TrendForce's recent analysis of the foundry market reveals that demand continues to slide for all types of mature and advanced nodes. The major IC design houses have cut wafer input for 1Q23 and will likely scale back further for 2Q23. Currently, foundries are expected to maintain a lower-than-ideal level of capacity utilization rate in the first two quarters of this year. Some nodes could experience a steeper demand drop in 2Q23 as there are still no signs of a significant rebound in wafer orders. Looking ahead to the second half of this year, orders will likely pick up for some components that underwent an inventory correction at an earlier time. However, the state of the global economy will remain the largest variable that affect demand, and the recovery of individual foundries' capacity utilization rates will not occur as quickly as expected. Taking these factors into account, TrendForce currently forecasts that global foundry revenue will drop by around 4% YoY for 2023. The projected decline for 2023 is more severe when compared with the one that was recorded for 2019.

Global sales of total semiconductor manufacturing equipment by original equipment manufacturers are forecast to reach a new high of $108.5 billion in 2022, rising 5.9% from the previous industry record of $102.5 billion in 2021, SEMI announced today in its Year-End Total Semiconductor Equipment Forecast - OEM Perspective at SEMICON Japan 2022. The record high caps three consecutive years of record revenue. The global total semiconductor manufacturing equipment market is expected to contract to $91.2 billion next year before rebounding in 2024 driven by both the front-end and back-end segments.

"Record fab constructions have driven total semiconductor manufacturing equipment sales to cross the $100 billion mark for a second straight year," said Ajit Manocha, SEMI president and CEO. "Emerging applications in multiple markets have set expectations for significant semiconductor industry growth this decade, which will necessitate further investments to expand production capacity."

According to TrendForce's research, the total revenue of the global top 10 foundries rose by 6% QoQ to US$35.21 billion for 3Q22 as the release of the new iPhone series during the second half of the year generated significant stock-up activities across Apple's supply chain. However, the global economy shows weak performances, and factors such as China's policy on containing COVID-19 outbreaks and high inflation continue to impact consumer confidence. As a result, peak-season demand in the second half of the year has been underwhelming, and inventory consumption is proceeding slower than anticipated. This situation has led to substantial downward corrections to foundry orders as well. For 4Q22, TrendForce forecasts that the total revenue of the global top 10 foundries will register a QoQ decline, thereby terminating the boom of the past two years—when there was an uninterrupted trend of QoQ revenue growth.

Regarding individual foundries' performances in 3Q22, the group of the top five was led by TSMC, followed by Samsung, UMC, GlobalFoundries, and SMIC. Their collective global market share (in revenue terms) came to 89.6%. Most foundries were directly impacted by clients slowing down their stock-up activities or significantly correcting down their orders. Only TSMC was able to make a notable gain due to Apple's strong stock-up demand for the SoCs deployed in this year's new iPhone models. TSMC saw its revenue rise by 11.1% QoQ to US$20.16 billion, and the corresponding market share expanded to 56.1%. The growth was mainly attributed to the ≤7 nm nodes, whose share in the foundry's revenue had kept climbing and reached 54% in the third quarter. Conversely, Samsung actually experienced a slight QoQ drop of 0.1% in foundry revenue even though it had also benefited from the component demand related to the new iPhone series. Partially impacted by the weakening of the Korean won, Samsung's market share fell to 15.5%.

A major unnamed customer of TSMC has reportedly cut their order for 3 nm wafers. Foundry customers usually place orders for cutting-edge foundry nodes several quarters in advance, in exchange for priority foundry allocations, and preferential rates, while foundries use revenues from these orders to develop the capacity for manufacture these chips. The 3 nm customer could be anyone—Qualcomm, Mediatek, NVIDIA, AMD, or Intel. Order cancellations have reportedly had a domino-effect on the upstream supply-chain of TSMC, hitting suppliers of raw materials, manufacturing equipment, and other consumables. There is an industry-wide slump in demand for consumer electronics and PC hardware, which reflects in the slump in revenues and/or guidance in quarterly financial results releases by prominent companies.

Semiconductor manufacturers worldwide are forecast to expand 300 mm fab capacity at a nearly 10% compound average growth rate (CAGR) from 2022 to 2025, reaching an all-time high of 9.2 million wafers per month (wpm), SEMI announced today in its 300 mm Fab Outlook to 2025 report. Strong demand for automotive semiconductors and new government funding and incentive programs in multiple regions are driving much of the growth.

"While shortages of some chips have eased and supply of others has remained tight, the semiconductor industry is laying the groundwork to meet longer-term demand for a broad range of emerging applications as it expands 300 mm fab capacity," said Ajit Manocha, SEMI President and CEO. "SEMI is currently tracking 67 new 300 mm fabs or major additions of new lines expected to start construction from 2022 to 2025."

Samsung Electronics, a world leader in advanced semiconductor technology, announced today a strengthened business strategy for its Foundry Business with the introduction of cutting-edge technologies at its annual Samsung Foundry Forum event. With significant market growth in high-performance computing (HPC), artificial intelligence (AI), 5/6G connectivity and automotive applications, demand for advanced semiconductors has increased dramatically, making innovation in semiconductor process technology critical to the business success of foundry customers. To that end, Samsung highlighted its commitment to bringing its most advanced process technology, 1.4-nanometer (nm), for mass production in 2027.

During the event, Samsung also outlined steps its Foundry Business is taking in order to meet customers' needs, including: foundry process technology innovation, process technology optimization for each specific applications, stable production capabilities, and customized services for customers. "The technology development goal down to 1.4 nm and foundry platforms specialized for each application, together with stable supply through consistent investment are all part of Samsung's strategies to secure customers' trust and support their success," said Dr. Si-young Choi, president and head of Foundry Business at Samsung Electronics. "Realizing every customer's innovations with our partners has been at the core of our foundry service."

Last week's news about Mediatek signing an agreement to use Intel's Foundry Services (IFS) led to some speculation as to what Mediatek would be manufacturing at IFS. Details have now emerged in the Taiwan press about Mediatek's plans and the first products will be using the Intel 16 process, what was previously known as its 22 nm node. As such, we're not talking about anything cutting edge or even remotely close, but that's hardly a problem for Mediatek, as the company makes a vast range of products suitable for the node.

MediaTek CEO Rick Tsai mentioned that IFS will be used for producing semiconductors for digital TVs and wireless access networks at an investor conference in Taiwan. This suggests that most of the components might not even be for Mediatek itself, but rather its subsidiaries, such as MStar or Airoha. MStar is a company that produces a wide range of lower-end smart TV chips, whereas Airoha has ended up taking over Mediatek's networking and Bluetooth business units. Admittedly, Mediatek still has some of these types of products under its own brand, but these tend to be higher-end products that would require a more advanced node than 22 nm in most cases. Mediatek's move to IFS has raised concerns in Taiwan that the smaller foundries might be losing business from Mediatek over time, which means that UMC and PSMC are going to be on the losing end of this deal.

Intel and MediaTek today announced a strategic partnership to manufacture chips using Intel Foundry Services' (IFS) advanced process technologies. The agreement is designed to help MediaTek build a more balanced, resilient supply chain through the addition of a new foundry partner with significant capacity in the United States and Europe. MediaTek plans to use Intel process technologies to manufacture multiple chips for a range of smart edge devices. IFS offers a broad manufacturing platform with technologies optimized for high performance, low power and always-on connectivity built on a roadmap that spans production-proven three-dimensional FinFET transistors to next-generation breakthroughs.

"As one of the world's leading fabless chip designers powering more than 2 billion devices a year, MediaTek is a terrific partner for IFS as we enter our next phase of growth," said IFS President Randhir Thakur. "We have the right combination of advanced process technology and geographically diverse capacity to help MediaTek deliver the next billion connected devices across a range of applications."

The recent semiconductor shortage has put an unprecedented amount of focus on the industry. Both commercial and government entities have come to recognize the lack of advanced node semiconductor manufacturing capabilities onshore in the United States. Intel Foundry Services (IFS) entry into the commercial foundry space is poised to change all that. As part of IFS Accelerator program, Intel recently announced their new IFS Cloud Alliance program, with Microsoft Azure as one of the inaugural members.

This is the latest chapter in a partnership between Intel and Microsoft that stretches back decades all the way back to the early days of the personal computer. In the last few years, Intel and Microsoft have collaborated on advancing semiconductor design on the cloud by working together to bring out EDA centric cloud compute such as the FX series on Azure, working with EDA vendors to enhance their software to better take advantage of the elasticity of the Azure cloud, as well as collaborating on a secure cloud-based semiconductor development platform for the US Department of Defense RAMP and RAMP-C programs.

Samsung Foundry will engage Ansys' industry-leading electromagnetic (EM) simulation tools to develop ultramodern designs, including 5G/6G, on the most advanced chips, nodes, and process technologies. Ansys' simulation solutions will deliver a comprehensive EM-aware design flow with greater capacity, speed, and integration capabilities for Samsung's most advanced semiconductor technology, accelerating on-chip design cycle times to boost high-speed connectivity while helping to reduce design error and risk.

Samsung designers will leverage Ansys' EM design tools, Ansys RaptorX, Ansys VeloceRF, and Ansys Exalto, to help reduce time to market by two to three weeks on smaller designs and up to two months for complex designs. With automation capabilities that optimize calculations and modeling, coupled with larger capacity, Ansys' software will allow the Samsung team to design at faster speeds with higher fidelity.

Samsung Electronics, the world leader in semiconductor technology, today announced that it has started initial production of its 3-nanometer (nm) process node applying Gate-All-Around (GAA) transistor architecture. Multi-Bridge-Channel FET (MBCFET), Samsung's GAA technology implemented for the first time ever, defies the performance limitations of FinFET, improving power efficiency by reducing the supply voltage level, while also enhancing performance by increasing drive current capability. Samsung is starting the first application of the nanosheet transistor with semiconductor chips for high performance, low power computing application and plans to expand to mobile processors.

"Samsung has grown rapidly as we continue to demonstrate leadership in applying next-generation technologies to manufacturing, such as foundry industry's first High-K Metal Gate, FinFET, as well as EUV. We seek to continue this leadership with the world's first 3 nm process with the MBCFET," said Dr. Siyoung Choi, President and Head of Foundry Business at Samsung Electronics. "We will continue active innovation in competitive technology development and build processes that help expedite achieving maturity of technology."

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$31.96 billion, 8.2% QoQ, marginally less than the previous quarter. In terms of ranking, the biggest change is Nexchip surpassed Tower at the ninth position.

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 $17.53 billion, up 11.3% QoQ. Quarterly revenue growth by node was generally around 10% and the 7/6 nm and 16/12 nm processes posted the highest growth rate due to small expansions in production. The only instance of revenue decline came at the 5/4 nm process due to Apple's iPhone 13 entering the off season for production stocking.

The rumour mill never seems to stop churning when it comes to TSMC and now the company is said to be looking at the tiny nation of Singapore for a future fab. This time the information comes via the Wall Street Journal rather than the usual Taiwanese sources and although the publication points out that no decision has been made at this point in time, it says that TSMC is apparently in talks with the Economic Development Board of Singapore. The official statement from the TSMC on the matter is that the company "doesn't rule out any possibility but does not have any concrete plan at this time".

The potential Singapore Fab would be producing 28 to 7 nm chips, in other words, quite far from TSMC's cutting edge nodes. However, TSMC is already building a similar facility in the southern city of Kaohsiung in Taiwan that's scheduled for opening in 2024. As such, the nodes used in a future facility in Singapore might change depending on when the fab will open and it might end up producing chips on more advanced nodes as well. As these fabs take a few years to get going, they're not projects that are started on a whim. We should also mention that TSMC already has a joint venture in Singapore together with NXP, called SSMC, which also produces for third parties.

Earlier this week, news about TSMC increasing prices in 2023 made its way online and now Samsung Foundry is said to be discussing price hikes with its customers to make up for the increased costs in materials. TSMC already increased its prices by around 20 percent at the end of 2021 and now it looks like Samsung Foundry is set to follow suit with a similar price hike. Depending on the node, the company is said to be looking at increases of between 15 to 20 percent. The somewhat peculiar thing in the case of Samsung Foundry, is that the company is looking at asking for more money on older, legacy nodes, than it will for its cutting edge nodes.

The price increases are said to come into effect sometime in the second half of 2022, so more than six months after TSMC's price hike. The company is still in negotiation with some of its customers, while others have already come to an agreement with Samsung Foundries. The costs to produce chips are said to be increasing by 20 to 30 percent across the board, no matter if we're talking materials needed to produce integrated circuits, or building new factories, according to Bloomberg. Samsung Foundries have also managed to secure long-term orders for the next five years, with a combined value of around eight times that of previous year's revenue, according to its EVP, Kang Moon-soo. The company is hoping to overtake TSMC in the future and invested more than US$36 billion in 2021 alone to expand its foundry business with new fabs and EUV machines. The good news is that Samsung Foundry claims to be back on track when it comes to yield on its 4 nm node and mass production of its 3 nm node is said to start this quarter.

According to TrendForce, Taiwan is crucial to the global semiconductor supply chain, accounting for a 26% market share of semiconductor revenue in 2021, ranking second in the world. Its IC design and packaging & testing industries also account for a 27% and 20% global market share, ranking second and first in the world, respectively. Firmly in the pole position, Taiwan accounts for 64% of the foundry market. In addition to TSMC possessing the most advanced process technology at this stage, foundries including UMC, Vanguard, and PSMC also have their own process advantages. Under the looming shadow of chip shortages caused by the pandemic and geopolitical turmoil in the past two years, various governments have quickly awakened to the fact that localization of chip manufacturing is necessary to avoid being cut off from chip acquisition due to logistics difficulties or cross-border shipment bans. Taiwanese companies have ridden this wave to become partners that governments around the world are eager to invite to set up factories in various locales.

Yesterday, NVIDIA announced its next-generation Hopper architecture designed for data center applications and workloads. There is always a question of availability, as the previous period showed everyone that the supply chain is overbooked and semiconductors are in very high demand. During the Q&A press session today, NVIDIA's CEO, Jensen Huang, tried to answer as many questions as possible. However, an exciting topic arose regarding the potential collaboration with Intel. As a part of Intel's IDM 2.0 strategy, the company plans to offer its chip manufacturing capabilities to the third-party companies willing to make efforts and port their designs to Intel's semiconductor nodes. NVIDIA, one of the largest TSMC customers, could be a new Intel customer. Below, we compiled a few quotes that highlight Jensen Huang's opinions, taking the quotes from Tom's Hardware.

NVIDIA CEO Jensen HuangOur strategy is to expand our supply base with diversity and redundancy at every single layer. At the chip layer, at the substrate layer, the system layer, at every single layer. We've diversified the number of nodes, we've diversified the number of foundries, and Intel is an excellent partner of ours[…]. They're interested in us using their foundries, and we're very interested in exploring it. [...] I am encouraged by the work that is done at Intel, I think this is a direction they have to go, and we're interested in looking at their process technology. Our relationship with Intel is quite long; we work with them across a whole lot of different areas, every single PC, every single laptop, every single PC, supercomputer, we collaborate. [...] We have been working closely with Intel, sharing with them our roadmap long before we share it with the public, for years. Intel has known our secrets for years. AMD has known our secrets for years. We are sophisticated and mature enough to realize that we have to collaborate.[...] We share roadmaps, of course, under confidentiality and a very selective channel of communications. The industry has just learned how to work in that way.

While there's a lot of talk about cutting edge nodes, Samsung Foundries are looking at alternative options to find new business and are said to be eyeing legacy nodes for future expansions. At the same time, Samsung is looking at setting up its own chip testing and packaging factory, to be able to better serve customers who are looking for a full-service partner. It's not clear which legacy nodes Samsung are eyeing, but the story by Business Korea states that at least some of it will focus on CMOS imaging sensors, since there is apparently a shortage of those too.

Samsung is said to have plans for no less than 300 new customers by 2026 for its foundry business, across all nodes. However, this doesn't mean Samsung will stop developing new, cutting edge nodes, as Samsung is still planning to kick off volume production on its 3 nm node in the first half of this year, with 2 nm said to start volume production in 2025. After its dealings with Nvidia and Qualcomm that haven't been what you'd call successful, the question is who will be willing to partner with Samsung Foundry on its cutting edge nodes in the future.

Based on details posted by the Commercial Times in Taiwan, it would appear that Samsung Foundry is working on ways to win over customers from TSMC. The backstory is that fabless chip makers have had to change foundries over time, due to the fact that from a foundry side, it's expensive to be on the cutting edge and many foundries have stepped out of the race. This has left the fabless chip makers with fewer options and with TSMC as the de facto industry leader today. That said, as we've seen, NVIDIA and Qualcomm picked Samsung Foundry for some of their latest chips, but based on industry rumours, the yields aren't great.

Samsung Foundry has been trying to win over customers by offering attractive pricing compared to TSMC, but far from everyone has been interested. Some companies, like Apple, have tried to work with Samsung, but abandoned them in the end in favour of TSMC. Samsung is said to be courting both AMD and NVIDIA, as well as others, although only time will tell if we'll see any future product from either company being manufactured by Samsung Foundry. The fact that there are investigations into the yields at Samsung Foundry should be a concern for any future customer and isn't a good sign of where the company is heading.

Although nothing has been officially confirmed by Qualcomm, it looks like the company will be moving away from Samsung for its 3 nm based chips, in favour of TSMC. The Elec also mentions that Qualcomm has moved some of its Snapdragon 8 Gen 1 production to TSMC, something that has already been hitting the rumour mill. The first batch of 4 nm Snapdragon 8 Gen 1 chips are said to already have entered the early stages of production. The main reason for the move is said to be poor yields by Samsung Foundry on its 4 nm node.

The yield rates are said to be a measly 35 percent for the Snapdragon 8 Gen 1, with Samsung's Exynos 2200 having even lower yields. This also helps explain why Samsung's mobile division has decided to limit the availability of its Exynos 2200 based phones to only a few regions. Apparently Qualcomm had to send staff over to Korea to help get the yields up to their current rate, but it's not hard to see why the company is shifting back to TSMC, as a 35 percent yield rate is simply not acceptable. Samsung is said to be auditing Samsung Foundry to find out what has gone wrong, as anything below 80-90 percent in terms of yield rate is simply not acceptable for mass production. Qualcomm will apparently continue to use Samsung Foundry for its 7 nm RF chips, where the yields must be within industry norms.

At Intel's 2022 Investor Meeting, Chief Executive Officer Pat Gelsinger and Intel's business leaders outlined key elements of the company's strategy and path for long-term growth. Intel's long-term plans will capitalize on transformative growth during an era of unprecedented demand for semiconductors. Among the presentations, Intel announced product roadmaps across its major business units and key execution milestones, including: Accelerated Computing Systems and Graphics, Intel Foundry Services, Software and Advanced Technology, Network and Edge, Technology Development, More: For more from Intel's Investor Meeting 2022, including the presentations and news, please visit the Intel Newsroom and Intel.com's Investor Meeting site.

Samsung Electronics, a world leader in advanced semiconductor technology, today announced that it has developed Hybrid-Substrate Cube (H-Cube) technology, its latest 2.5D packaging solution specialized for semiconductors for HPC, AI, data center, and network products that require high-performance and large-area packaging technology.

"H-Cube solution, which is jointly developed with Samsung Electro-mechanics (SEMCO) and Amkor Technology, is suited to high-performance semiconductors that need to integrate a large number of silicon dies," said Moonsoo Kang, senior vice president and Head of Foundry Market Strategy Team at Samsung Electronics. "By expanding and enriching the foundry ecosystem, we will provide various package solutions to find a breakthrough in the challenges our customers are facing."

While the global electronics supply chain experienced a chip shortage, the corresponding shortage of foundry capacities also led various foundries to raise their quotes, resulting in an over 20% YoY increase in the total annual revenues of the top 10 foundries for both 2020 and 2021, according to TrendForce's latest investigations. The top 10 foundries' annual revenue for 2021 is now expected to surpass US$100 billion. As TSMC leads yet another round of price hikes across the industry, annual foundry revenue for 2022 will likely reach US$117.69 billion, a 13.3% YoY increase.

TrendForce indicates that the combined CAPEX of the top 10 foundries surpassed US$50 billion in 2021, a 43% YoY increase. As new fab constructions and equipment move-ins gradually conclude next year, their combined CAPEX for 2022 is expected to undergo a 15% YoY increase and fall within the US$50-60 billion range. In addition, now that TSMC has officially announced the establishment of a new fab in Japan, total foundry CAPEX will likely increase further next year. TrendForce expects the foundry industry's total 8-inch and 12-inch wafer capacities to increase by 6% YoY and 14% YoY next year, respectively.

Samsung Electronics, a world leader in advanced semiconductor technology, today unveiled plans for continuous process technology migration to 3- and 2-nanometer (nm) based on the company's Gate-All-Around (GAA) transistor structure at its 5th annual Samsung Foundry Forum (SFF) 2021. With a theme of "Adding One More Dimension," the multi-day virtual event is expected to draw over 2,000 global customers and partners. At this year's event, Samsung will share its vision to bolster its leadership in the rapidly evolving foundry market by taking each respective part of foundry business to the next level: process technology, manufacturing operations, and foundry services.

"We will increase our overall production capacity and lead the most advanced technologies while taking silicon scaling a step further and continuing technological innovation by application," said Dr. Siyoung Choi, President and Head of Foundry Business at Samsung Electronics. "Amid further digitalization prompted by the COVID-19 pandemic, our customers and partners will discover the limitless potential of silicon implementation for delivering the right technology at the right time."

Samsung is by far Samsung's largest foundry customers and this is no secret, but now it seems like the company wants to gain more customers to help pay for the costs of operating a cutting edge foundry. A little over a decade ago, Samsung was part of the Common Platform technology alliance together with GlobalFoundries and IBM, which allowed companies to almost pick either foundry based on a common design kit and common process technologies. It made Samsung an attractive foundry option, but the alliance didn't last.

As we know, Nvidia gave Samsung a try with Ampere and there were a lot of reports of yield issues and what not early on. This seems to have persuaded Nvidia to move back to TSMC for Lovelace and Hopper, which is a big loss for Samsung. However, it seems this was also something of a wakeup call for Samsung, as the company is apparently looking at making some internal changes to its customer structure so it can handle third party customers in a better way.

The panic buying of chips persisted in 2Q21 owing to factors such as post-pandemic demand, industry-wide shift to 5G telecom technology, geopolitical tensions, and chronic chip shortages, according to TrendForce's latest investigations. Chip demand from ODMs/OEMs remained high, as they were unable to meet shipment targets for various end-products due to the shortage of foundry capacities. In addition, wafers inputted in 1Q21 underwent a price hike and were subsequently outputted in 2Q21. Foundry revenue for the quarter reached US$24.407 billion, representing a 6.2% QoQ increase and yet another record high for the eighth consecutive quarter since 3Q19.