Source to China Times, the International Semiconductor Industry Association (SEMI) forecasts that from 2023 to 2026, the global semiconductor industry will add 12 new 8-inch wafer fabs, with 8-inch fab monthly production capacity increasing by 14% to a historic high of 7.7 million wafers. In response, UMC stated that from a supply and demand perspective, capacity growth still lags behind demand growth. UMC emphasized that it remains optimistic about the future of the 8-inch wafer market, thanks to ongoing advancements in special processes and differentiation.

SEMI notes that the continuous rise in the penetration rate of electric vehicles (EVs) worldwide is driving substantial growth in the demand for inverters and charging stations. The future mass adoption of EVs is the primary driver for increased investments in 8-inch fabs and the continued expansion of global 8-inch fab capacity.

Examining the situation of new 8-inch fabs in various countries, Southeast Asia will see the largest capacity increase, with a growth rate of approximately 32%. SEMI predicts that China’s 8-inch fab capacity will follow, with an increase of about 22%, reaching a monthly production capacity of 1.7 million wafers. The United States, Europe, the Middle East, and Taiwan are expected to have growth rates of approximately 14%, 11%, and 7%, respectively.

SEMI reports that by 2023, China’s 8-inch fab capacity will account for approximately 22% of the global total, with Japan at around 16%, Taiwan at around 15%, and Europe, the Middle East, and the United States each at about 14%. Furthermore, to meet future market demand, suppliers such as Bosch, Infineon, Mitsubishi, Onsemi, and STMicroelectronics are accelerating their 8-inch fab capacity expansion. It is estimated that from 2023 to 2026, the 8-inch fab capacity for automotive and power semiconductors will increase by 34%.

Concerns have been raised about potential oversupply as global 8-inch fabs expand, but UMC, a major semiconductor foundry, states that given the current rate of 8-inch fab expansion worldwide, the increase in capacity is relatively modest compared to demand. From a supply and demand perspective, it is certain that capacity growth will not keep pace with the growing global demand for 8-inch wafers.

UMC further notes that while 8-inch fabs are increasing, demand is unlikely to remain stagnant. Currently, the majority of semiconductor fabs being built worldwide are 12-inch fabs, making the expansion of 8-inch fabs relatively limited, and the supply-demand balance has not worsened.

(Source: https://www.chinatimes.com/newspapers/20230922000218-260204?chdtv)

Source to media China Times, after an extensive promotional campaign, Huawei’s Mate 60 smartphone, which has regained attention in mainland China’s media and online platforms, has finally secured the second position in the Chinese domestic smartphone market for the 36th week (4^th~10^th, Sep.), with a 17% market share. It is just a 0.2% difference from the top-ranked Honor smartphone. Supply chain sources estimate that by the 37th week (11^th~17^th, Sep.), Huawei could potentially claim the top spot in market share.

According to reports from “Mydrivers,” Huawei’s smartphone sales have been improving lately, thanks to media and online promotion of the Mate 60. Data from authoritative market research organizations in the supply chain indicates that in week 36 (4^th~10^th, Sep.), Huawei achieved a 17% market share in smartphone sales, securing the second position in the Chinese smartphone market.

The report notes that although Huawei is ranked second, this achievement in market share comes amidst “well-known significant pressures.” Moreover, it trails only 0.2% behind the top-ranked Honor (17.2%). Supply chain insiders anticipate that by week 37 (11^th~17^th, Sep.), Huawei is poised to claim the top spot in market share, a remarkable feat considering the significant pressures facing the company.

The report highlights that Huawei’s current sales situation is characterized by a shortage of the entire Mate 60 lineup. Supply chain sources reveal that orders for the Mate 60 Pro have increased to 15-17 million units. Information from distributors indicates that Huawei began comprehensive sales of the Mate 60 Pro in physical stores starting from September 10th.

Analysts had previously expressed optimism about Huawei’s return to the high-end smartphone market in mainland China. The previous Mate50 series achieved sales of approximately 5 million units, and it is expected that the Mate 60 series could surpass 6 million units.

According to TrendForce research on the ranking of 2Q23 smartphone production, in China, Transsion (including TECNO, Infinix, and itel) eclipsed Vivo to secure the fifth spot for the first time ever. TrendFroce reveals that Transsion’s high production output benefited from a trifecta of inventory replenishment, new product launches, and its entry into mid-to-high-end markets. Demonstrating robust production performance since March, the company’s growth trajectory is poised to extend its momentum into Q3. Meanwhile, Vivo (including Vivo and iQoo) is treading cautiously amid a sluggish global economy, which is evident in its conservative production plan: Vivo churned out 23 million units in Q2—a modest quarterly increase of 15%—and as a result, slipped to sixth place in global rankings.

Xiaomi (including Xiaomi, Redmi, and POCO) is reveling in a bountiful Q2, posting production numbers of around 35 million units—a staggering seasonal uptick of 32.1%. This boom can be attributed to a strategic depletion of channel inventory coupled with the allure of new product launches. However, Xiaomi’s channel inventory still runs high, setting the stage for a Q3 that is likely to mirror its Q2 performance. On the other side of the spectrum, Oppo (including Oppo, Real, and OnePlus) also had a fruitful Q2. The brand primarily rode the wave of rebounding demand in Southeast Asia and other regions, amassing approximately 33.6 million units and marking a seasonal leap of 25.4%. With seasonal demands on the horizon, Oppo’s Q3 production is poised for an estimated growth of 10~15%, primarily targeting markets in China, South Asia, Southeast Asia, and Latin America, hot on Xiaomi’s heels.

Currently, the top-ranking Honor smartphone is also a Chinese smartphone manufacturer. Originally launched as a sub-brand under Huawei’s product line series in September 2011, it began independent operations on December 16, 2013. Towards the end of 2020, Honor separated from Huawei, and there were multiple rumors about Honor’s independent listing preparations, which the company denied. (Image credit: Huawei)

(Source: https://www.chinatimes.com/realtimenews/20230921005374-260409?chdtv)

• The competitive advantage of automotive GaN components is becoming increasingly prominent.

Leveraging their exceptional material characteristics, SiC components are rapidly making inroads into sectors such as automotive, renewable energy, and power PFC. Similarly, GaN components are excelling in the field of rapid charging for terminal devices. Additionally, GaN components are gaining greater visibility in the automotive and networking sectors.

In traction inverters and onboard chargers for electric vehicles, SiC components have already become the mainstream alternative to Si components. Furthermore, the demand for SiC components in automotive DC/DC converters continues to rise. As for GaN components, their potential remains significant in onboard chargers for electric vehicles, and their competitive edge is increasingly evident in automotive electronic components, LiDAR, wireless communication modules, and audio systems. It is estimated that by 2025, in the GaN component application market share, the new energy vehicle sector will account for 21%, representing an approximately 9% growth from 2023.

• China’s Semiconductor Self-Sufficiency offer it’s domestic supply chain a chance to seize opportunities.

Considering China’s position as the world’s largest automobile market, domestic automakers in China are highly enthusiastic about adopting innovative technologies and applications. It is anticipated that the Chinese market will be a major driver of demand for automotive GaN components. On the other hand, in the context of ongoing tensions between China and the United States, semiconductor self-sufficiency has become China’s primary policy for breaking through technological barriers and sustaining technological development momentum. Compound semiconductor is a project actively promoted by both the Chinese government and private sector, making China’s GaN component supply chain even more worthy of attention.

Currently, China’s domestic major GaN substrate and epitaxy suppliers include Sino Nitride Group and Nanowin. Companies specializing in GaN epitaxy include SinoGaN, Enkris Semiconductor, Genettice, and Best Compound Semiconductor. IDM manufacturers in this field include Sanan Optoelectronics, Silan, Runxin, CorEnergy, Innoscience, and SMEI. As the demand for automotive GaN components in China continues to rise, these aforementioned companies may seize the opportunity.

According to Taiwan’s Business Next, as Moore’s Law gradually reaches its limits, semiconductor manufacturers are transitioning from 2D to 3D chip stacking and packaging to increase transistor counts for improved performance. The final step, “packaging,” has become crucial. In line with this trend, Intel has announced the industry’s first glass-based substrate for advanced packaging, breaking traditional constraints, with mass production expected between 2026 and 2030.

Intel’s glass-based substrate packaging technology has been in development for a decade and was unveiled at the 2023 Innovation Day in Silicon Valley, USA. Intel aims to achieve the goal of accommodating 1 trillion transistors within a single package by 2030 using advanced glass-based packaging.

The rise of the AI wave has driven the demand for accelerated computing, increasing the requirements for chip density. Intel argues that current substrate materials consume more power and are more prone to expansion and warpage compared to glass, which better aligns with future needs. Industry analysts have noted that TSMC also has similar solutions.

According to Intel, Glass substrates can tolerate higher temperatures, offer 50% less pattern distortion, and have ultra-low flatness for improved depth of focus for lithography, and have the dimensional stability needed for extremely tight layer-to-layer interconnect overlay. As a result of these distinctive properties, a 10x increase in interconnect density is possible on glass substrates. Further, improved mechanical properties of glass enable ultra-large form-factor packages with very high assembly yields.

Glass substrates’ tolerance to higher temperatures also offers chip architects flexibility on how to set the design rules for power delivery and signal routing because it gives them the ability to seamlessly integrate optical interconnects, as well as embed inductors and capacitors into the glass at higher temperature processing.

According to a report from China’s Changjiang Securities released in May, the application of glass substrates in advanced packaging has been validated, and glass manufacturer Corning has introduced related products.

On the other hand, in a report by China’s Changjiang Securities released in May, the application of glass substrates in advanced packaging has been validated, with glass manufacturer Corning introducing related products.

(Photo credit: Intel)

Fueled by an AI-driven inventory stocking frenzy across the supply chain, TrendForce reveals that Q2 revenue for the top 10 global IC design powerhouses soared to US $38.1 billion, marking a 12.5% quarterly increase. In this rising tide, NVIDIA seized the crown, officially dethroning Qualcomm as the world’s premier IC design house, while the remainder of the leaderboard remained stable.

AI charges ahead, buoying IC design performance amid a seasonal stocking slump

NVIDIA is reaping the rewards of a global transformation. Bolstered by the global demand from CSPs, internet behemoths, and enterprises diving into generative AI and large language models, NVIDIA’s data center revenue skyrocketed by a whopping 105%. A deluge of shipments, including the likes of their advanced Hopper and Ampere architecture HGX systems and the high-performing InfinBand, played a pivotal role. Beyond that, both gaming and professional visualization sectors thrived under the allure of fresh product launches. Clocking a Q2 revenue of US$11.33 billion (a 68.3% surge), NVIDIA has vaulted over both Qualcomm and Broadcom to seize the IC design throne.

Qualcomm’s Q2 took a hit as the Android smartphone sector grappled with dwindling demand and Apple’s modem pre-purchases resulted in a subdued seasonal rhythm. Consequently, their revenue slid by 9.7%, rounding off at about US$7.17 billion. Broadcom, while benefiting from AI-ignited demand for high-end switches and routers, faced headwinds with revenue drops in server storage, broadband, and wireless. The result was a second-quarter revenue that essentially mirrored the previous quarter at around US$6.9 billion.

AMD’s Q2 performance plateaued at about $5.36 billion, weighed down by a slump in gaming GPU sales and its embedded segment operations. Conversely, MediaTek, after several quarters of inventory recalibration, witnessed a resurgence with components like TV SoCs and Wi-Fi stabilizing. The added impetus of urgent TV orders and escalating shipments for mobile phones, smart platforms, and power management ICs boosted MediaTek’s Q2 to a solid US$3.2 billion.

Marvell, though buoyed by AI deployments in data centers, faced headwinds with a decline in On-Premise Servers (enterprise private clouds). End-user demand remained frail, and with sectors like data centers, telecom infrastructure, and enterprise networking facing revenue drops, Marvell’s Q2 took a 1.4% hit, culminating at roughly $1.33 billion.

Taiwan’s IC design stalwart Novatek flourished as customers replenished TV-related inventories and ushered in novel products such as OLED DDI. Realtek, drawing strength from supply chain restocking of PC/NB-centric ICs, reported quarterly growths of 24.7% and 32.6%, respectively. Yet, without substantial signs of a holistic revival in end-sales and inventory restocking, growth in H2 seems set to face challenges.

Will Semiconductor secured the ninth spot with a Q2 revenue of $528 million, registering a modest decline of about 1.9%. Hot on its heels is the US-based power IC maestro, MPS, with its Q2 revenue tallying up to $441 million—a slip of approximately 2.2%.

Peering into Q3, while inventory levels across companies paint a rosier picture than H1, a pervasive end-user demand slump urges caution. However, a silver lining emerges with CSPs, internet titans, and private firms flocking to generative AI and large language models. As these high-value AI offerings gain traction, TrendForce projects that the top ten global IC design giants will continue their double-digit ascent in Q3, potentially reaching record-breaking figures.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com