The Tech week that was... Oct 3~7

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’s news includes the latest Q3 revenue numbers from Taiwans Foundries as well as Q3 guidance from Samsung Electronics and AMD, the latest US semiconductor trade restrictions, announcements by Micron, STM on new capacity investment plans plus the latest market research news.

This week, the Taiwanese foundries released their Sept and Q3 preliminary results.?Whilst TSMC and UMC are still so far managing to keep growing despite the downturn in consumer electronics, the smaller foundries all showed a decrease in revenue.

?TSMC announced its September and Q3 revenue results, reporting revenue of $6.56billion for September, up 36.4% year on year (yoy). This was down -4.5% from it’s record high in August,?but still its 2nd highest monthly revenue in 2022.?For Q3, revenue was a record US$19.4billion, up 48% yoy. TSMC’s revenue in Q3 probably benefited from the launch of Apples iPhone 14 and other devices.?

UMC reported September revenue of US$795million, up 34.5% yoy.?Like TSMC, September was UMC’s 2nd highest revenue month, following its record high in August.?For Q3 2022 UMC reported record quarterly revenue of US$2.4billion, up 35% yoy.?

Vanguard International Semi (VIS) reported a -26% decrease in revenue in September to US$116million.?This was VIS’s lowest revenue of 2022 and down -11.5% yoy due to a reduction in wafer shipments of display driver and power managements IC’s, as an inventory build up notably amongst flat panel makers has reduced orders.?For Q3 VIS reported revenue to US$420million, which was in line with its forecast for Q3.?This was down -13% ?sequentially, but still up 13% yoy.

?Powerchip also reported a -6% sequential decrease in revenue to US190million.?This was Powerchip’s 5th consecutive month of decreasing revenue, and for the first time this year was down compared to a year ago, -0.4% yoy.??Q3 revenue was US$605million, down -12% sequentially.

Elsewhere..

?Samsung Electronics in its preliminary earning guidance indicating that revenue will fall -1.6% sequentially in Q3 to approx. US$53billion as the economic downturn dampened demand for electronic devices and the memory chips.?This is up 1.4% year on year.

Despite the significant decrease in revenue and profit Samsung says it has no plans to reduce production at the current time.?Han Jin-man Exec VP and Head of Global Sales and Marketing at Samsung said "Samsung's basic position on this matter is that there should not be artificial production cuts," while stressing that Samsung "is trying to make sure there is neither a chronic shortage nor oversupply of chips in the market."

AMD also announced its preliminary Q3 earnings guidance, forecasting revenue of US$5.6billion, this was US$1.1billion lower than it’s previous guidance, and down -15% sequentially.?The lower revenue was due to lower than expected Client segment revenue resulting from reduced processor shipments due to a weaker than expected PC market and significant inventory correction actions across the PC supply chain.?Revenue for the Data Center, Gaming, and Embedded segments each increased significantly year-over-year.

?In other semiconductor news…

The US Chamber of Commerce has introduced broad measures to further restrict sales of semiconductor technology to China in a bid to prevent "sensitive technologies with military applications" from being acquired by China. The news rules will restrict China’s ability to obtain advanced computing chips used for artificial intelligence, it will also bar equipment manufacturers from exporting critical manufacturing tools as well as barring US persons including companies from providing direct or indirect support to Chinese companies involved in advanced chip manufacturing.?The US also added YMTC, along with 30 other Chinese entities, on a list of “unverified” companies paving the way for possibly adding them to the “entity” list that blacklists companies in future.

Micron has announced it will invest up to US$100billion over the next 20years to build a a new Megafab in Onondaga County, New York.?The new memory Megafab will increase domestic supply of leading-edge memory and create nearly 50,000 New York jobs, including approximately 9,000 high paying Micron jobs according to Micron. The first phase investment of US$20billion will be built by 2030.?The site could eventually include four 600,000 square foot cleanrooms, for a total of 2.4 million square feet of cleanroom space – the size of approximately 40 U.S. football fields.?The move follows the passing of the US CHIPS and Science Act which provides subsidies for companies setting up manufacturing in the US.

STMicrolectronics has announced it will build a new US$728million silicon carbide wafer plant in Italy funded by subsidies from the European Chips Act.?The SiC substrate manufacturing facility, will be built at ST’s Catania site in Italy alongside the existing SiC device manufacturing facility, to produce 150mm SiC epitaxial substrates. Production is expected to start in 2023, enabling a balanced supply of SiC substrate between internal and merchant supply.

Spain will launch its first commercial III-Vs foundry, targeting integrated photonics with production expected to start late 2023..?The city of Vigo, Spain is to be the location of a new foundry for III-V semiconductor-based photonics. SPARC (the III-V Semiconductor Foundry and Advanced Photonics Research Center) will consist of a 1600m2 cleanroom for wafer production, and a research center that will assist customers in bringing fully certified integrated photonic products to market.

?In market research news…

?Global semiconductor industry sales were $47.4 billion in August 2022 (3 month moving average) in the latest data from World Semiconductor Trade Statistics (WSTS) organization. This is a slight increase year on year of +0.1%, but a decrease of -3.4% compared to July sales. ?“Global semiconductor sales growth has stalled in recent months, and month-to-month sales decreased in August by the largest percentage since February 2019,” said John Neuffer, SIA president and CEO. “Sales into Europe paced all regional markets, while sales into China saw the sharpest declines.”

The production value of the Taiwan semiconductor industry is expected to grow +15.8% this year to US$135.4 billion, following robust growth of 26.8% ?last year, according to the latest data from the Market Intelligence & Consulting Institute (MIC).?The institute attributed the growth in output to production growth by TSMC, which helped cushion the impact of an industrial slump due to shrinking demand for consumer electronics.?Taiwan’s growth this year expected outpace the global semiconductor industry’s forecast annual expansion of 8.9% ?percent amid a drastic revision to projected shipments of notebook computers, smartphones and TVs, it said.

Global smartphone shipments in Q2 2022 fell by 7.3% year-on-year to 291 million units according to market research firm Strategy Analytics. This is the 4th consecutive quarter of year on year decline in smartphone volumes.?Samsung still held top position with 21.5% market share as smartphone shipments grew 9.5% yoy.?Apple took 2nd position with growth of ?3.3% yoy having 16.3% marketshare.?Chinese manufacturers Mi, Oppo and Vivo all saw big year on year declines of over -20% as COVID disruption and geopolitical issues adversely impacted the smartphone market.

Power Transistor sales are expected to increase 11% in 2022 to reach US$24.5billion, the 6th consecutive year of record sales according to IC Insights.?However they are predicting that sales will decrease in 2023 by -2% to US$24billion, before growing again between 2024 and 2026 reaching US$28.9billion.

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As COVID numbers start to rise in many countries, do stay safe and healthy... bye