The Tech Week that was... Oct 5 ~ 9

Welcome to my weekly newsletter with all the key semiconductor and technology news from around the world where you can catch up on all the key news in one easy read. As usual it was very busy in the world of semiconductors, so read on to find out all that happened.

 IBM is splitting into 2 public companies to diversify away from its legacy businesses to focus on high-margin cloud computing and AI services. IBM’s legacy businesses will be spun off into a new company called NewCo by the end of 2021. The NewCo will focus on managed infrastructure services and will have an annual revenue of US$19bn and 90,000 employees.

Chip maker AMD is reported to be nearing a deal to acquire Xilinx. The deal potentially is worth around US$30billion. AMD makes microprocessors and graphic processors whilst Xilinx offers FPGA’s and 3D IC’s and if the deal goes through would give AMD a bigger data centre presence and would allow AMD to compete better with Intel. If the deal goes through it would be the 3rd major semiconductor acquisition of 2020, after Nvidia’s US$40bn deal for Arm and Analog Devices US$21billion for Maxim, and would take the total M&A total for 2020 to over US$90billion, close the highest ever year of 2015 which saw US$107.7billion in M&A activity.

Speaking at the Arm development summit, Nvidia CEO, Jensen Huang said he was confident the company would get regularly approval for it’s US$40billion acquisition of Arm.

UK Epi wafer foundry IQE has acquired the outstanding stake in it’s majority-owned subsidiary IQE Taiwan making it 100% owned.

Taiwan’s foundry and OSAT revenues for September were released last week, and overall Q3 revenues were up compared to both Q2 and a year ago.

TSMC recorded its 2nd successive record revenue month last month reporting revenue of US$4.4billion. TSMC said that the increase was driven mainly by solid demand for chips for 5G equipment, Internet of Things (IoT) and high-performance applications, as well as for 5nm chips for Apple’s next generation iPhone 12, and its iPad Air and iPad Pro. For Q3 as a whole, TSMC recorded revenue of US$12.46billion, up 9% on Q2 and up almost 22% on a year ago. 

Number 4 ranked wafer foundry UMC reported revenue of US$508million for September, up 34% compared to a year ago, but down on August. For Q3 it posted revenue of US$1.57billion, up 4.7% on Q2.

OSAT ASE reported September revenue of US$778million for it’s Assembly Test and Materials group will includes both ASE & SPIL, this is down almost 8% sequentially. For Q3 revenue was US$2.44billion up 5% on Q2 and up 12% compared to a year ago.

 Optoelectronic device manufacturer NeoPhotonics has announced it will consolidate it’s InP production and will cut staffing by 4% as it sees an impact from the US Huawei restrictions. 

In it’s Q3 earning guidance, Samsung predicted that it’s Q3 sales would be around US$57billion, up 6.5% compared to a year ago, as its chip business remained solid despite declining memory prices, and its mobile sales bounced back up. 

Korean memory manufacturer SK Hynix this week launched it’s next generation DRAM DDR5 which boasts faster transfer speed, and says it is working closely with Intel to sample products.

Trendforce is predicting that overall memory ASP’s will decline by almost 10% in Q4 due to the current over supply situation for both DRAM and NAND flash. Although some manufacturers have been building inventory in light of the US sanctions on Huawei, this is not enough to offset the sluggish state of the memory market. Trendforce predicts that the situation will improve slightly in Q1’21 for DRAM but ASP's will decline further for NAND.

 According to market research company Strategy Analytics, Sony remained the worlds leading smartphone image sensor company with 44% market share in the first half of 2020, whilst Samsung was 2nd with 32% share. Chinese company OmniVision Technologies was 3rd with 9% market share. 

The Semiconductor Industry Association (SIA) released it’s August worldwide semiconductor sales figures which were $36.2 billion in August 2020, up 4.9% compared to a year ago and up 3.65% sequentially.  Sales into the Americas were the main growth area where sales increased 23.6% year on year. On a sequential basis sales in all regions increased.

According to Digitimes Research, global smartphone shipments are expected to grow by 150 million units in 2021, after three consecutive years of declining shipments driven by 5G sales. They expects global shipments of 5G phones to reach over 200 million units in 2020 and to expand to over 1.22 billion units by 2025.

According to Yole, the global VCSEL market will grow with an annual CAGR of 18.3% in the next 5years, and the total global market will increase from more than US$1billion in 2020 to US$2.7billion in 2025. The main growth will be in telecom and datacom sectors.

Chinese foundry SMIC has confirmed that it’s US suppliers have been issued with letters telling them that they are subject to US export restrictions on goods supplied to SMIC, as the US continues to escalate it’s trade war with China. This article by Hong Kong based news site AsiaTimes looks at the implications.

At this year’s virtual ERI conference, the US Department of Defence’s Ellen Lord told how the DoD is now proposing a step-by-step process for reshoring the microelectronics supply chain in the USA, to reverse years of semiconductor manufacturing moving overseas causing a national security risk.

In a bid to increase the semiconductor talent in Taiwan and keep the local industry competitive, Taiwan’s government will launch a program to train technicians, engineers and researchers for the semiconductor and IC chip industries. It will commit US$330.81 million to a 12-year program that includes expanding the semiconductor technology colleges at four universities in a bid to support it’s semiconductor industry.

The LaSAR Alliance (Laser Scanning for Augmented Reality) has been formed to develop and accelerate Augmented Reality (AR) smart-glass products. Founding members of the LaSAR Alliance include ST, Applied Materials, Dispelix, Mega1, Osram, and ST.

Broadcom has ended it’s dispute with the EU over exclusivity deals. “Broadcom will suspend all existing agreements containing exclusivity or quasi-exclusivity arrangements and/or leveraging provisions concerning Systems-on-a-Chip (SoCs) for TV set-top boxes and Internet modems, and has committed not to enter into new agreements comprising such terms,” says the EU competition regulator. The 15 month probe by the EU regulators had been threatening to impose a banning order on these deals.

That’s all for this week, if you enjoyed this article, why not subscribe to my week newsletter so you don’t miss another issue.

Stay safe and healthy.. bye.