The Tech Week that was.. Sept 14~18

Welcome to my weekly newsletter with all the key semiconductor and technology news from around the world. This week the biggest news was the acquisition of ARM holdings by Nvidia, but there was lots of other news going on, so read on to catch up in one easy read on everything you need to know

 The biggest news this week was the announcement, after many months of speculation, that US based Nvidia had acquired IP provider ARM Holding’s for around US$40billion from Softbank, in what will be biggest semiconductor acquisition in history if it goes through. Nvidia committed to keep the business based in the UK and to retain the ARM brand. Questions are raised about the conflict of interest between Nvidia and the IP ARM sells to other competitors and also the impact of the sale to a US company will have on sale of the technology to China. The battle now will be to get approval for the acquisition by all the regulatory authorities and already there is speculation that China may not approve the sale on anti-competitive grounds.

SEMI published its analysis on North American Semiconductor Equipment sales for August and reported sales of US$2.65billion, up almost 33% compared to a year ago. SEMI president and CEO said that ““Semiconductor equipment demand remains robust despite supply chain uncertainties and new regulatory constraints.”

According to the latest report from IC Insights they forecast that the total microprocessor sales will grow 1.4% in 2020 to nearly US$79.3billion. Traditional CPU for PC’s and servers will account for 49% of the market, whilst cellphone MPU’s will have 26% market share and embedded MPU’s 21%. This increases follows last years 2.4% drop in revenue which was the first decline in the worldwide MPU market in 10 years.

A Moody’s investor report estimated that TSMC sales will rise 21% this year to US$44billion, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices 

An article by Shinhan Investment group forecasts that 2021 will be another big year for memory markets. Supply is forecast to tighten further at inflection points in process technology, such as the shift to DDR5 and adoption of EUV in DRAM and transition to multi-tier structures in NAND. Demand should improve with the release of new game consoles, new platform launch by Intel, shift to 5G smartphones, and transition to DDR5. Upon removal of COVID-19 impact, another big cycle for memory is expected in 2021-2022.

SIA together with Boston Consulting Group published it’s analysis of the potential impact of US federal incentives on the US semiconductor manufacturing market. It finds that with US$50billion of federal incentives, 19 new fabs could be built and create 70,000 jobs over the next 10 years which would help turn the tide on the steady decline in global semiconductor manufacturing done in the US from the current ~12% to account for 13~14% of the world capacity. In 1990 the US accounted for 37% of the global chip production.

Reports from China indicate that Chinese consumers are rushing to Huawei smartphones before the current stock of high end Kirin chips runs out due to export controls. The price of new and used Huawei models has increased steadily over the last month.

This week Sony announced the release of it’s new PlayStation 5, but there are reports that the overall production of the console maybe reduced this year by 4million units to around 11million units this year due to yield issues producing the it’s SOC IC.

SMIC who last week were subject to speculation that the company itself would be added to the “Entity List”, this is reported to have applied to Washington for a licence to keep supplying to Huawei after the extended ban on supplying Huawei came into effect this week.

The IP protection battle continues in the courts for the LED segment. This week Seoul Semiconductor has successfully obtained a permanent injunction in the US courts in it’s patent infringement lawsuit against The Factory Depot Advantages Inc, that sold Philips electronic products and Feit lighting products. 

Elsewhere Nixon Peabody announced a major expansion of its patent enforcement campaign on behalf of the Regents of UCSB with new litigation against six leading retailers and suppliers of filament LED lighting products. The goal of the campaign is to license UC’s patents covering the reinvention of the light bulb at UC Santa Barbara and to protect UC’s licensees from unlicensed competition.

A report by Strategies Unlimited on the impact of COVID-19 on the laser market reports that the overall growth of the market in terms of growth and revenue impact has not been as severely impacted as feared.  Focusing on the materials processing and communications segments, which together make up the largest parts of the global laser market, the report indicates that current laser revenues are holding up quite well so far but there maybe a slight drop in future revenues.

Osram raised it’s guidance for fiscal year 2020 which ends in September saying it has seen strong recovery in the summer, particularly in August. The Managing Board of Osram now expects a comparable revenue decline of approximately -14%, comparing to previous number of -15% to -19%. The adjusted EBITDA margin is now approximately 8%, which the company set at 3% to 6% previously. Osram also said that it will reach a balanced free cash flow, while it had expected a negative Free Cash Flow in the middle double digit to lower triple digit million range.

French company Aledia plans to invest US$166million to set up a new GaN-on-Si Micro LED production line in Champagnier, France. Production is planned to start in 2022. Aledia, founded in 2011, has developed a technology to grow 3D GaN LEDs on 200 mm silicon wafers using CMOS wafer-fabrication processes and tools, which it says is cheaper than traditional methods.

Finally as many of us have been working from home due to COVID-19, this article in the economist which looks at the future of the office and how COVID-19 has forced a radical shift in working habits may interest you. The article finds that around 40% of the workforce have jobs that allow them to work effectively at home. 

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.