The Tech Week that was... July 4 ~ 8

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 market may be softening especially in the smartphone and consumer sectors but this has not filtered up the supply chain to the foundries yet based on the latest revenues from Taiwanese foundries and OSAT’s.?All the top 4 Taiwanese foundries and leading OSATs all reported record Q2 revenues, though some foundries did report slightly weaker June numbers.

?Revenue numbers for the Taiwanese Wafer Foundries were…

World number 1 foundry TSMC reported it’s June’22 revenues showing a slight -5% drop in revenue compared to May.?Revenue in June was US$5.9billion, which was up 18.5% year on year.??Total revenue for Q2 was a record US$17.9billion, up 8.8% compared to Q1.?For the 1st half of 2022, revenue was US$34.4billion, up a massive 39.5% compared to the 1H’22

Taiwanese foundry UMC reported record monthly revenue in June of US$833million, this was marginally up 1.6% compared to May, and up 43% yoy.?Q2 revenue was a record US$2.4billion, up 13.6% compared to Q1’22.?For the 1st half of 2022, revenue was?US$4.55billion, up 38% compared to 1H’22.

Specialty Taiwanese foundry Vanguard (VIS) reported record monthly revenue in June of US$184million, 3% up compared to May and up 54% yoy.?For the 1st half 2022, revenue was up 49% yoy at US$966million.?For Q2 revenue was a quarterly record of US$513million, up 13% compared to Q1 and up 50% yoy.

?DRAM Foundry Powerchip reported revenue of US$238million in June, down -4% on May revenue but up 36% yoy.?Q2’22 revenue was a record quarterly revenue of US$733million, up 5.4% compared to Q1’22.?For the 1st half 2022 revenue was US$1.4billion, up 49%?compared to 1st half 2021.

?Whilst in the BE, Taiwanese assembly and test OSAT’s reported..

For Taiwan’s leading OSAT group ASE June revenue was a record US$1.11billion, up 3.7% sequentially and up 22% yoy for the ATM (assembly, testing and material business) group which includes OSAT's ASE & SPIL. Q2’22 revenue was US$3.25billion up 7.7% compared to Q1 and up 15% yoy.?1st half?2022 revenue was US$6.26billion, up 15% yoy.

?Test provider KYEC reported June revenue of US$108million, down 2.5% sequentially.?Q2 revenue was a record US$333million, up 10% compared to Q1, and up 30% compared to Q2’21.?For 1st half 2022 revenue was US$635million, up 24% compared to a year ago.

In other industry news..

?Samsung also reported it expects earnings for Q2 to increase 22% yoy to US$59.8billion. Analysts are predicting that this increase came from it’s design and foundry business, whilst memory chips probably saw a decline in shipments.?Analysts are also predicting headwinds in the 2nd half of 2022 as demand is dropping and memory chip inventory levels are building up.?

II-VI has successfully completed it’s acquisition of Coherent, and the combined company will be named Coherent moving forward.?This completes the US$7billion acquisition of Coherent which was announced in March 21, after a protracted bidding war with Lumentum.?The closing of the acquisition took longer than expected pending Chinese regulatory approval which was obtained in late June.?

The global chip shortage has stirred governments around the world to look at building local semiconductor manufacturing capability to stop the reliance on Taiwan and S Korea.?This article looks at the high competitive barriers that these countries face to develop such manufacturing capability.

The US is reported to be putting pressure on the Netherlands to stop sales from ASML to China including older DUV lithography tools.?The Dutch government has yet to agree to any additional restrictions.

It is over one year since Nexperia acquired Newport Wafer Fab and the government inquiry on national security grounds to review the Chinese backed take over is still not complete.?This is causing worry amongst employees and customers of the Fab, according to Mr Versluijs, Country Manager Nexperia UK, and he urged for a swift conclusion to the inquiry which was reopened in May.?He added that Nexperia had invested ￡160m of "Dutch money" in its plants in Newport and Manchester over the past 15 months and rejected rumours that the company was considering moving abroad.

??In market research news…

?Fabless suppliers increased their market share of Global IC sales in 2021 to hold a record 34.8% share according to the latest analysis from IC Insights. Fabless company sales have been growing much faster over the last 10years compared to IDM’s and have had a CAGR of 10% between 2011 and 2021.?Fabless IC sales were US$177.7billion in 2021, whilst IDM sales were US$332.8billion.

Global semiconductor industry sales were $51.8 billion in May 2022, an increase of 18.0% yoy and 1.8% up sequentially according to the latest data from WSTS.?Month on month sales increased by single digits in all regions except Europe.

?TSMC is estimated to have 70% market share of smartphone AP/SoC and baseband shipments in Q1 2022 according to the latest report from Counterpoint Research.?Global smartphone chipset (SoC/AP+Baseband) shipments declined 5% YoY in Q1 2022 due to seasonality, weaker demand in China amid lockdowns and excess inventory from some chipset vendors in Q4 2021.

?Sony is fighting to maintain it’s number #1 position in the image sensor market as it has lost around 10% market share over the last 2 years dropping from 53% to 43%.?To reverse this decline, it has launched an aggressive campaign to expand capacity, upgrade its technology and diversify from smartphones into automotive, virtual reality and other applications. Currently it’s main competitor is Samsung which has gained around 4% market share to 22%, propelled by its own smartphone business and also China smartphone makers.?Omnivision has also increased around 4% market share to around 14%.

8” Fab capacity utilisation rates are expected to decline in 2H22 as customers cancel orders according to TrendForce.?Trendforce report that inventory adjustment has begun for driver IC, smartphones, PCs, and TV-related peripheral components such as SoCs, CIS, and PMICs, and companies are beginning to curtail their wafer input plans with foundries. This phenomenon of order cancellations is occurring simultaneously in 8-inch and 12-inch fabs at nodes including 0.xn--1xm-yyc, 90/55nm, and 40/28nm. Not even the advanced 7/6nm processes are immune.?Trendforce is predicting 8” utilisation rates will be ~90~95% whilst 12” utilisation rates will be ~95%.

?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.