At the moment there are many encouraging signs based on the latest data. Let’s hope this trend continues into 2002 and 2020 is the year of recovery of the semiconductor market. However much depends on how the US China trade war pans out. Last week Trump blew hot and cold saying everything from the negotiations were going very well to saying that he thought there may not be an agreement until after the US presidential election next year. The next round of additional US tariffs are due to go in place on December 15th, so hopefully there will be enough progress to delay the imposition of these.
According to IHS Markit, global semiconductor sales dropped 14.2% in the first 3 quarters of 2019 compared to 2018, but there are signs of recovery even in the memory segment which has dragged down the sector so far. Intel retained it’s number 1 position with 16.3% revenue growth in Q3. For the full year IHS Markit estimate sales will recover slightly and only drop 12.4% compared to 2018.
For 2020, they estimate that NAND flash will grow 19%. Strong growth in NAND flash and DRAM is forecast as momentum increases for 5G connectivity, artificial intelligence, deep learning, and virtual reality in mobile, data center and cloud-computer servers, automotive, and industrial markets in 2020.
SEMI reported that October global semiconductor sales rebounded in October with a 2.9% month on month increase with global sales of US$35.6billion, but this was still down 13.1% yoy.
Meanwhile the World Semiconductor Trade Statistics (WSTS) organization projects annual global sales will decrease 12.8 percent in 2019, before the market starts to recover with increases of 5.9 percent in 2020 and 6.3 percent in 2021.
SEMI also published it’s 3rd quarter global semiconductor equipment manufacturers billings data showing a 12% growth over Q2, but still down 6% compared to Q3 2018. Taiwan regained the worlds largest semiconductor market status by growing 21% from Q2, and up 34% from a year ago, buying $3.9billion of equipment. Taiwan was ranked third in semiconductor equipment purchases throughout 2018, behind South Korea and China before taking top slot in Q1, and 2nd in Q2 to China. TSMC capex spending accounted for $3.21billion of the total as it invested to support 7nm, 5nm and 3nm technologies.
In addition TSMC announced it plans to spend US$14~15billion on capital expenditure next year, more than half of this expenditure is going to be spent on expanding its 5nm technology to support 5G technology growth. TSMC see a much stronger than expected demand for 5nm & 7nm due to the rapid deployment of 5G around the world. TSMC also confirmed it is on schedule to start mass production of 3nm in 2022.
Taiwanese foundry UMC has announced that it has released 22nm technology for production.
Taiwan’s manufacturing index hit a 15 month high last month due to strong demand from the electronics sector driven by 5G applications. The PMI increased from 52.7 in October to 54.9 in November with the sub index of new business orders climbed from 52.7 to 61.
In South Korea the outook is not so rosy with export orders of semiconductors decreasing 31% to US$7.4billion in November, the 12th straight month of decline. However market analysts are hopefully of a recovery soon as the Chinese PMI rebounded to 51.8 in November.
Huawei CEO Ren Zhengfei has said it plans to shift it’s US based research centre to Canada. He also said he wants to build some new factory capacity in Europe to build 5G networking equipment.
According to Bloomberg, Chinese semiconductor companies are stockpiling US semiconductor chips in case the trade war worsens and US cuts off access to US technology. In past 3 years Chinese purchases of IC’s has risen strongly, and in the last 2 months imports have been the highest since the start of 2017.
Elsewhere in China Xiaomi and Oppo both announced that they will use Qualcomms latest 5G Snapdragon 865 chip for the flagship smartphones to be released in Q1 next year.
According to the EETimes, ChangXin Memory is emerging as Chinas leading DRAM manufacturer, and is currently running 20,000 wafers per month at its Fab in Hefei. It is currently using 19nm technology to produce LPDDR4, DDR4 8Gbit DRAM products. It has plans to double it’s production in Q2 2020.
In company news, AMS has announced it has succeeded in it’s 2nd bid for Osram having managed to acquire above the required 55% of shares for it’s €41/share bid for the company which values the company at €4.5billion.
Also STMicrolectronics has announced it has acquired the remaining 45% of Swedish silicon carbide wafer manufacturer Norstel AB. Norstel develops and manufactures 150mm silicon carbide (SiC) bare and epitaxial wafers.
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