Recently, the semiconductor industry has seen three acquisitions.

Qualcomm announced the acquisition of Foundries.io, a leading provider of IoT and cloud development security services, with its flagship product FoundriesFactory being well-regarded in the industry. Microchip Technology acquired Neuronix AI Labs to enhance its capabilities in developing highly efficient AI edge solutions on Field-Programmable Gate Arrays (FPGA). Runjing Chemical, a developer of Tetramethylammonium Hydroxide (TMAH), announced the acquisition of two plants in China from Sumitomo Chemical, aiming to strengthen its competitiveness in the wet electronic chemical market in China.

• Runjing Acquired Sumitomo Chemical’s Two Plants

On April 16th, Runjing Chemical announced that it has acquired two plants in China from Sumitomo Chemical.

Runjing disclosed that it has reached an agreement on the full acquisition of Sumitomo Chemical’s subsidiaries, Sumitomo Chemical Electronic Materials (Hefei) Co., Ltd. and Sumitomo Chemical Electronic Materials (Chongqing) Co., Ltd., and both parties have completed the signing of the equity transfer contract.

Upon meeting the relevant items stipulated in the equity transfer contract, Hefei Sumitomo Chemical and Chongqing Sumitomo Chemical will become wholly-owned subsidiaries of Runjing.

Sumitomo Chemical, founded in 1913, has been engaged in the production of process chemicals for flat panel displays (FPD) in China since 2009. The two acquired subsidiaries focus on providing etchants, developers, and peelers with stable quality for downstream customers.

Founded in 2008, Runjing is a manufacturer of TMAH developer and offer products to major global panel manufacturers such as Samsung, LG, BOE, HKC, CSOT, and Tianma. In 2020, Runjing Technology established XINKE Electronic Materials in Hefei to produce high-purity semiconductor-grade products including hydrogen peroxide, ammonia water, and isopropanol, which has begun product introduction at its 12-inch fabs.

Runjing stated that through this acquisition, it will take over Sumitomo Chemical’s technological advantages and business network, enable it to quickly expand its product portfolio (Etchants, peelers, and CF developers, etc), and provide customers with a variety of comprehensive solutions, thereby enhancing Runjing’s competitiveness in the wet electronic chemical market in China.

• Qualcomm Acquired Foundries.io

Qualcomm recently disclosed its acquisition of Foundries.io in a press release regarding a WiFi product launch. Foundries.io is known as an open-source cloud-native platform provider, specializing in simplifying the complexity of developing Linux-based IoT and edge devices, and updating these devices.

Foundries.io was co-founded by executives and engineers. Headquartered in Cambridge, UK, it is recognized as a pacesetter in its field. The company’s  cloud-native DevOps products fitted for interconnected embedded security devices can expedite time-to-market and reduce costs for OEMs across industries.

Foundries.io reportedly established close relationships with ARM and its chip partners, adopting ARM SystemReady technology. It has developed Linux distribution that is the first to fully integrate Project Cassini and provide commercial support for it. Project Cassini is an open, collaborative, and standards-based program by ARM.

• Microchip Acquired Neuronix AI Labs

According to Microchip Technology’s press release, Microchip Technology recently acquired Neuronix AI Labs to enhance its capabilities in developing high-efficiency, AI-supported edge systems on FPGA. Neuronix AI Labs delivers neural network sparse optimization technology, which can reduce power consumption, size, and computation for tasks such as image classification, object detection, and semantic segmentation while maintaining high accuracy.

Microchip’s mid-range PolarFire® FPGA and SoC are already ahead in the industry in terms of low power, reliability, and security features. Acquiring such neural network sparse optimization technology will enable Microchip to develop large-scale edge deployment components with high cost-effectiveness and efficiency, which are specifically designed for computer vision applications on systems requiring low cost, small size, and low power consumption, thus enabling AI to exponentially increasing ML processing capabilities on low-end and mid-end FPGA.

The acquisition also gives our traditional Microchip MCU and MPU clients the ability to use FPGAs as accelerators through an easy-to-use compiler that will substantially improve their design productivity and system performance while shortening their time to market

Bruce Weyer, Vice President of Microchip’s FPGA Business Unit, said, “This acquisition will improve the efficiency of our FPGA and SoC deployed in intelligent edge systems utilizing AI/ML algorithms.” He added, “Neuronix technology, combined with our VectorBlox design flow, can enhance neural network performance efficiency and delivers outstanding GOPS/Watt performance in our  PolarFire FPGA and SoC with low power consumption. System designers can now build and deploy small hardware, which was previously difficult to achieve due to limitations of size, heat, or power.”

The neural network sparse optimization technology will allow non-FPGA designers to leverage the powerful parallel processing capabilities of industry-standard AI frameworks without deep knowledge of FPGA design processes.

Neuronix AI intellectual property, coupled with Microchip’s existing compilers and software PDK, can achieve AI/ML algorithms on customizable FPGA logic without the need for specialized knowledge of Register Transfer Level (RTL) or a deep understanding of underlying FPGA architecture. It also allows for dynamic updates and upgrades of CNNs without reprogramming the hardware.

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• [News] Battle in AI PCs: Exploring Intel, AMD, and Qualcomm Chips’ AI Computing Power

(Photo credit: Qualcomm)

On January 8th, leading U.S. microcontroller (MCU) and analog IC manufacturer Microchip raised concerns, stating that the revenue for the last quarter would experience a more significant decline than previously estimated, falling short of overall expectations.

The market perceives Microchip’s financial report as an alarm, revealing the continued sluggishness in sectors such as automotive and consumer electronics. These areas heavily rely on mature process production for related products, impacting mature process-focused foundries like UMC (United Microelectronics Corporation) and Vanguard International Semiconductor (VIS).

Industry sources analyze that Microchip’s warning of poor financial results indicates that, amid the unstable overall economic situation, further observation might be necessary for evaluating this year’s semiconductor market conditions.

Microchip is the global leader in the 8-bit microcontroller market, with a wide range of chip applications that virtually span across all industries. Its customer base exceeds 125,000 in industrial, automotive, consumer, defense, communication, and computer markets. Due to its diverse coverage and extensive customer base, Microchip is regarded as a crucial indicator for observing the semiconductor market.

Market expectations were initially optimistic that, after last year’s industry inventory adjustments, the overall semiconductor market conditions would gradually recover this year. Additionally, the anticipation of new trends such as AI smartphones and AI PCs was expected to drive mid-to-long-term demand in the industry.

However, Microchip’s concern seems to introduce more uncertainty into the market. According to Microchip’s latest projections, the revenue for the third quarter of the fiscal year ending in December is expected to decrease by approximately 22%, surpassing the earlier estimated range of 15% to 20% and significantly exceeding Wall Street’s forecast of 17%.

Microchip’s CEO, Ganesh Moorthy, mentioned in a press release: “The weakening economic environment that our customers and distributors faced during the December 2023 quarter resulted in many of them wanting to receive a lower level of shipments as they took actions to further de-risk their inventory positions.”

Moorthy pointed out that many customers, in their ongoing management of operational activities at the end of the last quarter, extended the closure time of facilities.

He stated, ” The impact of these and related factors was that certain backlog that we had planned to ship when we provided our guidance on November 2, 2023 did not ship to customers before the end of the December quarter. ”

Microchip will release its complete financial report for the last quarter on February 1st.

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• [News] Resolution of Labor Dispute Paves the Way for Accelerated Equipment Installation at TSMC’s US Fab

(Photo credit: Microchip)

Semiconductor inventory adjustments are showing positive signs, with the MCU market, which was among the first to bear the brunt of price pressure, now leading the way as Chinese companies have recently ceased their aggressive price-cutting strategies to clear their inventory. In fact, some MCU product lines have even begun to see price increases.

According to reports from Taiwan’s Economic Daily, MCUs are widely used across various key sectors, including consumer electronics, automotive, and industrial control. The recent increase in pricing suggests a resurgence in end-demand, indicating that the semiconductor industry is on the path to recovery.

Prominent global MCU manufacturers include Renesas, NXP, and Microchip, all of which play essential roles in the global semiconductor industry. On the other hand, Taiwanese companies such as Holtek, Nuvoton, Elan, and Sonix represent the local landscape.

Industry experts attribute the current developments to the COVID-19 pandemic, which caused disruptions in the supply chain throughout 2020 and 2021, leading to a frenzied rush to secure semiconductor components. This resulted in a surge in orders and significant price increases for ICs. However, 2022 marked a change in the industry landscape as demand weakened in various end-user applications. MCUs were hit hardest, and manufacturers’ inventories climbed steadily, reaching historical highs, with some industry leaders acknowledging that their inventory levels reached several months’ worth of supply.

To address the challenges posed by these soaring inventories, the MCU industry faced its darkest period from the fourth quarter of last year to the first half of this year. Chinese MCU manufacturers resorted to aggressive price cuts, even drawing renowned IDMs into the price-cutting competition. Fortunately, recent market conditions have started to ease the inventory-clearing phase. Chinese MCU manufacturers, who could no longer bear losses, have stopped selling below cost and have even made slight price adjustments to return to a more reasonable pricing range.

Unnamed Taiwanese MCU manufacturers revealed that as the attitude of Chinese companies towards price-cutting has softened, the pricing gap between products from Taiwanese and Chinese companies have gradually narrowed. Moreover, there are indications of small, urgently needed orders coming in, which will facilitate faster inventory reduction.