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Press Releases
Consumer Terminals Market Reverses as Tide of Shortages Recedes, 2Q22 Output Value Growth at Top 10 Foundries Falls to 3.9% QoQ, Says TrendForce

2022/09/27

Semiconductors

According to TrendForce research, due to steady weakening of overall demand for consumer electronics, inventory pressure has increased among downstream distributors and brands Although there are still sporadic shortages of specific components, the curtain has officially fallen on a two-year wave of shortages in general, and brands have gradually suspended stocking in response to changes in market conditions However, stable demand for automotive and industrial equipment is key to supporting the ongoing growth of foundry output value At the same time, since the creation of a marginal amount of new capacity in 2Q22 led to growth in wafer shipments and a price hike for certain wafers, this drove output value among top ten foundries to reach US$3320 billion in 2Q22 Quarterly growth fell to 39% on a weakening consumer market A prelude to inventory correction was officially revealed in 3Q22 In addition to intensifying severity in the initial wave of order slashing for LDDI/TDDI, and TV SoC, diminishing order volume also extended to non-Apple smartphone APs and peripheral IC PMIC, CIS, and consumer electronics PMICs, and mid-to-low-end MCUs, posing a challenge for foundry capacity utilization However, the launch of the new iPhone in 3Q22 is expected to prop up a certain amount of stocking momentum for the sluggish market Therefore, top ten foundry revenue in 3Q22 is expected to maintain a growth trend driven by high-priced processes and quarterly growth rate is expected to be slightly higher than in 2Q22 With tide of inventory correction approaching, foundries furiously migrate production capacity to sectors of stable demand such as automotive and industrial equipment Benefiting from strong demand for HPC, IoT, and automotive stocking activities, TSMC posted 2Q22 revenue of US$1815 billion but quarterly growth rate contracted to 35% due to wafer mark ups inflating the 1Q22 revenue base period As Nvidia, AMD, Bitmain, and other HPC customers continue to ramp up their new products for more advanced nodes, 5/4nm revenue increased by approximately 111% QoQ, securing this node the best revenue performance in 2Q22 Although the 7/6nm market was uncertain given murky mid/low-end smartphones market conditions and client order revisions, the node maintained a backstop in the form of mainstream products originating from HPC customers Revenue generated by this node increased by 28% QoQ Samsung's 7/6nm production capacity has been gradually migrating to the 5/4nm process and yield rate has continued to improve, driving 2Q22 revenue to US$559 billion, a quarterly increase of 49% At the same time, the first 3GAE process using GAA architecture was officially mass-produced at the end of 2Q22 The first wave of customers includes PanSemi, a Chinese cryptocurrency mining company However, due to the complex 3nm production process, production will require two quarters Therefore, the 3nm node is not expected to contribute to revenue until the end of 2022, at the earliest UMC's new 28/22nm production capacity went online smoothly in 2Q22, driving the growth of overall wafer shipments and ASP This node's revenue share moved up to 22% this quarter while 2Q22 revenue reached US$245 billion, growing 81% QoQ, and the highest in the top ten GlobalFoundries benefited from the release of a small amount of new production capacity and long-term agreement (LTA) guarantees for most of its production capacity Revenue in 2Q22 reached US$199 billion, a quarterly increase of 27% It is worth noting, assisted by the recent US CHIPS Act, Qualcomm, a major American manufacturer, signed a new contract with GlobalFoundries to extend their LTA period to 2028 with a significant increase in agreed volume, mainly producing 5G RF transceivers and Wi-Fi7 in Malta Fab8 at the 14/12nm node, aimed at supporting the localized production of wafers in the US SMIC's 2Q22 revenue reached US$190 billion, up 33% QoQ, while its proportion of revenue in the smartphone sector fell to 254% The smart home sector maintains strong growth momentum and revenue from related application products such as Wi-Fi, Bluetooth, PMIC, and MCU peripheral IC for networking and smart control devices increased by approximately 234% QoQ Operating performance of second- and third-tier foundries peaked and utilization rate may decline in 2H22 The sixth to eighth positions are occupied by Hua Hong Group, PSMC, and VIS, respectively Except for PSMC, revenue posted by other operators was driven by factors such as increases in average selling price and production expansion, leading to marginal growth in 2Q22 revenue In terms of PSMC, foundry revenue in 2Q22 was US$656 million, down 14% QoQ Since consumer DDI and CIS were among the first wave of product orders revised by customers, this was reflected in the operating performance of each process platform while revenue from both HV and CIS processes declined PMIC increased by approximately 226% QoQ, reflecting that certain PMIC products retain stocking momentum and also demonstrating PSMC’s strategy of continuing to convert production lines to produce PMICs Nexchip studiously expanded its production capacity and technology platform process diversity, driving overall wafer shipment growth and contributing to revenue Revenue in 2Q22 was approximately US$463 million, up 45% QoQ At the same time, in addition to partnering with SmartSens to develop 90nm CIS and continuously increasing production volume, the company also partnered with MediaTek to develop 01Xµm smartphone PMIC, contributing to non-driver IC business revenue Tower has no short-term plans to significantly expand production and its revenue was mainly driven by ASP and product mix optimization Revenue in 2Q22 reached US$426 million, up 12% QoQ 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
U.S. Passes CHIPS Act, Increasing Restrictions on China Lead to Rising Geopolitical Risk, Says Trendforce

2022/08/01

Semiconductors

The disruption of the chip supply chain caused by the pandemic in the past two years, as well as geopolitical flashpoints such as Sino-US trade frictions and the Russia-Ukraine war, have led regional economies worldwide to focus more on the autonomy of local production and supply chains According to TrendForce research, in terms of 12-inch equivalent production capacity in various regions around the world, Taiwan will account for approximately 43% of capacity by 2025, followed by China at 27%, the United States at 8%, and South Korea at 12% In terms of advanced process capacity below 7nm (inclusive), Taiwan will account for approximately 69% by 2025, South Korea 18%, the United States 12%, and China 1% Compared with the landscape in 2022, it is obvious that the United States will increase its proportion of advanced process production capacity in the next three years, while China will focus on mature processes However, as the US Congress is about to enter its August recess, the Senate and House of Representatives passed "HR 4346 The CHIPS (creating helpful incentives to produce semiconductors) and Science Act of 2022" (aka CHIPS Act) promptly last week and the bill officially enters the final leg of the legislative process and will take effect after it is signed by President Biden The draft bill not only covers wafer manufacturing R&D and factory construction subsidies, tax incentives, etc, but also proposes additional restrictions It proposes that companies that receive subsidies from the United States be barred from investing in process technologies below 28nm in China during the subsidy period to ensure that the CHIPS Act protects the competitiveness of the US semiconductor industry TrendForce indicates that the only semiconductor companies currently investing in expansion/fabs in the US and China are TSMC and Samsung It is worth continuing to pay attention to how the US CHIPS Act will restrict the Chinese investment of these two companies China earnestly promoting domestic equipment but key equipment for advanced processes is controlled by US allies Since the US "Entity List" expressly prohibits the sale of US technologies used in advanced processes of 1Xnm and below to enumerated companies, most Chinese foundries have turned to actively expanding mature process technologies of 28nm and above At the same time, China is also industriously developing domestic semiconductor equipment in an attempt to achieve a fully US-independent manufacturing line However, TrendForce indicates the US-aligned equipment manufacturers still control certain key semiconductor processing machinery at this stage US-affiliated equipment is especially crucial in advanced manufacturing processes below 7nm and it is quite difficult to achieve a fully US-independent production line in the short term It is worth mentioning that SMIC began developing its N+2 (7nm) process technology for DUV exposure before being placed on the "Entity List" in 2020 R&D was conducted with the machinery purchased at that time and mining-related chips have recently been mass-produced officially However, according to TrendForce research, since chips below 7nm (inclusive) are approaching their physical limitations, if DUV technology is used in lieu of EUV technology, the chips will require more complicated production procedures, affecting yield and cost performance In addition, the structure of mining chip is relatively simple compared with other logic chips TrendForce believes that it may be quite difficult to produce more complex logic chips using this process and the mass production scale of N+2 (7nm) will be extremely limited as long as US-affiliated equipment shipments remain restricted In summation, the disruption of the chip supply chain caused by the pandemic has stimulated regional economies to focus more on the issue of semiconductor autonomy In the context of the Entity List, whose implementation predates the pandemic by several years, the United States not only actively promotes domestic production lines through the CHIPS Act but also proposes additional restrictions to intensify and deepen sanctions against China's semiconductor industry and curbing its development From the foundry perspective, TSMC and Samsung recently invested in and established factories in the United States to focus on 5nm advanced processes, while most expansion activities in China are in mature processes above 28nm (inclusive) According to TrendForce data, Chinese foundries are more active in expanding the production capacity of mature processes under the constraints of existing equipment According to TrendForce, the proportion of 12-inch equivalent production capacity in China will increase from 24% to 27% from 2022 to 2025, the highest growth rate among all regions However, only accounting for advanced processes (7nm and below), the United States will post the highest growth rate from 2022 to 2025, with its market share expected to grow to 12% by 2025 The equipment ban has become the biggest variable in Chinese production expansion The Trump administration previously requested the Netherlands halt its export of machinery to China through the Wassenaar Arrangement, making the export of equipment to China more difficult Since SMIC has successfully mass-produced 7nm process products recently, TrendForce believes that the United States may once again use the Arrangement to persuade the Netherlands to expand the scope of restrictions to DUV ArF immersion systems and deepen restrictions on China If the US is convincing, a dearth of  DUV ArF immersion systems not only affects the feasibility of China developing advanced processes below 7nm (inclusive), since ArF immersion systems are also key in 40/28nm expansion, it may also do a great disserve to the semiconductor expansion plans of China’s primary 40nm and 28nm processes 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
2022 a Focus for 12-inch Capacity Expansion, 20% Annual Growth Expected in Mature Process Capacity, Says TrendForce

2022/06/23

Semiconductors

According to TrendForce data, global wafer foundry capacity will increase by approximately 14% annually in 2022 Since expanding 8-inch capacity is not cost-effective and its growth rate is much lower than the overall industry average, 8-inch capacity will grow approximately 6% annually, while 12-inch capacity will grow 18% annually Of this new capacity, approximately 65% of new 12-inch capacity will be in mature processes (28nm and above) with an annual growth rate of 20% It is obvious that in 2022, most wafer foundries will focus on 12-inch wafer production capacity, with the main driving force behind production expansion coming from TSMC, UMC, SMIC, HuaHong Group’s HHGrace, and Nexchip As the recent expansion activities of process nodes above 28nm focus on the diversified development of specialty processes, TrendForce has analyzed the recent trends of these specialty processes based on products such as Power-related, MCU, and AMOLED driver ICs First, power semiconductors can be roughly divided into two categories: power discrete and power IC Power discrete, with power transistors such as MOSFET and IGBT as mainstream products, is affected by 5G infrastructure, consumer fast charging, automotive electronics, and electric vehicles where the consumption of power components per unit of product has increased and demand has grown rapidly The overall market has long been dominated by international IDMs, such as Infineon, On Semi, and STM Global IDMs account for approximately 80~90% of the market while fabless firms account for approximately 10~20% In terms of foundries, in addition to increasing demand from existing fabless customers, due to the relatively conservative expansion process of IDMs’ own factories in recent years, capacity shortages have been commonplace and IDMs have also successively outsourced products to foundries HHGrace's power discrete revenue scale in 2021 was the greatest in the pure-play foundry field with the steady release of new 12-inch capacity in Wuxi to perpetuate revenue performance PSMC and Vanguard have also recently increased their 8-inch capacity to undertake related orders In terms of PMIC, BCD (Bipolar-CMOS-DMOS) platform technology has mostly been adopted at this stage and mainstream manufacturing is performed at the 8-inch 018-011µm nodes Benefiting from upgraded technical specifications for 5G smartphones, data centers, and electric vehicles, demand for PMICs has spiked in recent years However, due to limited growth in 8-inch production capacity and the need to update peripheral ICs in response to the release of a new generation of SoCs, each foundry has also successively assisted clients in migrating certain PMICs to 12-inch production The plan is to migrate these PMICs to the 90/55nm nodes, focusing on applications such as smartphones and servers TSMC, UMC, PSMC, HHGrace, and SMIC, all have such plans The eNVM (embedded Non-Volatile Memory) process possesses relatively diversified technology and eFlash is currently its mainstream process In addition, eNVM process applications are mostly used in smart cards and MCUs An MCU has a wide range of uses For example, industrial/automotive and consumer electronics such as information communication products, home appliances, and IoT products requiring simple functional commands to diverse complex applications, will use MCU components In addition, embedded memory technology for MCU will also vary based on slight differences in functionality Although the demand for consumer MCUs is relatively flat due to weak market conditions, MCU stocking momentum to meet automotive and industrial equipment demand is still strong, leading to a relative shortage of MCUs in the currently market In addition, IDMs have been increasingly outsourcing orders driven by the short-term consequences of the pandemic on the supply chain and the cost factors of MCU products moving to more advanced process nodes in the medium and long term, especially as the cost of expanding processes below 40nm (inclusive) has increased significantly This, in turn, stimulates the MCU application development and deployment of wafer foundries With an earlier mass production for processes below 40nm (inclusive) and process maturity, Taiwan's foundries have also accepted orders from IDMs, while the technology utilized by SMIC and HHGrace lag by approximately one generation, though HHGrace possesses the greatest production capacity among Chinese foundries HV (High Voltage) process technology is mainly used in the production of display driver ICs At present, the mainstream includes the production of large/small size driver ICs at the 8-inch 018-011um process nodes, the production of TDDI at 12-inch 65/55nm, and the production of smartphone AMOLED driver ICs at 40/28nm Since the beginning of 2022, smartphone and consumer electronics market conditions have continued to be sluggish, balancing the supply of large-size driver ICs and TDDI However, since the overall penetration rate of AMOLED in mobile phones is still rising steadily, continued growth momentum is forecast in the medium and long term for AMOLED driver ICs Samsung, TSMC, UMC, and SMIC all have plans to develop 28nmHV The process technology of remaining players including HHGrace or Nexchip remain dominated by the 65/55nm nodes and they have yet to be able to mass produce AMOLED driver ICs Mature processes are estimated to account for nearly 75~80% of production capacity in the next three years According to TrendForce investigations, the compound annual growth rate of global foundry capacity will reach 11% from the period of 2021-2024, of which 28nm capacity in 2024 will reach 13 times that of 2022, the most active process node for mature process expansion More specialty process applications are expected to be migrated to 28nm and the global production capacity of mature processes above 28nm (inclusive) will stably maintain a 75-80% proportion of overall production capacity from 2021 to 2024, showing the market potential and importance of creating specialty mature processes At the same time, TrendForce indicates, due to the impact of the pandemic on the global supply chain and geopolitics, regional "short-chain production" and supply chain autonomy have become key considerations for foundry expansion For example, in order to ally with regional production and improve the flexibility of capacity scheduling, Taiwanese foundries have corresponding expansion plans in the United States, Japan, China, and Singapore Except for TSMC's US fab, which focuses on advanced processes, remaining expansion plans focus on specialty process technologies In addition, recent expansion activities clearly show that foundries in mainland China are actively expanding mature process technology and capacity These companies are allocating the production of key peripheral ICs such as HV, MCU, PMIC, and power discrete, in order to enhance the autonomy of their supply chains and meet the needs of the domestic automobile, consumer electronics, and information and communication industries 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/   The Webinar, ”COMPUFORUM 2022 Webinar: Diverse Market Opportunities Generated by Applications of Cyber-Physical Systems” will start from June 15, 2022 The TrendForce research team including Mark Liu, Caron Ju, Bryan Ao, and Alex Chen will present speeches regarding memory, servers, and datacenters, respectively 【Info】 When:Wednesday, June, 15 Where:COMPUFORUM 2022 Webinar (Free to access)  

Press Releases
Off-season Offsets Wafer Pricing Increase, 1Q22 Foundry Output Value Up 8.2% QoQ, Says TrendForce

2022/06/20

Semiconductors

According to TrendForce research, although demand for consumer electronics remains weak, structural growth demand in the semiconductor industry including for servers, high-performance computing, automotive, and industrial equipment has not flagged, becoming a key driver for medium and long term foundry growth At the same time, due to robust wafer production at higher pricing in 1Q22, quarterly output value hit a new high for the 11th consecutive quarter, reaching US$3196 billion, 82% QoQ, marginally less than the previous quarter In terms of ranking, the biggest change is Nexchip surpassed Tower at the ninth position Samsung hit by extreme cooling of terminal market demand, sole company among top ten players posting revenue decline TSMC's across the board wafer hikes in 4Q21 on batches primarily produced in 1Q22 coupled with sustained strong demand for high-performance computing and better foreign currency exchange rates pushed TSMC's 1Q22 revenue to $1753 billion, up 113% QoQ Quarterly revenue growth by node was generally around 10% and the 7/6nm and 16/12nm processes posted the highest growth rate due to small expansions in production The only instance of revenue decline came at the 5/4nm process due to Apple's iPhone 13 entering the off season for production stocking Demand for System LSI CIS and driver ICs has weakened as a consequence of a sluggish TV and smartphone market In addition, 4nm production expansion and yield improvement rate are not progressing as quickly as expected Number two Samsung was the only foundry posting negative growth in 1Q22, with a revenue of US$533 billion, falling 39% QoQ Samsung market share also fell to 163% UMC also benefited from wafer price hikes, and its revenue hit US$226 billion, a QoQ increase of 66%, ranking third However, UMC’s new capacity has yet to come online in 1Q22, so the proportion of revenue contributed by various processes remains roughly in line with 4Q21 GlobalFoundries, ranking fourth, reported revenue of $194 billion for the quarter, up 50% QoQ Since wafer shipments were roughly the same as in the previous quarter, growth primarily came from ASP adjustment and product mix optimization In addition, as one of the major wafer foundries in the United States, GlobalFoundries has helped produce "Made in America" chips for national security and aerospace-related applications for many years In the near term, it plans to produce 45nm SOI process products to support the operation of defense and aerospace systems The first batch of production chip deliveries are expected to begin in 2023 SMIC has benefited from a recent increase in wafer shipments due to the smooth rollout of production capacity At the same time, its product portfolio has gradually shifted to structurally short products such as consumer PMICs, AMOLED DDIs, and PMICs and MCUs for industrial equipment and automotive, driving continuous revenue growth with 1Q22 revenue reaching US$184 billion, 166% growth QoQ, ranking fifth Nexchip actively expands production squeezing out Tower, three major Chinese players account for more than 10% of the market Sixth to eighth place HuaHong Group, PSMC, and VIS, respectively, all benefited from continuous full capacity utilization, new capacity, and ASP and products mix adjustment to grow revenue performance Nexchip's 1Q22 revenue reached US$443 million, a quarterly increase of 260%, the highest growth rate among the top ten list, surpassed Tower to jump to ninth place, and narrowing the market share gap between it and eighth ranked VIS According to TrendForce, Nexchip is currently focused on the production of 01Xμm and 90nm large-sized display driver ICs In 2022, it will push production expansion, aiming to complete the capacity of its N2 factory campus At the same time, in order to reduce the potential risk of a downturn in any individual market, Nexchip has also accelerated the development of multiple product platforms such as TDDI, CIS, MCU, and PMIC At present, Nexchip has partnered with SmartSens to successfully develop 90nm CIS products which will be able to contribute non-driver IC revenue after mass production Ranked tenth, Tower benefited from a relative shortage of analog-related chips for industrial control and automotive applications Its revenue in 1Q22 grew to US$421 million, 22% growth QoQ In order to sustain its advantages in the field of PMIC process technologies, the company is also actively exploring the application of PMIC technology in the near term, developing higher voltage tolerances and effectively reduced chip size, so as to supply high-performance computing CPUs and GPUs, as well as the needs of automotive and industrial control power management Looking to the 2Q22 foundry market, TrendForce expects the output value of the top ten foundries to maintain a growth trend as the capacity of a small number of foundries grows to drive overall shipment growth in the second quarter However, considering demand for consumer end products continues to wane and contributions from higher priced wafers has been largely reflected in 1Q22, quarterly growth rate will contract once more The Webinar, ”COMPUFORUM 2022 Webinar: Diverse Market Opportunities Generated by Applications of Cyber-Physical Systems” will start from June 15, 2022 The TrendForce research team including Mark Liu, Caron Ju, Bryan Ao, and Alex Chen will present speeches regarding memory, servers, and datacenters, respectively 【Info】 When:Wednesday, June, 15 Where:COMPUFORUM 2022 Webinar (Free to access) 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@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

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