The Tech Week that was... Sept 4~8

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.?

The ARM IPO, which could be the biggest IPO of the year, is generating a lot of news this week.? Softbank is aiming to sell 95.5million shares to raise around US$4.9billion in the IPO which if it reaches it’s target will value the Arm at around US$52 billion. Amongst the other stories are that the Arm IPO is reported to be 6 times over-subscribed which could indicate that Arm will reach it’s target price range of US$47~51 from the IPO. ?Elsewhere Apple has signed a deal with Arm through 2024 and “beyond”.? Whilst TSMC has said it is deciding whether to join Apple, Nvidia, Alphabet, Intel and AMD in the Arm IPO and expect a decision this week.

TSMC’s new 300mm Japan Fab (JASM) is reported be progressing on schedule and will be ready by the end of 2023, with some office space already completed and employees are reported to be moving in.? TSMC is expected to have around 400 employees transferred from Taiwan to the new factory.? In addition, 200 Japanese engineers from Sony are completing their training in Taiwan and returning to the new factory.? ?In addition, 125 new Japanese graduates joined JASM and are currently undergoing training in Japan.

ASE has said it will expand capacity at it’s new Penang, Malaysia factory as it is bullish on longer term semiconductor demand driven by artificial intelligence (AI) and people-to-machine and machine-to-people applications.? The first building is expected to begin operations in July 2024, and construction on a 2nd building will begin in 2025 according to ASE COO Tien Wu.

ASE is also planning to expand in the US through its subsidiary ISE Labs.? The company has acquired a building in San Jose for US$24million from IPG Photronics to expand capacity.

Two weeks after Intel said it would cancel its plan to acquire Tower Semiconductor for $5.4 billion after failing to get regulatory approval, the two companies have announced they intend to work together.? Intel this week announced that it would provide foundry services and 300mm manufacturing capacity to Tower. As part of the deal, Tower would use Intel’s plant in New Mexico, operated by Intel Foundry Services, investing up to $300 million to “acquire and own equipment and other fixed assets” that would be installed in the Fab to provide over 600,000 photo layer per month capacity.

The sad saga of Newport Wafer Fab in the UK continues.? Nexperia have revealed a proposal to reduce the number of empolyees by approx. 100 at the Fa b and begin a “restructuring Plan” after the company weas forced to cancel it’s investment plans for the Fab which it bought in 2021 after the UK government in November 2022 ordered the company to sell it’s 85% stake in the plant due to security concerns.

The Nikkei is reporting that TSMC is betting big on silicon photonics to make AI applications more powerful .? The company is looking to provide good silicon photonics integration systems to address current critical issues of energy efficiency and computing power for AI. TSMC's Yu said the company is working on technologies to build an integrated silicon photonics system using its advanced chip stacking and packaging technologies. The integrated system will combine and connect silicon photonics and different types of chips using TSMC’s chip packaging and stacking technology which is still under development and has not yet entered mass production.

Taiwans exports dropped for the 12th consecutive month in August but fell less sharply than expected and may return to growth in September as year end holiday shopping season kicks in.? Overall exports dropped -7.3% YoY whilst total shipments of electronic components fell -11% YoY and semiconductor exports dropped -10.4% according to government data.

Here is a roundup of Taiwanese Foundry August revenue results.? Apart from TSMC, which is seeing some increase due to iPhone orders, revenue is generally flat for the other foundries and well down on last years levels ?

TSMC reported that August revenue was down -13.5% YoY to US$5.9billion. This was up 6% compared to July and is the highest revenue in 7 months supported by robust demand for it’s 3nm technology ahead of the iPhone launch next month.

UMC reported August revenue of US$591million, down -25% YoY and marginally down compared to July revenue.

8” specialty foundry VIS reported August revenue down by -2% to US$110million due to decreased shipments.? This was down -29% YoY.? Powerchip reported August revenue approx. flat compared to Jul of US$108million.? This was down -46% compared to Aug 2022.

In market research news…

Global semiconductor industry sales totaled $43.2 billion in July 2023 , an increase of 2.3% compared to the June 2023 but -11.8% less than the July 2022 according to the latest data from World Semiconductor Trade Statistics (WSTS).? SIA CEO John Neuffer said that “the global semiconductor market has experienced modest but steady month-to-month growth this year, with sales increasing for the fourth consecutive month in July,” and that whilst “global sales remain down compared to last year, the year-to-year decrease in July was the smallest gap of the year to date, providing reason for optimism over the remainder of 2023 and beyond.”

Global semiconductor equipment billings dipped -2% YoY to US$25.8 billion in Q2 2023 , while quarter-over-quarter billings slipped -4%, according to the latest data from SEMI. SEMI said that whilst overall demand for semiconductor equipment remains strong, due to the current economic climate companies remained cautious in masking purchases, especially in Taiwan and North America.

Trendforce reports that the top ten semiconductor foundries reported a -1.1% QoQ revenue decline in Q2 2023 .? Overall Q2 revenue form the top 10 foundries was US$26.2billion, of which TSMC accounted for 56%.? Looking ahead they predict that foundry revenue will rebound from it’s lowest level but that the usual Q3 seasonal demand will be softer than in previous years.

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Stay safe and healthy... bye

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