The Tech Week that was... May 20~24th

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.?

In industry news..

?Samsung Electronics is replacing the head of its semiconductor arm , appointing a longtime memory chip veteran, Jun Young-hyun, to spearhead efforts to catch up with SK Hynix in the booming artificial intelligence (AI) arena.? He replaces Kyung Kye-hyun, who will head up Samsung’s Advanced Institute of Technology and the future business team.

UMC held a ceremony at Fab 12i in Singapore this week to celebrate the 1st equipment move-in at it’s phase 3 expansion, marking a major milestone in the construction of the new greenfield facility.? First announced in February 2022, phase 3 is a US$5bililon investment to add an extra module to it’s Singapore Fab to run 22 & 28nm 300mm wafers.? Originally scheduled to start mass production in mid this year, due to the current market situation mass production at the Phase 3 module has been pushed back to early 2026.

Leading foundry TSMC, said this week that a surge in artificial intelligence (AI) server demand would fuel global semiconductor revenue growth this year around 10% , excluding the memory chip sector.? TSMC deputy cochief operating officer Cliff Hou said “we are seeing very strong AI server demand. We are looking at a yearly growth rate of 2.5 times higher than last year. The industry’s growth would also be aided by a mild recovery in smartphone and PC demand, both estimated to increase shipments by 1 to 3% percent this year from last year.”? However automotive shipments are due to dip -11% whilst IoT would decline around -8%.? He said that the foundry market would outgrow the global semiconductor market this year growing around 15~20% by revenue, with TSMC growing around 21~25%.

US Equipment manufacturer Applied Materials reported fiscal Q2 revenue of US$6.65billion down -1% sequentially and up slightly YoY. Applied saw strong results from DRAM, advanced packaging, ICAPS and services.? Applied forecast fiscal Q3 sales would be roughly flat at US$6.65 billion. Applied Materials said that demand for machines used to manufacture artificial intelligence processors is growing.? However, some customers that make semiconductors used in internet-connected appliances, communications, cars, power electronics and sensors are pausing orders while they install machinery that they have already received. “Near term, there will be some digestion,” Applied Materials CEO Gary Dickerson said. “This year is not going to be significant growth year for us.”

Taiwanese foundry Powerchip is bullish that revenue will pick up in the 2nd half of 2024 on restocking demand and also due to growing demand for AI applications.? Powerchip is also developing new process technology to support power management chips for IoT, AI, high-performance computing and electric vehicle applications. Powerchip said that it’s Chinese rivals like SMIC and Nexchip have increased capacity on mature nodes last year and have significantly decreased pricing to compete for market share.? They also said that automotive and industrial chips were still in the process of inventory digestion.? In the first 4 months of 2024 Powerchips revenue fell -5.3% to US$449million.

Global funding news..

Governments around the world continue to announce new investment incentive schemes for the semiconductor industry to support local semiconductor manufacturing.

South Korean President announced a US$19billion support plan for the countries semiconductor industry which encompasses financial, infrastructure, research and development, as well as support for small and medium-sized companies.? The package include the US$7billion investment announced earlier this month.

South Korean materials manufacturing affiliate Absolics is the latest beneficiary of funding from the US CHIPS Act and will receive up to $75 million in direct funding for the construction of a 120,000 square-foot facility in Covington, Georgia, for glass substrates used in advanced packaging.? Absolics an affiliate of SKC, which is part of the semiconductor business division in the SK group. The SK Group has a global presence through SK Hynix for semiconductor chips, SK Siltron for semiconductor wafers, SK materials for gas, and materials used in the semiconductor process.

This week European research institute IMEC announced it will host the NanoIC pilot line targeting development of <2nm SoC’s on low power FD-SOI and on heterogeneous system integration with an investment of US$2.7billion.? Funding will come from a combination of public and private contributions with the EU funding up to US$1.5billion and private funding around US$1.2 from ASML and other industry partners.? With its R&D pilot line, imec aims to establish a leading technology platform where European and international companies can explore new technologies before they are introduced into large-scale production.?

The UK announced it will set up a new independent UK Semiconductor Institute , which will bring together government, universities and the private sector to support key components of the government’s Semiconductor Strategy to grow the sector, backed by US$1.3billion government investment.

Japan's industry minister, Saito Ken, visited the construction site of a state backed chip manufacturer Rapidus in Hokkaido this week to assess the progress. It was reported that the pilot production line building is about 30% complete, with construction expected to finish in January 2025 and the pilot line in operation as early as April 2025.?

In market analysis..

Trendforce reports that the new US tariffs on Chinese imports and other US restrictions on Chinese semiconductors has accelerated a shift in supply chains, resulting in increased orders for Taiwanese foundries , which are now seeing higher-than-expected capacity utilization rates. In the second half of this year, Vanguard's capacity utilization rate is expected exceed 75%, whilst PSMC's 12-inch capacity utilization rate will be between 85 to 90%, and UMC's overall capacity utilization rates are projected to reach 70–75%.

Counterpoint Research reported that the global foundry revenue declined -5% QoQ but grew 12% YoY in Q1 2024 as strong AI demand helped to offset the seasonal downturn and also a slower recovery in demand for non-AI semiconductors, spanning sectors such as smartphones, consumer electronics, IoT, automotive, and industrial applications.? TSMC grew it’s market share to 62% in Q1 from Samsung (13%) SMIC (6%) UMC (6%) and GF(5%).

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Stay safe and healthy... bye

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