The Tech Week that was... Nov 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 there is a lot of optimism in the news anticipating a recovery for the semiconductor segment.

According to SEMI and Techinsights, the global semiconductor manufacturing industry is on track for recovery in Q4 2023, setting the stage for continued growth in 2024.? They are predicting that IC sales will rise 4% sequentially in Q4’23 after improving 7% sequentially in Q3.? Despite the improvement in IC sales, semiconductor manufacturing indicators remain soft. Fab utilization rates and capital expenditures continue to decline in the second half of this year. Overall, CapEx on non-memory is expected to outperform memory in 2023, but even spending in the non-memory segments has begun to weaken. Total capital expenditures in Q4 2023 are hovering at the levels seen in Q4 2020.

IDC is also reporting that it believes the market it has bottomed and return to growth that accelerates next year. In its latest forecast IDC has raised its revenue forecast for 2023 to US$527billion, this is down -12% compared to 2022, then it expects revenue to grow 20% in 2024 to US$633billion as IDC believes the U.S. market will remain resilient from a demand standpoint and China will begin recovering by the second half of 2024.?

The latest October results from the Taiwan Foundries and OSATs also indicate that the industry is starting it’s recovery

TSMC reported that its revenues grew 35% in October compared to September, reaching a record monthly high of US$7.5billion.? October surpassed TSMCs previous monthly record high set in Nov 2022 and it is the first time in 7 months that revenue was positive compared to last year, recording 15.7% YoY growth as it is believed that TSMC benefitted from strong demand for it’s 3nm process.

UMC also had it’s best month in 2023 in October, reporting revenue of US$604million, up almost 1% sequentially but down -21% YoY.? 8”wafer specialist foundry Vanguard International Semiconductor (VIS) reported revenue of US$102million in October, this was down -6% sequentially, and down-9% YoY.? Whilst Powerchip reported revenues of US$121 million in October, up 10% sequentially, and down -33% YoY.

?For the OSAT’s, ASE reported revenue of US$881million in October for its ATM group which includes OSATs ASE & SPIL. This was down -1% sequentially and down -16% YoY.

However the memory market seems to have some way to go to recover based on the latest filings from Samsung and SK Hynix.

Semiconductor inventories of Samsung Electronics and SK hynix remained at high levels in Q3 of this year as the prolonged global economic downturn contracted demand, according to the Korea Times. The combined inventory level of the two chipmakers have risen 8.8% to ~US$37.5billion over the nine-month period since end of 2022

In other industry and Market Analysis news..

In the latest report by Yole on the MicroLED industry, it predicts that meaningful production volumes are now achievable in the next 2~3 years and widespread consumer adoption potentially taking 5~10years. The industry has seen substantial investment with over US$11.5 billion spent by 2023, including US$8.8 billion for R&D and startup funding and US$2.7 billion for pilot lines and manufacturing preparations, but the path to success has been marked by ups and downs, often due to challenges in achieving high-yield, low-cost, high-volume production.

China’s smartphone market is signalling a recovery with smartphone sales in the first four weeks of October growing on average 11% YoY according to Counterpoint Research.? Huawei is the standout brand, growing by over 90% during the four-week period, but it is struggling to meet demand with stock shortages.

The latest ruling from Germany’s constitutional court might jeopardise the countries semiconductor subsidies policy and may impact the planned subsidies for Intel and TSMC new European Fabs. The court decided to strike down off-budget funding for climate action, calling into question the future of up to US$840billion worth of special funding available for the German government. According to the court, repurposing US$65 billion of pandemic aid from 2021 to finance the government's Climate and Transformation Fund (KTF) contravened Germany's constitution, known as the Basic Law. The decision has raised the fear in Berlin that similar funding vehicles may have to be dissolved by the end of the year.

Chinese chipmaker Yangtze Memory Technologies Co (YMTC) has filed a lawsuit at the U.S. District Court for the Northern District of California against Micron alleging infringement of eight of its patents.? According to the lawsuit, Micron turned to YMTC's patented technology to fend off competition from YMTC and to gain and protect market share. It said Micron was not paying its fair share to use the patented inventions.

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.

Stay safe and healthy... bye