The Tech week that was... July 15~19

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.?

The worlds leading foundry TSMC reported Q2 results this week, reporting revenue of US$20.8billion, up 40% YoY and up 14% sequentially.? In Q2 advanced technologies (7nm and below) accounted for 67% of total revenue with 3nm accounting for 15% of total revenue.? High Performance computing accounted for 52% of revenues in Q2, increasing 28% sequentially. ??Looking forward to Q3 2024, TSMC expects business to be supported by strong smartphone and AI-related demand for its leading-edge process technologies, causing revenues to increase to a midpoint of US$22.6billion, up almost 9% sequentially.? For the full year they have increased their growth forecast to slightly above mid-20’s percent and tightened their Capex spend range to the top end of the previous forecast to between US$30~32billion.

Taiwan foundry Powerchip reported revenue increased by 2.7% in Q2 to US$330million, but saw increased losses as heavy manufacturing costs from it’s new P5 fab in Miaoli outweighed the improvement in customer demand and factory utilization.? The P5 Fab started pilot production in Q2 and has not reached economies of scale yet.? Powerchip forecast that Q3 revenue will grow slightly in Q2 from a mild recovery in chip demand for smartphones, notebook computers, vehicles and networking devices.

SK Hynix is rumoured to be teaming up with Amkor to target the silicon interposer market in a bid to become a supplier to Nvidia according to reports in Korean media.? According to rumours SK Hynix will ship HBM and Interposers to Amkor who will then combine them with GPU’s from customers like NVIDIA to assemble AI accelerators.

Huawei is close to finishing the construction of a new semiconductor research and development (R&D) park in Shanghai. The R&D park will be Huawei’s largest research center globally, housing about 30,000 personnel.? The new US$1.4billion facility will pursue breakthroughs in semiconductors for devices, wireless networks and the Internet of Things.

This week there were 2 new beneficiaries announced of the CHIPS Act funds in the US

The U.S. Commerce Department announced this week that it planned to award Taiwan's GlobalWafers ?up to $400 million in government grants to establish the first U.S. production of 300mm wafers for advanced semiconductors and expand production of silicon-on-insulator wafers.? The planned subsidy would support $4 billion in planned investments by GlobalWafers in Texas and Missouri to construct new wafer manufacturing facilities and create 1,700 construction and 880 manufacturing jobs.

?The U.S. Commerce Department said this week that it planned to award Rocket Lab $23.9 million to dramatically boost the production of compound semiconductors used in satellites and spacecraft.

The University of Texas’s (UT) Texas Institute for Electronics (TIE) has been awarded US$840million by the Department of Defence to build a DoD Microlectronics Manufacturing Centre to advance the US semiconductor industry for defence applications under the DARPA program.

Samsung Electronics has postponed the start of mass production at its new 300mm Fab in Taylor, Texas, to 2026. The delay is speculated to be due to issues related to U.S. government subsidies and various permit complications. Together with uncertainties regarding economic recovery.? When originally announced in 2021, mass production was scheduled to start in 2H’2024 which was later delayed to 2025.? Although conditionally awarded US$6.6billion in funding, disbursement of ?funds has still not begun as terms and targets are still being negotiated.

In a separate report in Korean media, Samsung is reported to have decided to postpone construction of it’s phase 2 Fab at it’s foundry line P4, in favour of prioritising construction of its phase 3 of it’s memory production line which was scheduled to start construction in June this year.? The decision is believed to be due to the currently thriving memory business whilst it’s foundry line is struggling to secure foundry customers.

Singapore’s industrial landlord JTC has said it is preparing 11% more land for Singapore’s wafer fabrication parks in a bid to attract more semiconductor companies.? The new land will be in the east of Singapore and will be ready by the end of the year.? Currently JTC manages 4 wafer fabrication parks in Singapore with a total area of 391ha and has 14 global semiconductor companies manufacturing in Singapore, accounting for more than 20% of Singapore GDP.

In market research news..

The global foundry market is forecast to grow at a CAGR of 5.4% until 2029 according to the latest report from Yole.? The growth is driven by demand from server, automotive and industrial segment customers. Yole forecasts that foundry will capture 69% of the market by 2029. Yole also notes that the semiconductor industry needs to navigate an increasingly complex geopolitical environment since the US initiated a trade war in 2019, further exacerbated by potential conflicts between China and Taiwan.

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

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Stay safe and healthy... bye

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