for IPO, and the Nvidia acquisition of Arm faces new hurdles.

Top Stories

Globalfoundries has filed with US regulators plans for it’s IPO in New York either later this year or early 2022 in an offering that would value the company around US$25billion.?This shows that GF is intent on not accepting the rumoured potential acquisition by Intel.

?Samsung is negotiating with 3 US states to build it’s new US$17billion Fab.?The company is considering Texas where it’s 2 existing Fabs are located, together with New York and Arizona.?The Fab is planned to build advanced logic chips for it’s foundry business and would come on line as early as the end of 2024.?Samsung said in a filing ““Due to the higher tax cost of operating in Texas, the appraised value limitation is a determining factor.?Without the appraised value limitation award, the company would likely locate the project in Arizona, New York or [South] Korea.”

Intel on Thursday gave new details of its turnaround strategy to source subcomponents of its chips from external factories, including new specifics of partnerships with rival TSMC.?Intel said its ?new range of "Alchemist" graphics chips will be made using TSMC’s N6 technology ?which is an upgraded version of its N7 technology.?In addition Intel will use a modular approach to create “systems on a package” to stitch together various different node silicon chips from both internal and external sources by using Intels advanced internal package technology.

The US$40billion acquisition of Arm by Nvidia is facing a lengthy in depth review after the UK ?watchdog Competition and Markets Authority found that the deal raised “serious” competition concerns which would hurt competition and could weaken rivals, saying it is worried the deal will stifle innovation in several areas such as gaming and self driving cars.

Market Updates

Samsung has become the worlds largest semiconductor supplier in Q2 2021 overtaking Intel according to the latest update from IC Insights.?The top 10 semiconductor suppliers grew sales on average 10% in Q2 compared to Q1 recording total sales of US$95.5billion , with Samsung growing 19% to US$20.3billion. Intel and TSMC took 2nd and 3rd spots respectively both growing 3%. ?Samsung’s growth was driven by surging demand and rising prices of DRAM and Flash memory, and this is expected to further continue in Q3.

Trade organisation WSTS has updated it’s 2021 semiconductor market forecast for 2021 using actual Q2 data and is predicting the semiconductor market will grow to US$551billion in 2021, a growth of 25.1% compared to 2020.?They are predicting 2022 will continue to grow to US$606billion, a further 10% growth. They expect to see growth in all sectors and all geographical regions. ?

VLSI Research is predicting a similar increase in semiconductor sales in 2021.?They forecast semiconductor sales will show 26% growth in 2021 driven by the 5G proliferation, continued buildout of IT infrastructure, and ongoing economic recovery and also due to price increases in ASPs.?Memory will lead the growth with sales predicts to surge 30% whilst logic is forecast to grow 22%.

The annual production value of Taiwan’s semiconductor industry is expected to surpass US$143billion in 2021 according to Taiwan’s Industrial Economics and Knowledge Centre.?This is a growth of 24.7% compared to 2020 and up from an earlier forecast of 18%.?Chip production totalled US$35 billion in the second quarter of the year, up 9% compared to Q1

According to Chinese National Bureau of Statistics data, China’s IC output rose 41% in July to a new high of 31.6billion units.?In the first 7 months of 2021, output has increased 47.3% to 203.6billion units compared to the same period a year ago.?

China’s OSAT group JCET has reported revenue grew 15.4% in the first half of 2021 to US$2.1billion, after reporting record high revenue for Q2 of US1.1billion, up 13.4% yoy. JCET is the worlds 3rd largest OSAT with 6 manufacturing sites located in China, South Korea and Singapore.

Other Industry News

Huawei’s chairman has said that Huawei will not exit the smartphone business and will eventually return the company to the top position.?Huawei was put on the blacklist by the US government in 2019 which prevented the company ?buying chips. As a result it’s consumer revenue has dropped 47% in the first half of 2021 due to the shortage of chips and also it’s sale of it’s Honor smartphone brand, and lead the company to drop out of the top 5 smartphone suppliers having previously held #1 spot.?Huawei Chairman Guo said that “Huawei will keep its existence in mobile phone sector. I expect that as the capability in chip manufacturing increases, [Huawei] will return to the smartphone throne.”

STMicroelectronics announced this week that it has expanded it’s existing agreement with Cree for the supply of 150mm SiC wafers over the next few years to the value of US$800million.?The goal of the agreement is to support 40% of STMicro’s needs by 2024, to support the growing SiC device market for automotive market power solutions, as the industry moves towards electric vehicles.?

Nexperia’s takeover of Newport Wafer Fab has been completed according to a filing by Nexperia’s owner Wingtech in Shanghai and shares transferred, despite the UK governments investigation of the deal still ?ongoing.

The global shortage of automotive chips is continuing to impact automotive production with Toyota and Volkswagen the latest companies to warn that the shortage would impact to production.?Many experts expect the situation to continue into 2022, though there are signs that the situation may improve by end of 2021.?Earlier this week US senators asked again for Taiwan support to resolve the issue, in a response Taiwans Economy Ministry reiterated that the country will do it’s part to tackle the shortage and said the demand and supply should reach a “balance” by the end of the Q4’21.

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?Stay safe and healthy... bye.

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