Global fab equipment spending for front-end facilities is expected to decrease 22% year-over-year (YoY) to US$76 billion in 2023 from a record high of US$98 billion in 2022 before rising 21% YoY to US$92 billion in 2024 to reclaim lost ground, SEMI announced today in its latest quarterly World Fab Forecast report. The 2023 decline will stem from weakening chip demand and higher inventory of consumer and mobile devices.

Next year's fab equipment spending recovery will be driven in part by the end of the semiconductor inventory correction in 2023 and strengthening demand for semiconductors in the high-performance computing (HPC) and automotive segments. "This quarter's SEMI World Fab Forecast update offers our first look ahead to 2024, highlighting the steady global expansion of fab capacity to support future semiconductor industry growth driven by the automotive and computing segments and a host of emerging applications," said Ajit Manocha, SEMI president and CEO. "The report points to a healthy 21% uptick in equipment investment next year."

TrendForce's latest investigations reveal that the global NAND Flash market has been facing a demand headwind since 2H22. In response, the supply chain has been scrambling to clear out inventory, driving down NAND Flash contract prices by 20-25%. Enterprise SSD took the brunt of the fall with prices plummeting 23-28%. Despite manufacturers lowering prices in an attempt to drive up demand, clients are hesitant to purchase more components for fear of overstock. As a result, NAND Flash bit shipments rose by a mere 5.3% as ASP fell 22.8%. Global NAND Flash revenue was reported to be US$10.29 billion in 4Q22—down 25% QoQ.

TrendForce reports that Kioxia and Micron saw both a reduction in production and price in 4Q22. Kioxia's revenue plunged 30.5% due to weak demand from PC and smartphone clients and data centers readjusting their inventory. Micron generated a quarterly revenue of US$1.1 billion—a staggering 34.7% QoQ drop—that has led them to drastically decrease their capacity utilization rate for fabs. Luckily, Micron was able to ship their 232-layer client SSDs in 4Q22 as scheduled, and with the 176-layer QLC enterprise SSD hot on its heels, Micron's bit shipments are predicted to steadily improve in 2023 with their revenue climbing gradually quarter by quarter.

According to TrendForce's latest survey of the global foundry market, electronics brands began adjusting their inventories in 2Q22, but foundries were unable to rapidly adapt to this development because they reside in the more upper portion of the supply chain. Moreover, revising procurement quantities of long-term foundry contracts takes time as well. Hence, only some tier-2 and -3 foundries were able to immediately respond to the changes in their clients' demand. Also, among them, 8-inch wafer foundries made a more pronounced reduction in their capacity utilization rates. As for the remaining foundries, the downward corrections that they made to their capacity utilization rates did not become noticeable until 4Q22. Hence, in 4Q22, the quarterly total revenue of the global top 10 foundries registered a QoQ decline for the first time after 13 consecutive quarters of positive growth. The quarterly total revenue of the top 10 foundries came to US$33,530 million, reflecting a drop of 4.7% from 3Q22. Moving into 1Q23, TrendForce projects that the quarterly total revenue of the top 10 will show an even steeper drop on account of seasonality and the uncertain macroeconomic situation.

According to TrendForce's latest survey of the server market, many cloud service providers (CSPs) have begun large-scale investments in the kinds of equipment that support artificial intelligence (AI) technologies. This development is in response to the emergence of new applications such as self-driving cars, artificial intelligence of things (AIoT), and edge computing since 2018. TrendForce estimates that in 2022, AI servers that are equipped with general-purpose GPUs (GPGPUs) accounted for almost 1% of annual global server shipments. Moving into 2023, shipments of AI servers are projected to grow by 8% YoY thanks to ChatBot and similar applications generating demand across AI-related fields. Furthermore, shipments of AI servers are forecasted to increase at a CAGR of 10.8% from 2022 to 2026.

Once upon a time, the data center market represented a duopoly of x86-64 makers AMD and Intel. However, in recent years companies started developing custom Arm-based processors to handle workloads as complex within smaller power envelopes and doing it more efficiently. According to Counterpoint Research firm, we have the latest data highlighting a significant new player called Ampere Computing in the data center world. With the latest data center revenue share report, we get to see Intel/AMD x86-64 and AWS/Ampere Arm CPU revenue. For the first time, we see that a 3rd party company, Ampere Computing, managed to capture as much as 1.54% market revenue share of the entire data center market in 2022. Thanks to having CPUs in off-the-shelf servers from OEMs, enterprises and cloud providers are able to easily integrate Ampere Altra processors.

Intel, still the most significant player, saw a 70.77% share of the overall revenue; however, that comes as a drop from 2021 data which stated an 80.71% revenue share in the data center market. This represents a 16% year-over-year decline. This reduction is not due to the low demand for server processors, as the global data center CPU market's revenue registered only a 4.4% YoY decline in 2022, but due to the high demand for AMD EPYC solutions, where team red managed to grab 19.84% of the revenue from 2022. This is a 62% YoY growth from last year's 11.74% revenue share. Slowly but surely, AMD is eating Intel's lunch. Another revenue source comes from Amazon Web Services (AWS), which the company filled with its Graviton CPU offerings based on Arm ISA. AWS Graviton CPUs accounted for 3.16% of the market revenue, up 74% from 1.82% in 2021.

The four major North American cloud service providers (CSPs) have made cuts to their server procurement quantities for this year because of economic headwinds and high inflation. Turning to server OEMs such as Dell and HPE, they are observed to have scaled back the production of server motherboards at their ODM partners. Given these developments, TrendForce now projects that global server shipments will grow by just 1.31% YoY to 14.43 million units for 2023. This latest figure is a downward correction from the earlier estimation. The revisions that server OEMs have made to their outlooks on shipments shows that the demand for end products has become much weaker than expected. They also highlight factors such as buyers of enterprise servers imposing a stricter control of their budgets and server OEMs' inventory corrections.

Jon Peddie Research reports that the growth of the global PC-based graphics processor unit (GPU) market reached 64.2 million units in Q4'22 and PC CPU shipments decreased by -35% year over year. Overall, GPUs will have a compound annual growth rate of 0.19% during 2022-2026 and reach an installed base of 3,013 million units at the end of the forecast period. Over the next five years, the penetration of discrete GPUs (dGPUs) in PCs will grow to reach a level of 32%.

Year to year, total GPU shipments, which include all platforms and all types of GPUs, decreased by -38%, desktop graphics decreased by -24%, and notebooks decreased by -43%—the largest decrease since its peak in 2011. AMD's overall market share percentage from last quarter increased 0.4%, Intel's market share decreased by -1.1%, and Nvidia's market share increased 0.68%, as indicated in the following chart.

AMD and Arm have been gaining up on Intel in the server CPU market in the past few years, and the margins of the share that AMD had won over were especially large in 2022 as datacenter operators and server brands began finding that solutions from the number-2 maker growing superior to those of the long-time leader, according to Frank Kung, DIGITIMES Research analyst focusing primarily on the server industry, who anticipates that AMD's share will well stand above 20% in 2023, while Arm will get 8%.

Prices are one of the three major drivers that resulted in datacenter operators and server brands switching to AMD. Comparing server CPUs from AMD and Intel with similar numbers of cores, clockspeed, and hardware specifications, the price tags of most of the former's products are at least 30% cheaper than the latter's, and the differences could go as high as over 40%, Kung said.

Mindfactory.de is hardly the largest tech retailer out there, but it's renowned for putting out its sales figures in public that provide sharp market insights. The latest of these concerns graphics card average selling price (ASP). The store notes that graphics card ASPs have doubled in a span of just 3 years, which marks an unnatural deviation from inflation, and cannot adequately be explained by rising chip costs due to Moore's Law either buckling or losing relevance. While Intel is a firm believer in Moore's Law, and to a smaller extent so is AMD (which disaggregated its CPUs and GPUs to continue shipping cutting-edge products at lower costs); NVIDIA considers Moore's Law dead, and thinks it needs to keep bigger and bigger GPUs to offer generational performance uplifts.

The store notes that as on February 2020, the AMD Radeon graphics card ASP stood at 295.25€, with the store having made 442,870€ in sales. For NVIDIA GeForce graphics cards, the ASP figure stood at 426.59€, and total sales at 855,305€. As of Feb 2020, AMD lacked high-end products (this was before the RDNA2 comeback), and so the NVIDIA ASP is higher. Fast forward to February 2023, and we see a doubling in the ASPs. For AMD Radeon graphics cards, this stands at 600.03€, with €1.02 million in sales; and for NVIDIA GeForce, the ASP is at 825.20€, with €1.84 million in sales.

It appears things are tougher at Micron than expected, as according to Boise State Public Radio, the company is looking at cutting an additional five percent of its workforce. Back in December, Micron announced it was planning to lay off around 10 percent of its global workforce, which at the time sat at around 49,000 employees, but it appears that cut wasn't enough, as company spokesman Tate Tran has confirmed the total headcount reduction is expected to around 15 percent, although that is for the entire year of 2023. This suggests that there might be several stages of layoffs, unless things improve and demand for Micron's products pick up.

The company is also lowering its capex, not just for 2023, but also for 2024, although the company is expecting more on building new fabs. Micron has already reduced its wafer starts, for both DRAM and NAND flash by around 20 percent. This is all taking place while the company is slowing down its tech node transitions and as such, its 1-gamma note will be moved to 2025. This means that Micron will be stuck at 232-layer 3D TLC NAND for longer than initially planned, which could lead to Micron losing market to its competitors, specifically SK Hynix and Samsung in this case, while allowing other competitors to catch up. Micron will reports is financial Q2 '23 results at the end of March, with previous quarters results indicating that Micron is expecting a drop in revenue of up to US$300 million compared to the previous quarter.

GlobalFoundries Inc. (GF) (Nasdaq: GFS) today announced preliminary financial results for the fourth quarter and fiscal year ended December 31, 2022.

Key Fourth Quarter Financial Highlights
Revenue of $2,101 million, up 14% year-over-year.
Gross margin of 29.6% and adjusted gross margin of 30.1%.
Net income of $668 million.
Adjusted EBITDA of $821 million.
Cash, cash equivalents and marketable securities of $3,346 million.

The global PC market has been experiencing a demand downtrend after the cooling down of COVID-19 in 2022. The market saw its shipments decline 15% YoY in 2022 and is expected to see another high single-digit decline in 2023, according to Counterpoint Research's data. However, among all the PC sub-sectors, Arm-based laptops are expected to show a comparatively resilient demand throughout the coming quarters thanks to Apple's success with the MacBook series, increasing ecosystem support and vanishing performance gap with x86 offerings.

The Semiconductor Industry Association (SIA) today announced global semiconductor industry sales totaled $573.5 billion in 2022, the highest-ever annual total and an increase of 3.2% compared to the 2021 total of $555.9 billion. Sales slowed during the second half of the year, however. Fourth-quarter sales of $130.2 billion were 14.7% less than the total from the fourth quarter of 2021 and 7.7% lower than the total from third quarter of 2022. And global sales for the month of December 2022 were $43.4 billion, a decrease of 4.4% compared to November 2022 total. Monthly sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. SIA represents 99% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.

"The global semiconductor market experienced significant ups and downs in 2022, with record-high sales early in the year followed by a cyclical downturn taking hold later in the year," said John Neuffer, SIA president and CEO. "Despite short-term fluctuations in sales due to market cyclicality and macroeconomic conditions, the long-term outlook for the semiconductor market remains incredibly strong, due to the ever-increasing role of chips in making the world smarter, more efficient, and better connected."

Samsung Electronics today reported financial results for the fourth quarter and the fiscal year 2022. The Company posted KRW 70.46 trillion in consolidated revenue and KRW 4.31 trillion in operating profit in the quarter ended December 31, 2022. For the full year, it reported 302.23 trillion in annual revenue, a record high and KRW 43.38 trillion in operating profit.

The business environment deteriorated significantly in the fourth quarter due to weak demand amid a global economic slowdown. Earnings at the Memory Business decreased sharply as prices fell and customers continued to adjust inventory. The System LSI Business also saw a decline in earnings as sales of key products were weighed down by inventory adjustments in the industry. The Foundry Business posted a new record for quarterly revenue while profit increased year-on-year on the back of advanced node capacity expansion as well as customer base and application area diversification.

Yesterday, Intel reported that the company experienced one of the most challenging quarters and year overall revenue results, which led the company's share price to plummet and erase almost 10 billion dollars from its market cap. Amid the economic downtrend, the company is preparing to axe unnecessary developments and research costs that it would get in low-margin markets. Today, this has been reflected in the company's network switch business and the RISC-V pathfinder program. In 2019, the company acquired Barefoot Networks, which ended up in a line of Tofino series of standalone network switches. Apparently, this has been a low-margin or unprofitable business for Intel. "NEX continues to do well and is a core part of our strategic transformation, but we will end future investments in our network switching product line, while still fully supporting existing products and customers," noted Intel CEO Pat Gelsinger, adding, "Since my return, we have exited seven businesses, providing in excess of $1.5 billion in savings". Intel NICs are not affected, and the company's investments in other networking businesses continue.

Additionally, the company is also doing a shutdown of its RISC-V Pathfinder program. Thanks to Yusuke Ohara, who questioned Intel's Pathfinder for RISC-V program support, we have information that the company is discontinuing the program "effective immediately." The support also advises that Intel will not provide additional advancements or bug fixes, so everyone should consult 3rd parties for any software and development.

TrendForce's latest analysis of the DRAM market finds that the inventory pressure on suppliers remain significant due to the persistently weak demand for consumer electronics. Among the top three DRAM suppliers, only Samsung has seen a slight drop in inventory level thanks to its highly competitive pricing strategy. To prevent DRAM prices as a whole from making another sharp dive, a few suppliers such as Micron have been cutting production. Therefore, the QoQ decline in DRAM prices are projected to shrink to around 13~18% for 1Q23. However, the slump will have yet to reach the bottom at that time. Regarding the QoQ changes in the prices of the major categories of DRAM products for 1Q23, PC DRAM and server DRAM are projected to again register a drop that is near 20%. Conversely, mobile DRAM will experience the smallest price decline because its profit margin is ready the thinnest.

GIGABYTE Technology, an industry leader in high-performance servers and workstations, today announced its enterprise solutions division has officially been spun off from GIGABYTE and acts as an independent, wholly-owned GIGABYTE subsidiary. The new standalone company, Giga Computing Technology, will leverage the GIGABYTE brand to drive server business growth and innovation. The GIGABYTE board of directors reached the decision, both the parent company and its new subsidiary agreed that the transaction would create long-term value for GIGABYTE customers that rely on enterprise solutions, as well as the consumer market.

In return for the split, GIGABYTE will receive 83,360,000 common shares of Giga Computing at NTD $10 per share, and this was determined by the estimated value of the subsidiary at NTD $833,600,000. This subsidiary creation is simply a group reorganization and will not have an impact on the daily and financial operations of the parent company. GIGABYTE and Giga Computing have an agreement in place to maintain the same development and support for all GIGABYTE enterprise products and solutions for customers. These systems and products sold by Giga Computing will, for the time being, continue to use the familiar GIGABYTE brand that is known and respected in the tech sector. At the same time, GIGABYTE will continue to drive its own growth in its consumer divisions for motherboards, GPUs, laptops, desktops, monitors, PC peripherals, and PC components.

Shipments of monitor panels have fallen over the quarters this year due to various factors that have caused disruptions across the global economy and politics. TrendForce projects that shipments of monitor panels will total just around 158 million pieces for 2022, showing a YoY decline of 8.8%.

According to TrendForce's research on the market for display panels, monitor panels experienced a large downward shipment correction later than did TV and NB panels. For TV panels, the correction phase began in 3Q21. Turning to NB panels, a steep decline in shipments occurred in 2Q22. As for monitor panels, their shipments had not fallen significantly until 3Q22. With the correction taking place at a later time, the eventual rebound will also occur at a more distant time in the future. Since monitor brands are still holding an excessively high level of panel inventory at this moment, shipments of monitor panels are forecasted to drop again by 5.3% QoQ for 1Q23.

Global market intelligence firm TrendForce reports that the revenue generation momentum of the global IC design industry slowed down in 3Q22. The main factors behind this development were the Russia-Ukraine military conflict, the recent COVID-19 lockdowns in China, the ongoing inflation, and clients undergoing inventory corrections. The total revenue of the global top 10 IC design houses came to US$37.38 billion for 3Q22, showing a QoQ decline of 5.3%. Qualcomm remained first place in the ranking of the global top 10 IC design houses by revenue for 3Q22. Broadcom returned to second place by overtaking NVIDIA and AMD, who slipped to third and fourth respectively due to weakening demand for PCs and cryptocurrency mining machines.

Regarding US-based IC design houses that were in the top 10 group for 3Q22, Qualcomm recorded a QoQ increase for the sales of smartphone SoCs and 5G modem chips. It also made gains in the automotive electronics market by expanding its collaborations with partners in the automotive industry. As a result, Qualcomm's 3Q22 revenue figures for mobile and automotive offerings reflected QoQ increases of 6.8% and 22.0% respectively. The revenue growth of these two major product categories offset the marginal decline in the revenue for RF front-end chips. Qualcomm's IC design revenue as a whole climbed up by 5.6% QoQ to US$9.90 billion for 3Q22. The company sat firmly at the top of the ranking.

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."

The worldwide semiconductor industry is projected to invest more than $500 billion in 84 volume chipmaking facilities starting construction from 2021 to 2023, with segments including automotive and high-performance computing fueling the spending increases, SEMI announced today in its latest quarterly World Fab Forecast report. The projected growth in global factory count includes a record high 33 new semiconductor manufacturing facilities starting construction this year and 28 more in 2023.

"The latest SEMI World Fab Forecast update reflects the increasing strategic importance of semiconductors to countries and a wide array of industries worldwide," said Ajit Manocha, SEMI president and CEO. "The report underscores the significant impact of government incentives in expanding production capacity and strengthening supply chains. With the bullish long-term outlook for the industry, rising investments in semiconductor manufacturing are critical to laying the groundwork for secular growth driven by a diverse range of emerging applications."

AMD is preparing the launch of the Radeon RX 7900 series of graphics cards for December 13th. And, of course, with recent launches being coated in uncertainty regarding availability, we are getting more rumors about what the availability could look like. According to Kyle Bennett, founder of HardOCP, we have information that AMD is allegedly preparing 200,000 Radeon RX 7900 SKUs for launch day. If the information is truthful, among the 200,000 launch-day SKUs, there should be 30,000 Made-by-AMD (MBA) cards, while the rest are AIB partner cards. This number indicates that AMD's market research has shown that there will be a great demand for these new GPUs and that the scarcity problem should be long gone.

A few days ago, we reported that the availability of the new AMD Radeon generation is reportedly scarce, with Germany receiving only 3,000 MBA designs and the rest of the EMEA region getting only 7,000 MBA SKUs as well. With today's rumor going around, we would like to know if this is correct and if more SKUs will circulate. America's region could receive most of the MBA designs, and AIB partners will take care of other regions. Of course, we must wait for tomorrow's launch and see how AMD plans to execute its strategy.

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%.

TrendForce reports that the recent easing of tight supply for components has led to rising shipments for enterprise servers. Furthermore, ODMs for the most part have been able to sustain the momentum of data center build-out with the demand from ByteDance and the tenders issued by Chinese telecom companies. Nevertheless, the performance of the enterprise SSD market on the whole has been impacted by falling NAND Flash prices. For 3Q22, the NAND Flash industry's enterprise SSD revenue dropped by 28.7% QoQ to US$5.22 billion. Furthermore, all enterprise SSD suppliers recorded a negative performance for the period as well.

Regarding individual enterprise SSD suppliers' revenue figures for 3Q22, Samsung posted around US$2.12 billion. Its market share also shrank to 40.6% from 44.5% in 2Q22. Samsung's performance was mainly dragged down by the decline in its NAND Flash ASP. In the aspect of product development, SSDs featuring 128L NAND Flash and PCIe 4.0 will remain Samsung's main offerings for enterprise storage during 2023.

NVIDIA GeForce RTX 4080 graphics card has been out since mid-November and is a great performer in many resolutions and titles. However, with NVIDIA setting its price tag at $1200, it is an expensive product to afford and represents a considerable price jump compared to older xx80 GPU generations. According to MyDrivers, NVIDIA could lower the price starting in mid-December, to better suit the needs of consumers and have a competitive product. With AMD's RDNA3-based graphics cards releasing in the following days, the Radeon RX 7900 XTX costing $999 is a direct competitor to GeForce RTX 4080. If NVIDIA plans to cut the massive MSRP of the RTX 4080, then we expect it to be in the range of Radeon RX 7900 XTX to create better market competition.

Of course, this is only wishful thinking and a rumor that MyDrivers has reported, so we have to wait until the middle of this month to find out if NVIDIA announces the alleged price cut.