Will the market expand enough to absorb new capacity?

[Arthur Hanson]

Will AI/ML and the automation of everything expand enough to absorb the new capacity coming online as every country wants and supports more fab construction? Will skilled labor be the choke point? Where will ASML figure in these coming changes? Are there any totally new technologies on the horizon? Any thoughts on who the winners and losers will be? What about second tier producers, will the market for trailing edge expand also? What will the semi industry look like in five years? Any thoughts, observations or comments appreciated, Thanks

 

[Daniel Nenni]

-If we spent all of the CAPEX that was announced last year we would have a wafer glut. Clearly CAPEX is being reconsidered this year. We all hoped 2H 2023 would be the rebound but that is looking unlikely. My guess is that we are 3-5 years ahead on fab builds so things will slow down for sure.

-Skilled labor will also slow things down but that can be fixed in 3-5 years as well. The Design Automation Conference and SEMICON West was packed with students last week so we should be okay. Having semiconductors constantly in the news for the past 3 years has helped and all of the CHIPs Acts around the world.

-We will publish an update on ASML from SEMICON West on Friday morning.

- No totally new technologies that I have seen. Mostly incremental stuff. We just bought a portable fan for the house and WiFi was an option, stuff like that. Automotive has been interesting but I'm not sure what is next after the Tesla disruption. AI could be a big swing but I think it is still early. 3-5 years from now it should get interesting/frightening.

-Mature node utilization is dropping as well. Let's wait for the UMC and GF Q2 reports. My guess is that we will see downward guidance's for 2023 from the foundries including TSMC.

-Five years from now it will be boom times yet again. Semiconductors are now critical to modern life and that will only continue to be the case.