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

Welcome to the latest edition of my weekly newsletter bringing you all the key global semiconductor and technology news from last week in one easy read

?The US Presidential election result has certainly generated a lot of semiconductor related news this week.? As always the semiconductor industry is very exciting and ever changing and it will be interesting to see what changes happen in the semiconductor industry over the next 4 years.?

Taiwan’s Minister of Economic Affairs J.W. Kuo said this week that Taiwan’s technology protection rules prohibit TSMC from producing 2nm technology abroad now. Taiwanese law limits domestic chipmakers to producing chips abroad that are at least one generation less advanced than their fabs in Taiwan to protect Taiwan’s own technologies.? TSMC currently plans to produce 2nm technology in the US when it’s 2nd Fab in Arizona comes on line by the end of the decade.

CNBC is reporting that according to experts, they predict that President-elect Donald Trump is unlikely to roll back the Biden administration’s CHIPS and Science Act, despite his campaign rhetoric on the bill.? During President-elect Trump’s campaign he attacked the bipartisan CHIPS and Science Act which was passed in August 2022, committing almost $53 billion to invest in domestic semiconductor manufacturing and research with the aim of boosting U.S. competitiveness with China. It is predicted that whilst Trump may want to modify and change some of the priorities of the bill and its fund allocation, he’s expected to leave most of it intact.

It is reported by Reuters that TSMC, GlobalFoundries and the unidentified third company?have finished negotiating binding agreements for CHIPS Act funding which will allow payouts of the awards soon according to sources familiar with the matter.? This is after the U.S. Commerce Department recently notified Congress at least three companies are close to receiving a final award.? TSMC and Globalfoundries are amongst 21 companies that have been provisionally awarded funding under the US CHIPS Act.? TSMC was preliminarily awarded US$6.6billion in funding in April for it’s new Fab construction in Arizona whilst GF was preliminarily awarded US$1.5billion to build a new Fab in New York and expand it’s Vermont facility.? To date only 1 company, polar Semiconductor ?has actually completed negotiations and received US$123million in funding.

?In earnings news…

This week Taiwan foundries reported their October revenue.? TSMC continues to significantly outgrow it’s peers, growing 31.5% as it benefits from the AI boom., whilst other segments remain stagnant.? We can expect the OSAT October results early next week.

TSMC reported record high monthly revenue in October of US$9.8billion, up 29% YoY and up 25% sequentially as the company continues to benefit from the boom in artificial intelligence (AI) demand for it’s advanced technologies. ?For the first 10 months in 2024, TSMC’s revenue was US$72.6billion, up 31.5% compared to the same period last year.? For Q4 to date, revenue was US$17.6billion, on target to meet TSMC’s Q4 guidance of US$26.5billion.

UMC reported year to date record high monthly revenue in October of US$663million, up 11% YoY and up 13% sequentially.? For the year to date till October, UMC revenue was US$6billion, up 3.5% compared to the same period last year.

?8” specialist foundry Vanguard International Semi (VIS) reported October revenue of US$118million, up 17% YoY but down -18% compared to September.? For the year to date till October, VIS revenue was US$1.12billion, up 14% YoY

Powerchip reported October revenue of US$121million, up 1.7% YoY and flat compared to September.? For the year to date till October, PSMC revenue was US$1.16billion, up 1.7% YoY.

Selected Quarterly results..

US foundry GlobalFoundries reported Q3 revenue of US$1.7billion, down -6% YoY but continues it’s quarter on quarter quarterly growth trend to be up 7% sequentially. GF reported that apart from smart mobile, all market segments were down? year on year. IoT market continues to impacted by elevated channel inventories in consumer and industrial segments, whilst automotive suffers from customer inventory management timing, and Communications infrastructure and data center revenue was affected by declining volumes. Utilization levels were in the mid 70%’s whilst wafer shipments were up 6% sequentially and ASP levels remained flat. For Q4 it is guiding revenue will be US$1.83billion as the foundry continues it’s slow recovery.

Chinese foundry SMIC reported Q3 revenue of US$2.17billion, up 14% sequentially and up 34% YoY. ??SMIC reported that 86% of it’s revenue comes from China.? SMIC reported that revenue from consumer electronics and computer and tablet was up, whilst smartphone weas down slightly. ?12” revenue was up sequentially accounting for 78.5% of revenue whilst 8” revenue was flat.? Capacity utilisation increased to 90.4% in Q3, as wafer shipments increased to 884k 8” equiv wafers.? For Q4 SMIC is forecasting revenue will be flat to up 2% QoQ.

Qualcomm reported FY Q4 revenue of US$10.2billion, up 19% YoY and up 8.5% sequentially, with handset volumes growing 12% and on strength in both IoT and automotive sales. For the full fiscal year Qualcomm revenues were US$38.9billion up 9% YoY. ??Android handset volumes in FY2024 grew 20% YoY.? For FY Q1’25 Qualcomm is guiding revenue at US$US$10.9billion.

NXP reported Q3 revenue of US$3.25billion, down -5% YoY, but up 4% sequentially.? NXP reported it experienced some strength against our expectations in the Communication Infrastructure, Mobile and Automotive end markets, it saw increasing macro related weakness in the Industrial & IoT market.? Q4 guidance was US$3.1billion, down -5% sequentially and down -9% YoY as it expects broader macro weakness especially in?Europe?and the?Americas.?

In other news..

GlobalFoundries was fined US$500,000 penalty for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker SMIC.? Commerce Department said GlobalFoundries sent 74 shipments worth $17.1 million to SJ Semiconductor, an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to a trade restriction list known as the entity list in 2020 over SMIC's alleged ties to the Chinese military-industrial complex which SMIC denies.? GlobalFoundries said the company regrets "the inadvertent action, due to a data-entry error made prior to the entity listing," which caused it to accidentally ship the legacy chips without a license. "We strive to, and believe we have, a world-class trade compliance program that sets the standard for the foundry industry,"

The British government on Wednesday ordered China-registered Future Technology Devices International Holding Ltd to sell 80.2% of Scotland-based chip company FTDI over national security risks. ?FTDIHL gained control of FTDI in December 2021. ?FTDI Chip is a fab-less semiconductor company established in 1992,?which develops innovative silicon solutions that enhance interaction with the latest in global technology.

In market research news..

In the latest data from WSTS, global semiconductor sales were US$166billion in Q3 2024, an increase of 23% YoY and up 10.7% compared to Q2’24. ?Global sales were US$55billion in September, up 4% compared to the August.? ?Regionally the Americas showed the biggest YoY increase of 46%, with China 2nd with 23% growth.? Only Europe showed a decline of -8% YoY.

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