The Tech Week that was... Nov 28~Dec 2

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.?

TSMC is reported to be planning to manufacture 4nm chips at it’s new US Arizona Fab in addition to the planned 5nm technology after US customers are believed to have pushed TSMC to do so.?The news is expected to be formally announced when US President Joe Biden and US Secretary of Commerce Gina Raimondo visit the facility near Phoenix for a ceremony next week.

?US foundry GlobalFoundries is reported to be planning to cut up to 800 jobs worldwide according to a Vermont based news site VTDigger.?The cuts were announced at a townhall meeting with staff at GF’s Essex Junction plant this week.?The job cuts which would impact up to 5.7% of GF’s worldwide workforce would affect mainly non-manufacturing positions.?It is reported that employees in the US and Singapore would be informed next week whilst employees in Germany would be informed later.?The cuts are part of GF’s previously announced cost cutting measures to prepare for the decline in demand for semiconductors as the world economy slows down and faces a possible recession.

The UK is missing out on a wave of investment and falling behind other countries in the fast-growing semiconductor industry because of a lack of support from the government according the latest report from the Business, Energy and Industrial Strategy Committee.?The committee chair said that “The Government is putting UK plc at significant risk by failing to take action in support of the semiconductor industry and that “Other countries are investing in the resilience of their semiconductor supply chains yet Ministers in the UK can’t even publish their semiconductor strategy on time.”

Meanwhile staff at Nexperia Newport Wafer Fab?have urged the government to reconsider their decision to force Nexperia to sell it’s 86% stake in the Fab due to “security concerns” by travelling to Westminster to put their case. ??They urged the government "to see sense and protect their jobs by allowing Nexperia to keep their Newport factory".?It will be interesting to see who will take over the Fab and if the government will put enough subsidies in to make the Fab a viable prospect moving forward if the forced sale goes ahead.

The Netherlands is reported to be pushing back on implementing additional restrictions on exporting semiconductor equipment to China as requested by the US after the recent tightening of export restrictions to China.?The Netherlands economy minister said “The Netherlands and Europe should have their own strategy,” adding that “you don’t want to overdo it but on the other hand you do not?want to have your doors unlocked where safety is the first issue — it’s a balancing thing,”?The Netherlands is home to equipment manufacturers ASML and ASM and China accounts for 5% of Dutch exports.

Due to the recent COVID lockdown at the Foxconn iPhone assembly plant in Zhengzhou, it is reported that this could result in an estimated 6million unit reduction in iPhone Pro output this year. ?The final number will depend on how quickly Foxconn can recover back to normal production.?This week the COVID lockdowns on Shanghai and Zhengzhou were lifted.

Japanese semiconductor manufacturer ROHM and Shenzhen based BASiC Semiconductor have entered into a strategic partnership agreement on SiC power devices for automotive applications.?Under this agreement, the two companies will leverage their respective strengths to innovate and improve the performance of SiC power devices and develop higher performing, more efficient and reliable SiC solutions for new energy vehicles.

Last week I highlighted how water supply is key concern when building the new Fabs at both SK Hynix and TSMC.?This week Samsung Electronics has announced it has secured water supply for it’s semiconductor Fabs in Korea by signing an agreement with the government to reuse treated sewage water for industrial use.?Kyung Kye-hyun, CEO of Samsung's Device Solutions Division, said “to preserve the water resources of the country, we will develop innovative water-reusing technologies and work together with the national government and local governments,” Under the agreement ?the treated sewage water from Suwon, Yongin, Hwaseong and Osan will be supplied to Samsung's Giheung, Hwaseong and Pyeongtaek plants.

In market research news…

This week Gartner and IC Insights published their latest semiconductor sales predictions for 2023 predicting that sales will drop between -3.6~-5% in 2023.

Global semiconductor revenue is projected to decline -3.6% in 2023, according to the latest forecast from Gartner after the market is predicted to grow 4% ?in 2022 to a total $618 billion.?The memory market is now forecast to remain flat in 2022 and decline -16% in 2023.?Currently there is significant weakness in consumer driven markets for smartphone,?PC?and consumer electronics?caused by the worsening economic outlook.?The decline in consumer markets is also negatively impacting the DRAM market causing oversupply for the remainder of 2022 and the first three quarters of 2023.?However enterprise driven markets like enterprise networking, enterprise compute, industrial, medical and commercial transportation are showing considerable resilience driven by strategic investments from corporations looking to strengthen their infrastructure.

IC Insights is similarly predicting a decline in semiconductor sales in 2023 due to the uncertain global economy, in their latest report.?After growing 25% in 2021 they are predicting a 3% increase in 2022 to a new record US$636billion, and then subsequently a -5% decrease in sales in 2023 as the global economy struggles with recession, together with soft demand for new enterprise and personal computers and smartphones, elevated chip inventory levels, and continued weakness in the memory IC market.?Following the downturn in 2023, IC Insights is forecasting semiconductor sales will rebound with three years of much stronger growth, reaching US$844billion in 2026.??

The US share of chip design revenue is forecast to drop to 36% by the end of this decade from 46% in 2021 and over 50% in 2015, without government support, according the latest report by Semiconductor Industry Association (SIA) and Boston Consulting Group.?This decline is driven by 3 challenges. First is that design and R&D investment requires greater investment and several regions are providing more public support than the US does. The second challenge ?the supply of design talent is dwindling and there is intense global competition for this talent.?The 3rd challenge is the open access to global markets is under pressure from factors such as tariffs and export restrictions.?

The use of OLED display panels in smartphones is on the rise and is expected to rise from 48% in 2022 to above 60% in 2026 according to the latest report from Trendforce.?Currently all iPhone models under the main series have OLED displays, ?whilst only the SE models have LCD displays.?About half of Samsung models currently have OLED displays, whilst about 30~40% of models from Chinese brands like Xiaomi, Oppo and Vivo.

Global shipments of VR products in 2023 will increase to 10.35million units (up 21% yoy) after dropping -5% in 2022 to around 8.6million units.?The decrease in 2022 is caused by 3 factors, the current inflationary economic climate, ?the push out of new model releases by manufacturers in 2022 and due to VR price increases.?Demand in 2023 is expected to be driven by the release of new VR products, Sony PS VR2 and the Meta Quest 3.

Apple reached its highest ever monthly market share with 25% of devices sold in China in October 2022 being iPhone.?Apple retained for the 2nd consecutive month the #1 OEM position, according to Counterpoint Research’s latest report.?While the sales for other key OEMs declined in October, Apple grew 21% sequentially. ?In YoY terms, China’s sales declined 15%, whilst Apple’s sales declined just 4%.

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Stay safe and healthy... bye