The Tech Week that was... Mar 13~17

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.?

This week despite the downturn, there is still plenty of news regarding new capacity investments updates from companies around the world as companies bank on future semiconductor growth.

Samsung Electronics?is planning to invest $230 billion over the next 20 years to develop what the country's government called the world's largest high -tech semiconductor cluster in Gyeonggi Province surrounding Seoul, South Korea by 2042, in line with governments efforts to boost the national chip industry.

?In Japan, ?Mitsubishi announced that it will double it’s planned investment to approx. US$2billion over the next 5 years.?About US$760million of the new investment capital will be used to build a new 8” SiC Fab in Kumamoto Pref Japan

In the US, ?Microchip announced that it has reached a major milestone of it’s $800m expansion project to triple its semiconductor production at the companies Oregon facility.?The company is at the halfway point of its expansion and already hired an additional 300 employees, with plans to hire as many as 300 more over the next few years.

In other company news..

Wafer substrate manufacturer Globalwafers reported record revenue of US$2.3billion for 2022 an increase of 15% yoy. ??The company has a positive outlook on the industry saying “Overall industry inventory adjustment should be mostly resolved in the second quarter,” and “We think the recovery will start in the second half of this year, or as late as the end of this year.” ?They predict that semiconductors used in power management applications, industrial devices and automotive devices would recover at a faster pace than those used in consumer electronics and memory chips.

Taiwanese consumer electronics manufacturer Foxconn reported a -10% yoy decline in profit in 2022 and expects a decline in consumer electronics in the full year ahead.?Foxconn, a major Apple supplier,?reported full year revenue of US$74billion in 2022, and expects revenue growth for Q1’23 and the full year 2023 to be flat.?Foxconn also said that whilst currently 70% of the companies revenue is derived from production in China, moving forward it will continue to diversify its production overseas

This week Reuters reported that US-based optical semiconductor manufacturer for broadband networks Infinera is reportedly working with investment bank Centerview Partners to explore a possible sale. ?Based in California, Infinera manufactures optical semiconductors for networking products, subsystems, and related services, and has a indium phosphide fab.

China’s semiconductor output shrank -17 % in first 2 months of 2023 amid economic headwinds & US sanctions.?Production of ICs in January and February totalled 44.3 billion units, down 23% compared to the same period last year, according to data released by the National Bureau of Statistics (NBS)

China has assigned a new head to a high-profile, state-backed chip investment fund amid a renewed push to pour resources into the local semiconductor industry and counter a US-led blockade of the country’s technological development.?Zhang Xin?is to become president of the National Integrated Circuit Industry Investment Fund Co popularly known as the Big Fund, Chinese corporate data service provider Tianyancha said.

Speaking at the Commonwealth Magazine forum, the retired founder of TSMC, ?Morris Chang said that even as he supported parts of the U.S. efforts to slow China’s advances in the semiconductor industry, but says the policies will lead to the “bifurcation” of the global supply chain and the reversal of globalisation would increase prices and reduce the ubiquity of chips that power the modern world.?He warns that the US on-shoring policy efforts will lead to chip price hikes.

In market research news..

Total revenue of the top 10 foundries fell -4.7% in Q4 2022 and will decline further in Q1 after 13 quarters of consecutive growth according to the latest data from Trendforce.?Of the top 10 foundries only GlobalFoundries managed to increase it’s revenue in Q4. TSMC saw a -1% QoQ drop in Q4 but increased it’s market share to almost 60% as tier 2 and 3 foundries suffered an even bigger drop.??

Taiwan accounted for 64% of the foundry market in 2022 as localisation of the chip manufacturing industry increases according to analysis by Trendforce.?Currently there are 24 8” & 12” foundry Fabs in Taiwan, followed by China, South Korea and United States.?Of the new factory plans announced post 2021, Taiwan accounts for the largest number of new Fabs with 6 new Fabs, followed in activity by China and the US.?Looking at the broader semiconductor manufacturing market, Taiwan will account for 44% of global wafer production by 2025, and as much as 58% of the global advanced technology node capacity.

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