The Tech Week that was... Sept 20~24

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 the latest market analysis indicates that the boom in semiconductors will continue with record revenues predicted for 2021 through to 2025.?The global chip shortage is still impacting the automotive industry and is expected to continue into 2022, plus lots of other news.?

This week 2 market research companies updated their market forecasts for 2021 until 2025 with very positive outlooks.?IC Insights giving an update of it’s forecast for the foundry market whilst IDC gave it’s update of semiconductor market as a whole

In the latest update by IC Insights, they predict that the foundry market will grow 23% in 2021 to US$107billion in sales.?This is fuelled by robust demand for advanced processors used in networking and data center computers, new 5G smartphones, and ICs used in other high-growth market applications such as robotics, self-driving vehicles and driver-assist automation, artificial intelligence, machine-learning and image recognition systems.?They predict that foundry sales will continue to grow by 11.6% annually to reach sales of US$151billion by 2025.

?IDC in it’s latest update expects the semiconductor market to grow 17.3% in 2021.?Whilst it reports that foundries will be full at near 100% utilization through to the end of the year, it believes the chip supply will be in balance by the middle of 2022, and sees the possibility of overcapacity in 2023 as new capacity comes on line. Overall, IDC predicts the semiconductor market to reach US$600 billion by 2025, representing a CAGR of 5.3% between 2021 to 2025.

Trendforce is predicting that memory prices will fall in Q4 2021.?DRAM prices are predicted to fall 3~8% quarter on quarter in Q4 as supply outstrips demand, whilst NAND flash will see 0~5% quarter on quarter declines as demand has fallen for consumer electronics such as smartphones, Chromebooks, and TVs during this second half of the year. At the same time, demand remains sluggish for retail storage products including memory cards and USB drives. Data centers and enterprise servers represent the only applications that show relatively strong demand.

SEMI released their August North America-based semiconductor equipment manufacturers worldwide billings report.?Billings in August were 5.4% lower than July at US$3.65 billion.?Whilst the 8 month long streak of increasing billings softened in August, billings overall were still remain strong in August with year on year growth being 37.6%.?

The Washington Post is reporting that the global semiconductor shortage which has been ongoing for over a year now is showing signs of worsening as the Delta variant of the virus spreads across South East Asia halting chip assembly plants, and causing new bottlenecks in the supply chain.

?Consulting company AlixPartners is now predicting that the global chip shortage will now cost the global automotive industry US$210billion in lost revenue, double it’s May forecast, as it predicts that 7.7million units of production will be lost in May.?It predicts the parts shortage will continue at least in Q2 2022.?IHS Markit last week cut it’s light vehicle production forecast by 6.2% for 2021 to 75.8million vehicles, and cut it’s 2022 forecast by 9.2% to 82.6million vehicles as a result of supply chain challenges.

?Whilst automotive production has definitely been impacted by the global chip shortage, analysts are predicting that at least for South Korea’s top 2 carmakers, Hyundai and Kia there will be limited impact on their third quarter earnings.?Hyundai is expected to report operating profit of US$1.5billion despite the production loss of 70,000 units in 1H 2021 alone.?Similarly, Kia is expected to report an operating profit of around US$1.2billion despite the production loss of 60,000 units in 1H 2021.?

Bloomberg expects the current global boom in semiconductors still has room to run based on key indicators it looked at.?Looking at semiconductor equipment sales the momentum is still good, and is seen as a leading indicator of revenue to come.?Global chip prices are showing no signs of falling and shipments from Taiwan show exports are still growing and reached record levels in August.?Semiconductor leadtimes are also still growing and are now about 21weeks, up 6 days from July.?Inventory levels at Korean manufacturers grew slightly last month but still remain the same level as during the 2017 chip boom. ?

This week the White House held a meeting with top semiconductor suppliers to get an update on the progress the industry has made to address the semiconductor supply chain shortages.?Attendees of the meeting?included; Intel, Apple, Microsoft, Samsung, TSMC, Micron and leading automotive makers.?The White House said it expects the industry to be in the lead to?resolve the current shortages.?At the meeting, the U.S. Commerce Department requested information from “all parts of the supply chain – producers, consumers, and intermediaries – to voluntarily share information about inventories, demand, and delivery dynamics within the next 45 days.. The goal of the RFI is to understand and quantify where bottlenecks may exist.

As the global chip shortage goes on, the incidence of counterfeit or sub-standard chips entering the market has increased as buyers turn to “unconventional sources” to acquire chips.?2 articles this week touch on the topic, one in eeNews reports of receiving similar but lower standard chips, sometimes with altered package markings in some cases.?In other cases customers receive chips that have failed quality checks or have been reclaimed from discard equipment and sold as new.?Whilst epsnews also reports on the problem when companies are forced into ordering from non authorised sellers, due to lack of supply through normal channels.

Brooks Automation has announced it will sell it’s Semiconductor Solutions Group to private equity company Thomas H Lee Partners for US$3billion, expected to complete in first half of 2022. ?As a result of the sale, Brooks will no longer pursue a separation into two independent and publicly traded companies as announced in May 2021. The Brooks Automation name and brand will transfer together with the sale to THL, whilst the remaining life sciences business will then operate as a standalone publicly traded life sciences company, under a new name to be announced in the near future.?

This week Intel held its ground breaking ceremony for it’s 2 new Fabs in Chandler, Arizona, The 2 Fabs are a US$20billion project which are part of Intel’s IDM 2.0 strategy.

Huawei’s CFO Meng Wanzhou has been released from detention in Canada where she has been held the last 3 years awaiting extradiction to the US.?Her release came after agreement with US prosecutors was reached to drop the bank fraud case against her. ??The case against Huawei is still ongoing and the justice department is continuing to prepare for trial.

As Apple release its latest iPhone 13 to the market, TF Securities analyst Ming-Chi Kuo?has released his predictions for upcoming iPhone releases through 2024.?He is predicting that next years model, Apple’s high-end “pro” models could include a new design with a “punch-hole” display for the front-facing camera, instead of the notch on current devices, and a 48-megapixel camera, whilst in 2023 he believes they will release a new iPhone with a fingerprint scanner underneath the screen and a foldable screen iPhone in 2024.

That's all for this week. If you enjoyed what you read, why don't you subscribe to my free newsletter and automatically stay up to date with all the industry news.

?Stay safe and healthy... bye.

?

?

?