The Tech Week that was January 13-17 2020

In a week where the “phase 1” trade deal between US and China was finally signed, here is all the key news from the semiconductor and technology sector around the world.

After 2 years of an ever increasing trade war, the US and China have signed the so called Phase 1 deal aimed at reducing trade frictions.

Just as important as what is in the phase 1 deal are the items that are left out and are the major items to negotiated for the next phase. This BBC article reviews the major items missing which include the issue of China subsidies to companies in of support it’s “Made in China 2025” policy. Also excluded is the ban on Huawei and further reductions in tariffs that still remain. Let’s hope that progress is made on these more difficult items soon.

According to Gartner, last year Intel regained the number 1 slot for semiconductor companies based on global revenue in 2019 as Samsung dropped to number 2 due to the decline in memory prices and sales in 2019. Overall Global semiconductor revenue dropped 11.9% in 2019 compared to a year ago according to Gartner.

2020 is starting off with a brighter forecast for the year. Semiconductor analyst company Future Horizons is predicting that the global semiconductor market will increase to US$451billion in 2020, this is a 10.2% increase compared to 2019.

This optimism is backed up by initial trade data from Korea, where Korean semiconductor exports rose 12% in the first 10 days of 2020 in a sign that the industry is recovering from the negative effects of the trade war. This is the first time the figures have shown growth since October 2018.

TSMC expects to post revenues of between US$10.2 billion and US$10.3 billion in the first quarter of 2020, representing a 1.4% sequential decrease, but up a massive 44% on a year ago. TSMC also set its capex target this year at between US$15 ~16 billion, up from the US$14.9 billion allocated in 2019 with the majority of capex to be spent on advanced process nodes including 7nm, 5nm and 3nm.  TSMC’s Q4 revenue increased to US$10.4bn, up 10.6% sequentially of which 7nm chip shipments accounted for 35% of its total wafer revenues, up from 27% in the prior quarter. Advanced technologies, defined as 16nm and below, accounted for 56% of TSMC’s total wafer sales. In Q4 2019 smartphone revenues accounted for 53% of TSMC’s total wafer revenues, followed by the HPC segment with 29%, IoT with 8%, automotive 4% and digital consumer electronics 3%. In terms of markets, North America remained TSMC’s largest market with a 59% revenue share in Q4 whilst China accounted for 22%. This is up 9% compared to the same period in 2018. With business booming, according to Digitimes, TSMC 7nm process lead time remains at about six months, with tight supply expected to last through 2020

Also according to Digitimes, ASE is rumoured to be supplying to Apple antennas needed for mmWave 5G iPhones and iPad.

Elsewhere AMS has said it is confident it will get shareholder backing for it’s rights issue at it’s EGM on 24th January. The rights issue to raise US$1.84billion will help to partially refinance the US$4.42billion loan AMS took to acquire it’s 59.9% share of Osram.

With the expected recovery of the automotive market and it’s strong demand for SiC products, STMicroelectronics has signed a US$120million multi year supply deal for 150mm Silicon Carbide (SiC) wafers from SiCrystal AG which is part of the ROHM group. The deal adds extra SiC wafer capacity on top of existing deals STM has signed last year with other suppliers like Cree where it signed a multiyear US$250million supply deal and Norstel AB where it has acquired a majority stake in the company.

As a follow to a story last week, where the US put pressure on the Netherlands and ASML to not ship the latest EUV tool to China, the Chinese ambassador is quoted as saying that trade relations between China and the Netherlands would be damaged if ASML is prevented from selling the latest tools to China.