The Tech week that was... July 11~15

The Tech week that was... July 11~15

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

?What a mixed bag of news it was this week, with lots of good news of many new investment announcements in new capacity and strong demand for Fab equipment, but at the same time many early signs of a downturn in the market.?Read on to find out more.

In industry news...

TSMC reported its Q2’22 results saying revenue in Q2 increased 3.4%?sequentially to US$18.2billion.??The world leading foundry ?has raised its revenue outlook for 2022 despite warning of a cyclical downturn in the chip industry and pressures from soaring inflation.??TSMC forecast 3rd quarter revenue will be around US$20.2billion up 35.7% compared to last year and they raised its full year growth target to 35% up from 30% previously, outgrowing the foundry market which it expects to grow at 20% this year.? TSMC highlighted that rising costs for electricity and manufacturing tools could affect its profitability and also warned that many semiconductor vendors are reducing inventories and this inventory correction will last at least into 1st half 2023.?Despite the inventory correction which they expect to only last a few quarters in 23, they forecast TSMC capacity to remain tight based on increasing sales of chips for data centres and internet applications which offset the downturn in smartphones and consumer electronics.

The U.S. Senate could begin work on a pared-down China competitiveness bill which would include billions in funding for semiconductor manufacturing as soon as next week, with the goal of passing it through Congress before lawmakers depart Washington in August.

GlobalFoundries and STMicro have announced that they will invest US$5.7billion to build a joint 300mm Fab in France drawing on government funding.?This new?Fab, which will be built next to STM's existing plant in Crolles, is targeted to reach full capacity by 2026, with up to 620,000 300mm wafer per year production capacity. The JV will be 58% GF and 42% STM.

Bosch plans to invest another US$3billion in its semiconductor division by 2026 as part of the proposed European IPCEI programme on microelectronics and communications technology.?This will include spending US$250mililon over the coming year on 300mm wafer capacity in Dresden and start producing MEMS sensotr on 300mm from 2026. In addition it will fund 2 new development centres in Dresden and Reutlingen at a cost of over US$170million.

Taiwan OSAT ChipMOS Technologies will invest US$418.2 million in expanding capacity in Taiwan, the Ministry of Economic Affairs announced yesterday as it approved the companies application to participate in a government incentive program.?The capacity expansion would help ChipMOS explore new business opportunities in the 5G and automotive fields.

Infineon has laid the foundation stone of it’s 3rd wafer fab module in Kulim, Malaysia.?With more than US$1.8billion worth of investment, the third module will add significant manufacturing capacity in power semiconductors, particularly wide-bandgap technology based on silicon carbide (SiC) and gallium nitride (GaN). Construction is expected to be completed by third-quarter 2024.

Hon Hai subsidiary Foxconn Industrial Internet Co Ltd has invested US$1.46 billion in state-backed Chinese chip company Tsinghua Unigroup through a private equity fund. ?It now holds a 15 percent stake in Tsinghua Unigroup through the newly formed Xingwei (Guangzhou) Industrial Investment Partnership fund.?This fund is one of 10 equity funds in the Beijing Zhiguangxin Co which now owns 100% of the Tsinghua Unigroup after investing US$8.1billion in the company.?Tsinghua Unigroup said it has completed its reorganization plan and emerged from bankruptcy.

?Micron suffered a weather related prolonged power disruption at it’s Hiroshima Fab on July 8th. Operations have resumed at reduced levels and will continue to ramp over the next week.?Micron expects the event will impact its productivity and wafer scrap across its fiscal Q4 and Q1’23.

?In market research news…

?Is the semiconductor industry going through an inventory correction or a downturn??IC Insights reports that top 10 Taiwanese semiconductor suppliers saw an average of -5% decline in revenue in June compared to May.?This article reviews the latest data from around the world, and asks how long will this correction last?

?Whilst IC Insights ask whether Micron and the Taiwanese Semi suppliers the canaries in the coal mine predicting a downturn in the industry?

?US manufacturing production fell for the 2nd straight month in June, as output of motor vehicles and other goods declined, suggesting that higher interest rates were hurting the manufacturing sector.?Capacity utilization for the manufacturing sector fell 0.5% to 79.3% in June, though it is still 1.1% above its long-run average.?The S&P Global US Composite PMI Output Index, which measures the combined output of the manufacturing and service sectors, fell to 52.3 in June from 53.6 in May. The latest reading is the second-lowest in the pandemic recovery to date.

?Chey Tae-won, the Chairman of the SK Group which includes SK Hynix amongst its companies, has suggested possible changes or a delay in SK's multibillion dollar investment plans for the next few years, citing higher borrowing and raw material costs.?In May the SK group unveiled a US$189billion 5 year plan to bolster investment in semiconductor, electric vehicle battery and bio businesses.?He added that “Although they (investments) could be delayed, it doesn't mean we won't do it,"

?Global sales of total semiconductor manufacturing equipment by OEM’s are forecast to reach a record $117.5 billion in 2022, rising 14.7% from the previous industry high of $102.5 billion in 2021, and are forecast to increase further to $120.8 billion in 2023 according to the latest data from SEMI.?Both the front-end and back-end semiconductor equipment segments are contributing to the market expansion. The wafer fab equipment segment is projected to expand 15.4% to a new industry record of $101 billion in 2022, followed by a 3.2% increase to $104.3 billion in 2023.

?Worldwide PC Shipments fall 15.3% in the Second Quarter of 2022 according to IDC.?Worldwide shipments of traditional PCs declined to 71.3million in Q2’22, the 2nd consecutive quarter of lower shipments.?Despite the recent decline, total PC volume is still comparable to the beginning of the pandemic. Lenovo followed by HP and Dell took the top 3 spots and accounted for 62% of the market share between them.

With the many early warning signs of a turning point in the semiconductor industry cycle becoming more evident, how do you view the outlook for the semiconductor segment? Leave your thoughts in the comments below.

That's all for this week. If you enjoyed what you read, please “like” or share the article and if you have not already done so why don't you subscribe to my free newsletter and automatically stay up to date with all the industry news in your inbox.

Stay safe and healthy... bye.

Jiro Hanaue

President at Hanaue & Company, Ltd.

2 年

Thank you so much for the up-to-date information on the semi industry.

Alexander Gro?er

Manager Silicon Foundry Operations Bosch

2 年

Thank you so much for your hard work to publish this top newsletter every week

Shaw Chyi TAN

Sales leadership | Strategic account | Business development | New market | Client relationship | Channel partner | Regional experience | Salesforce.com CRM | LinkedIn Open Networker (L.I.O.N.)

2 年

Thanks Mark as always. There's certainly cautious in the air now ??

Thanks Mark, lots of good info again

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