The Tech Week that was... July 22~26

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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.?

South Korean memory manufacturer, SK hynix reported record revenue of US$11.8billion in Q2’24, up 32% sequentially, on strong demand for HBM memory ?to support the AI boom, together with a recovery in DRAM and NAND prices.? Kim Kyu-hyun, head of DRAM Marketing said “"SK hynix plans to continue its leadership in the HBM market by mass-producing 12-layer HBM3E products in the third quarters, and delivering them to customers in the fourth quarters,"? For the second half of the year, the SK Hynix gave a rosy outlook with the demand for AI server memory continue rising, and the sales of high-performance memory products increasing as new PC and mobile devices supporting on-device AI will be released on the market. The company also predicted the general memory product market to be on a steady growth path as well.

Whilst the AI boom is driving record revenue for suppliers like TSMC and memory producers, results from other companies show that the semiconductor markets for other segments, particularly on non leading edge technology nodes is stagnant or down.

NXP reported Q2 revenue of US$3.13billion, down -5% YoY, and flat sequentially as NXP continued to face a challenging demand environment.? Automotive revenue was down -7% YoY, and Comms Infrastructure revenue was down -23% YoY as the segments continued to suffer from too much inventory, whilst Industrial and IoT(+7% YoY) ?and mobile (+21% YoY) segments were both up.? For Q3, NXP forecast a midpoint revenue of US$3.25billion, up 4% sequentially and down -5% YoY, as the automotive sector inventory digestion will take until late 2H’24.?

STMicroelectronics saw a slump in Q2 reporting Q2 revenue of US$3.2billion, down -25% YoY and essentially flat sequentially, as both STMicro’s product divisions saw a decline as customer orders as Industrial did not improve and Automotive demand declined.? For Q3 STMicro is forecasting revenue of US$3.25billion down -27% YoY. For the full year STMicro reduced it’s revenue forecast to US$US$13.5billion down from the US$16.4billion revenue forecast in January due to a delayed recovery in automotive and industrial segments.?

Texas Instruments (TI) reported Q2 revenue of US3.8billion,new down -16% YoY and up 4% sequentially as Industrial and automotive continued to decline sequentially, while all other end markets grew.? TI has now reported 7 consecutive quarters of declining YoY revenue. For Q3, TI gave a midpoint revenue guidance of US$4.1billion.

Leading OSAT ASE reported Q2 revenue of US$2.4billion for it’s ATM group, up 5% sequentially and up 2% YoY, as the market starts to improve.? Computer and consumer segments improved whilst communications segment declined.? Looking at the immediate future, ASE ?believe they will continue to see a tale of two businesses: the leading edge business driven by AI and high end networking continuing to boom and the more traditional business where customers are currently very conservative.

In other industry news..

US OSAT Amkor is the latest beneficiary of CHIPS Act funding as the company will potentially receive? up to US$400million in direct funding and access to US$200million ?in loans for its new US$2billion OSAT facility in Peoria, Arizona.? Amkor has secured approx. 55acres of land to build a new "state of the art" facility for advanced packaging and testing, with the first phase of production targeted to be ready within 3 years.

SK Hynix board approved an investment of US6.8billion to build it’s 1st Fab in the Yongin Semiconductor Cluster.? Construction will start in March 2025 and be complete in May 2027.? This the first of 4 Fabs planned to be built by SK hynix in the Yongin cluster in Gyeonggi Pref, South Korea.

In market analysis news..

China’s smartphone market grew 10% YoY in Q2 to exceed 70million units as the smartphone segment finally starts to recover.? Vivo took top spot in China with 19% market share shipping 13.1million units.? Chinese vendors, OPPO, HONOR, Huawei and Xiaomi took the other top 5 spots with Apple taking 6th position dropping 2% market share compared to Q2’23, according to the latest analysis from Canalys Research.

Yole reports that the advanced packaging market revenue -9% dropped in Q1’24 to US$10.2billion, but recovery is expected within 2024 driven by high-performance computing (HPC) and generative AI megatrends.? By 2029 advanced packaging revenue is projected to US$81billion a CAGR of 13% between 2023 and 2029.

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