The Tech Week that was... Aug 2~6

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.

Let’s start with the latest market analysis, which continues to be very positive.?The IC market grew 29% yoy in Q2 with most product segments expected to show double digit growth in 2021.

In it’s latest update, market research company IC insights reports that it expects robust growth rates for nearly all IC products in 2021.?IC Insights expects 29 of the 33 product categories to experience double digit sales growth this year, with 3 of the remaining 4 segments expecting to see single digit growth. Only the gate array segment worth US$58million in revenue in 2021 is expected to decline in sales. ?Leading the growth sectors are special purpose logic and DRAM both expected to show over 40% growth this year.

The Semiconductor Industry Association (SIA) announced that worldwide semiconductor sales were a record high of $44.5 billion in June 2021, an increase of 29.2% from the June 2020 total of US$34.5 billion.?Sales in Q2 rose 29% yoy to US$133.6billion and were 8% higher than Q1, with sales up in all regions and all major product categories.

According to Digitimes research China smartphone vendors saw Q2 shipments drop 16.4% sequentially to 160million units. Xiaomi, Oppo, and Vivo were not able to maintain their strong shipment momentum from Q1 to Q2, as most of their key markets had experienced a sharp decline in demand. The top 3 vendors delivered 130 million smartphones in Q2, accounting for 64.6% of the overall volumes. ?Shipments ar eepxected to recover 14% in Q3, with shipments in the 2nd half of 2021 expected to grow 7.9% form the 1st half.

Counterpoint research reported that the global smartphone market grew 19% YoY in Q2 but declined by 7% QoQ as 329 million units were shipped.?Samsung retained number one spot with 58million units shipped, however it’s market share dropped to 18%.

According to data from Trendforce, global TV panel shipment for 1H21 reached 135.2 million pcs, a 3.5% YoY increase, and high end OLED panels reached 2.6% market share in 1H21.?Trendforce is predicting that OLED panels will increase 3% of the market in 2021 as the price difference between OLED & LCD panels decreases.?Chinese panel suppliers accounted for 58% of the TV panel market, an increase of 5% from a year ago, as Taiwan and Korean manufacturers focused on IT products instead.

Trendforce also predicts that annual revenue of microLED chips for TV is expected to reach US$3.4 billion in 2025 at a 250% CAGR across the 2021-2025 period.?The growth is expected as display manufacturers adopt microLED technology for large sized displays due to superior quality despite cost and technology challenges.

Global Chip Shortage

The global automotive chip shortage is expected to continue beyond 2021 as this week both BMW and Stellantis this week added to the long list of car makers warning that the chip shortage will impact output and warning that the 2H 2021 will still have a shortage.?This is not helped by production outages at Infineons Melaka plant caused by the pandemic.?Infineon reported that one of it’s plants in Melaka, Malaysia was shutdown due to COVID infectinos and is only expected to recover production this month.?Digitimes is also reporting that On-Semi production in Malaysia is also being impacted by COVID restrictions.

In addition to the pandemic restrictions in Malaysia causing supply issues, the Philippines has also announced extended pandemic measures (ECQ) in Metro Manila which may hinder production at major MLCC manufacturers Murata and Samsung reports Trendforce.

Another potential timebomb on the horizon according to Bloomberg, is that Mediatek has filed a patent infringement lawsuit against NXP, Continental and Bosch amongst others requesting a ban on imports into the US. ?Mediatek claims that NXP’s chips infringed five patents on its design, structure, and operation of products with power lines, temperature sensors, and wireless device signal processing.?The USITC has not made any decision on the merit of the case and will make a ruling as soon a practically possible. Continental reported to ITC that if MediaTek wins the lawsuit, most American car production will be suspended for at least one year.

The current global supply shortage and increases of material prices has lead to most major foundries to raise wafer prices.?According to Digitimes TSMC has notified driver IC vendors of price hikes of 15~20% starting August.?Samsung reported last week that it would it would adjust pricing of its semiconductor wafers in a bid to finance expansion of its S5 fab near Pyeongtaek, South Korea, affecting costs of GPUs, SoCs, and controllers produced by Samsung Foundry. Vanguard reported this week that it expected revenue to increase more than 13% sequentially mainly due to price hikes as near term demand remains very strong.?Last week UMC raised its chip price forecast for this year to as high as 13% year-on-year. this increase is due to both an improved product portfolio mix and also price increases.?

TSMC is reported have discovered a contaminated oxygen supply at its Fab 18a 5nm Fab in Tainan last week on July 30th.?It is reported that a tanker with a higher than allowed impurity levels was connected to the supply resulting in a temporary shutdown.?TSMC has said there was no significant impact on production and will not impact shipments. The Fab produces the Apple iPhone and Mac computer processor, and is gearing up for the new iPhone release.

Industry News

Chinese foundry, SMIC, reported its Q2 earnings reporting revenue of US$1.3billion in Q2, an increase of 22% compared to Q1.?Revenue is expected to grow 2~4% sequentially in Q3.?SMIC says it still faces difficulties from being placed on the Entity list but is working to overcome these.

Apple supplier Foxconn parent company Hon Hai took another step in it’s goal to become a major player for automotive chips, as this week it announced that it will acquire a 6” wafer fab, including facilities and equipment, ?in Hsinchu Taiwan from Macronix to produce SiC chips for electronic vehicles.??They will acquire the Fab for US$91million and expand capacity up to 15,000 wfrs/month by 2024.

There are rumours that the UK government may block the proposed acquisition of Arm by Nvidia according to Bloomberg. A report from the UK commission investigating the deal is reported to contain worrying implications for national security.?The UK Culture Secretary will make a decision based on the report.

The trend for major device manufacturers to design and use their own processor continues This Google announced it will use it’s own processor called Tensor to power it’s Pixel 6 & 6 Pro phones as it moves away from Qualcomm, which it has used for it’s processor for 15 years.?Google said that the next generation phone 5a would still use a Qualcomm processor.?Google has been using it’s own designed AI chips in it’s phones for a while but this is the first time the company will integrate the AI features into the processor.

That's all for this week. If you enjoyed what you read, why don't you subscribe to my free newsletter and automatically stay up to date with all the industry news.

Stay safe and healthy... bye.