The Tech Week that was... Oct 2~6

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 company & industry news…

As we approach the 1st anniversary of the US government’s decision to restrict exports of semiconductor chips and equipment to China, governments are reported to be planning to update and add new restrictions. ?The US government is expected to announce additional restrictions on exports of semiconductor equipment and AI semiconductor chips to China soon.? Whilst the European Commission is planning to assess the risks of implementing restrictions on four advanced technologies: semiconductors, AI, quantum computing, and biotech.

Intel announced this week, it will treat its programmable chip unit as a standalone business from 1st Jan 2024, ?with the aim to spin it out through an IPO in the next two to three years.? Sandra Rivera, who leads Intel’s broader Data Center and AI group, will become PSG CEO. Intel will manufacture the group’s chips.

This week we had the first glimpse of Q3 semiconductor financials, with the Taiwan foundries reporting September and Q3 results.? Overall revenue is still well down by double digits compared to Q3 2022 results and it looks like we need to wait till 2024 to see the recovery in the industry.?

Taiwan foundry, TSMC reported monthly revenue of US$5.6billion in September, this was down -4.4% sequentially and down -13.4% YoY.? Revenue was slightly above expectations due to AI data centre revenue growth.? TSMC’s Q3 revenue was US$17billion, down -11% YoY but up 8.9% compared to Q2 and slightly above their guidance, as iPhone related and AI demand helped to offset other declining market segments.

UMC reported monthly revenue of US$593million in September, revenue has stayed approximately flat for the last 4 months and was down -24.5% YoY. Q3 revenue was US$1.8billion, approximately flat compared Q2 and down -24.3% YoY.

VIS reported September revenue of US$107million, down -2% compared to Aug and down -6.8% YoY.? Q3 revenue was approx. US$329million, up 3.5% compared to Q2, and down -19.7% YoY

Powerchip reported revenue of US$1.9million for September, up slightly by 1% compared to Aug, but down -42% YoY.? Q3 revenue was ~US$324million, down ~9% compared to Q2, and down -46% YoY.

Renesas this week announced that it has received approval for it’s proposed acquisition of Sequans Communications and it has extended it’s tender offer to fully acquire all shares of Sequans until 23rd October.? As at 4th Oct it had acquired 6.7% of Ordinary Shares.? Sequans is a supplier of cellular connectivity chips and modules for 5G/4G massive and broadband IoT.

In market research news..

Geopolitical shifts will reshape the semiconductor landscape with Taiwan's Foundry, Assembly and Test share expected to drop to 43% and 47%, respectively, in 2027 according to the latest report from IDC. With the implementation of the chip acts and semiconductors policies by various countries, semiconductor manufacturers?are being forced to change their supply chains to become less depend on Taiwan or China. The industry will migrate from global collaborations to multi-regional competitions.

Global semiconductor industry sales totalled US$44billion in August 2023, a sequential increase of +1.9% compared to the July but down -6.8% YoY according to the latest update from WSTS. This is the 6th consecutive month on month increase.? Global semiconductor sales are showing a slow and steady monthly increase as demand slowly picks up.? The year on year decline is at it’s lowest since October 2022.? ?

The global smartphone market will to continue to see year on year shipment declines in 2H23 due to soaring inflation and weakening consumption with emerging markets?according to the latest report form Digitimes Research. Global smartphone shipments in Q2 2023 were 250miilion units, down -8.7% YoY.? They are predicting that 567million smartphones will be shipped in 2nd half 2023, down -27% compared to the same period in 2022.? For 2024, Digitimes is predicting global shipments will be 1.08billion, down 20million units compared to it’s previous forecast in June.

8 inch Fab semiconductor capacity utilisation is expected to drop to 50~60% in 2nd half 2023 as persistent macroeconomic and inventory challenges will cause the anticipated recovery in demand to be pushed out according? to the latest analysis by Trendforce. ?Looking ahead to 2024, Trendforce does not see any indicators that the market will recover in Q1 and expects utilisation rates to remain at or below Q4’23 levels.? For the full year they predict average utilisation rates for 8” wafer Fabs in 2024 will be around 60~70%.?

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Stay safe and healthy... bye

The Tech week