The Tech Week that was... Jan 23~27

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.?

It’s been a quiet week in Asia due to the Chinese New Year holiday but there was lots of news from around the world as companies released their Q4’22 results, with mixed results.?

Dutch lithography equipment manufacturer ASML reported very strong results in its Q4 quarterly earnings call.?Q4 revenue was US$7.0billion and shipping 18 EUV systems in the quarter.?For the full year they reported revenue of US$23.1billion, up 14%, and finished the year with a backlog of US$44billion.?Looking ahead they forecast Q1 revenue midpoint of US$6.9billion. Sales to China accounted for 15% of the companies revenue in 2022. Although ASML would not comment on the current geopolitical situation regarding implementing additional restrictions on shipping equipment to China, they did confirm that currently the company is allowed to ship DUV systems but not EUV systems to China.

Bloomberg is reporting that the United States has secured a deal with the Netherlands and Japan on restricting the export of semiconductor manufacturing equipment to China in the trilateral talks which concluded Friday.?Details of the deal are not known but could mean that ASML and Nikon will be no longer able to sell DUV scanners to China and limit the tools that Tokyo Electron can export.

Intel released weak Q4 results ahead of it’s earning call next week, blaming “persistent macro headwinds” and a much more severe inventory correction than expected.?Revenue for Q4 fell -32% yoy to US$14billion with full year revenue US$63.1billion down -20%.?For the current quarter they are forecasting revenue of US$11billion, down -21% sequentially and down -40% yoy.?Although Intel did not provide any full year 2023 guidance, they did indicate they hoped for a rebound in 2nd half of 2023.

Semiconductor metrology equipment manufacturer also gave a gloomy outlook despite solid last quarter results as the company released its fiscal Q2 2023 results.?KLA reported revenue of US$2.98billion up 10% sequentially and up +27% yoy.?For calendar year 2022 KLA reported revenue of US$10.5billion up 28% and marking the 7th consecutive year of growth.?For the current fiscal Q3 forecast they predict revenue of US$2.35billion down -21% sequentially, of which Foundry logic is forecasted to be approximately 85%, and memory is expected to be around 15% of semi PC systems revenue. ?The company said, "As we begin 2023, it is clear that this will be a year of industry capacity adjustments," with customers were adapting their capex plans for 2023 to reflect lower end demand.?

European chipmaker STMicroelectronics reported strong results as strong demand from automotive and industrial customers helped it cope with challenging economic conditions.?STM net revenue was US$4.4billion in Q4, 2.4% sequentially and 24% yoy.?For the full year revenue was US$16billion, up 26%.?Capex in 2022 was $3.52 billion, and this is planned to increase to about $4 billion in 2023, primarily to increase manufacturing capacity.?For Q1 their midpoint guidance is US$4.2billion, up 19% yoy but down 5% sequentially.?For the full year 2023 they forecast revenue of US$17.2billion.?

Texas Instruments reported Q4 earnings of US$4.7billion, this was down -11% sequentially and 3% yoy as a result of weaker demand in all markets except automotive. For the full year TI revenue in 2022 was US$20billion up 9%.?TI is forecasting Q1’23 revenue of US$4.35billion, down -7% sequentially.?

There were some changes in management announced in the last week at Intel and TI.?Intel’s chairman Omar Ishrak stepped down and was replaced by Frank Yeary. Whilst at Texas Instruments, it’s board of directors has appointed Haviv Ilan to become the company's next president and CEO, effective April 1, and will replace the current President and CEO Rich Templeton, who will transition out of these roles over the next two months but will remain the company's chairman

US power chip maker Wolfspeed is rumoured to be planning to build a US$2.2billion Fab in Germany with German auto supplier ZF as a minority stakeholder.?The Fab in the small southwest German state of Saarland is expected to start production in 4years. ?Wolfspeed and other parties refused to comment on the report.

This week the European Parliament Committee on Industry, Research and Energy?passed the proposed Europeans Chip Act aimed to bolster technological capacity building, production and innovation, and build a mechanism to monitor the semiconductor supply chain and coordinate actions during a crisis.?There is still a long way to go before the act is enacted.?The proposed European Chips Act next goes through interparliamentary meetings when the European Parliament holds its plenary session in Strasbourg, France in mid Feb, then if unopposed, the proposal is to be passed on to the European Council for negotiations among member states’ representatives.?Once consensus is obtained the act can be implemented.

In market research news..

IDC reported that worldwide smartphone shipments declined -18.3% yoy in Q4 2022 to 300.3 million units, the largest ever quarterly decline.?Apple took top position in Q4 with 24% market share from Samsung (19%) and Xiaomi, OPPO and Vivo making up the top 5. For the full year, 1.21billion units were shipped in 2022 down -11% compared to 2021.?For the full year Samsung came in top with 21.6% market share, shipping 261million units, from Apple with 18.8% (226million units).

Counterpoint Research published it’s analysis of the top risks that the tech industry faces in 2023.?They rate the economic recession as the top risk in 2023 ?followed by the ‘US vs China rivalry’ and ‘energy crisis’ which mainly stems from the Russia-Ukraine war.

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Stay safe and healthy... bye