After the peak of component crunch in the second quarter along with insufficient inventory in the third quarter, stress of stagnant deliverables on the highway seems to have been relieved. A consensus of the supply chain is to let the manufacturers breathe. The fourth quarter is in line with the traditional off-season, and the days should be easier. From foundries to IC design houses, Taiwanese manufacturers are in the limelight now. DIGITIMES Asia has noted in its reports that the foundry sector is now a seller's market with strong demand to last in end of 2022. Such messages are based on dynamic changes in demand-supply status of IT industry from the most upstream of the supply chain. Component shortages and component cannibalization require long-term rolling tracking. DIGITIMES Asia has been making dynamic adjustments to its views in line with rolling forecasts.
TSMC is evaluating the feasibility of building more fabs overseas fabs, including Germany, according to the foundry house's chairman. Strong demand and tight capacity are sending foundry quotes rising. UMC is mulling raising service fees further by 10-15% in first-quarter 2022 for 40nm process. MIH CEO Jack Cheng believes the Foxconn-led open platofrm for EV development is revolutionzing the car industry.
Chip shortage gas been serious, but Apple and carmakers are both asking for more ICs, the former looking to secure supply for its upcoming devices and the latter to prevent dirsuptions to their productions. Chinese IC designers are seeking more advanced manufacturing support from TSMC for their AI and HPC chips. Taiwan-based server makers are keen on expanding production capacity to meet strong demand.
Although the coronavirus pandemic has gradually been put under control, notebook ODMs still see their clients placing long-term orders, extending their order visibility beyond the fourth quarter of 2021. Meanwhile, Epistar and China-based Sanan have both entered into Samsung's mini/microLED chip supply chain and will begin delivery in the second half. Prices of MCUs will continue to rise through the end of 2021 as the supply of the chips will be undermined by nationwide lockdown in Malaysia and reduced support from Chinese foundries.
According to the ancient Chinese thinker Zhuangzi, persistence on building up competence over time is the only way to earn people's trust. Taiwan, with a small population of less than 24 million, has managed to gain advantages in the semiconductor and electronics supply chains. Taiwanese people call TSMC the "sacred mountain" that protects the country - an analogy to the mountain range running the length of the island. And some argue that China would not attack Taiwan recklessly because of TSMC's importance in the global supply chain. The argument may not stand but it does indicate there have been changes in TSMC's role in the wake of geopolitics in the US-China standoff.
IKKA Holdings (Cayman), a maker of precision plastic injection molded components, was successfully listed on the Taiwan Stock Exchange on May 31, 2021. DIGITIMES recently talked to Vincent Hu, chairman and COO of IKKA, about why the company focuses on plastic injection and how it is going to work more closely with automakers in China, Japan and Southeast Asia.
Strong demand and tight capacity are pushing up foundry serivce quotes. Major Taiwan-based foundry houses are expected to report record-high sales in third-quarter 2021. The overall handset market may be weak, but 5G smartphone demand is picking up. Smartphone chip vendors expect their sales to be fueled by 5G offerings in third-quarter 2021. Servers are also gearing up for the 5G edge computing boom.
Many years ago, a friend of mine in the industry told me a joke about customer relationships in the foundry sector. He said that UMC took good care of customers and would actively matchmake customers for partnership opportunities. SMIC took pride in being a national icon and gave the best service to its fellow Chinese firms. It was not the case for TSMC though. Its customers came from near and far for its leading-edge technology. If the yield rate for a customer's chips was not up to standard, TSMC was not to blame. There must be something wrong with the customer's design or spec because TSMC never made a mistake.
China, which has been relying heavily on semiconductor imports, is keen to improve it IC self-sufficiency. But DIGITIMES Asia president Colley Hwang thinks the key for China is to keep the momentum for its economic growth. Apple reportedly will introduce the third-generation iPhone SE series in first-half 2022 adopting A14 Bionic, creating opportunities for its semiconductor supply chain. Thanks to WFH deeds, MIS has expects its shipments for IT devices to stay strong in 2021.
With software defined vehicles emerging as a new trend for the auto industry, automotive operating systems and software programs will become a new field of competition in the market, prompting related players to step up the development of relevant solutions, according to Digitimes Research.
China imported more semiconductor chips than oil for the first time in 2013. According to BCG, China imported US$350 billion worth of semiconductor chips in 2020, which represented about 60% of the global semiconductor market. The amount was twice as much as China's oil imports. Self-sufficiency therefore has become the most critical part of China's national development strategies. Backed by strong state support, YMTC raised its goal of attaining a 3-4% share of the global market in 2022 to 7%. SMIC also has plans to build four new fabs. However, there have been reports that Chinese corporations including YMTC and SMIC are having difficulty acquiring production equipment from abroad. The US has China's semiconductor sector in a stranglehold amid intensifying conflicts. Uncertainties are lying ahead for China's semiconductor industry.
As wafer foundries are preparing for the next stage of competition, TSMC chairman Mark Liu has given out some details about the company's investments in the US during an investor conference. Meanwhile, Intel is rumored to consider buying Globalfoundries, eyeing for its capacity, but sources from Taiwan's upstream supply chain believe the move is unlikely. On the other hand, Chromebook shipments may slip 50% between July and August, as demand from the education sector will begin to fade.
The reason why I am so optimistic about the competition between TSMC and Samsung is that neither quantum technology nor in-memory computing will dictate the outcome before 2025. Even if Samsung is able to make a breakthrough, it will not enter commercialization and make a significant impact until sometime in the 2030s.
TSMC has reported sales growth for second-quarter 2021, and expects its sales to rise further in the third quarter. The world's top foundry house has also raised it sales growth outlook for full-year 2021. Foundry houses have had difficulties building new capacity for mature nodes, supply for which will remain tight through 2022. Foxconn has made yet another move to expand its presence in the EV sector. It has announced it will invest in Singapore-based Li-metal battery maker SES.
The popularity of Bluetooth LBS (location based service) apps is rising as the related applications can be used for direction-tracking or as electronic fences to trace and analyze the footprints of confirmed COVIC-19 cases, helping curb the spread of the coronavirus, Digitimes Research has found.
Although digital signature of remote documents is no longer a problem, how to distinguish the authenticity of signature documents and how to verify that the signature is made by the countersigner in person is a pain point. Hungarian start-up Birosign, which was selected by the Epoch Foundation Garage+ Accelerator in early June as one of the 46 must-see start-ups at Computex 2021's virtual exhibition, provides a solution to this problem by using sensor technology and machine learning.
