Semiconductor market news- September 5 to September 11 | Intel plans price increase in Q4;Memory Market Collapse to Lift TSMC to Top Spot in 3Q22 Ranking…

01.Intel plans price increase in Q4

Intel released its second-quarter earnings in July this year and later confirmed that it would raise pricing for all of its major products, including CPUs.

After releasing its Q2 2022 results, Intel said it missed its double-digit revenue and earnings per share targets. Intel's customer computing and data center divisions both saw huge declines in revenue, and while the company reiterated that they are trying to do better and launch a very good set of products in the second half of 2022, it will be raising prices on most of Chipzilla's components, including CPUs.

In fact, talk of a price increase by Intel has been under discussion for months, with previous reports claiming that Intel would increase the price of CPUs and other components by 20 percent. The list of affected products includes CPUs for client computing servers and a list of other components, such as Wi-Fi connectivity controllers.

It's worth noting that the three CPU and chip divisions mentioned above are Intel's primary businesses, and the company expects pricing for certain products to rise from single digits to 10-20 percent.

02.Memory Market Collapse to Lift TSMC to Top Spot in 3Q22 Ranking

In its 2Q conference call, major NAND flash memory supplier Western Digital commented that the inventory adjustment currently underway is definitely very, very sharp in the quarter we are in (3Q22).Western Digital's outlook is for a company-wide sales decline of 18% this quarter. With hard disk drives (HDDs) making up about half of the company's sales and expected to show only a modest decline in 3Q, IC Insights believes that its NAND flash business is likely to register a drop of at least 20% this quarter.

In early September, Kyung Kye-hyun, Samsung's co-CEO and head of its semiconductor unit said, The second half of this year looks bad, and as of now, next year doesn't really seem to show a clear momentum for much improvement.

Taiwan-based Nanya is a relatively minor player in the global DRAM market, but its monthly sales data provides some insight into how swiftly the DRAM market can shift gears from boom to bust. As shown in Figure 1, the company's August 2022 DRAM sales, when shown in U.S. dollars, were 39% of what they were in August 2021 and down 53% from March's sales, just five months ago!

With the memory market currently in a free-fall, IC Insights expects foundry giant TSMC to surpass Samsung and take over the top spot in the semiconductor company sales ranking in 3Q22 (Figure 2). As shown, Intel is expected to move to the third position in the ranking with 3Q22 sales that are 26% less than TSMC's. Illustrating the swiftness of TSMC's rise to the top, TSMC was ranked as the third largest semiconductor supplier in the world in 2021 and had sales that were 31% less than Samsung's.

03.Global semiconductor manufacturing equipment sales up 6% year to year in Q2 2022

SEMI announced that global sales of semiconductor manufacturing equipment in April-June 2022 increased by 6% year-on-year to $26.43 billion, up 7% from the previous quarter.

By region, the largest increase was in Taiwan, China, at $6.68 billion, up 32% year-to-year. Sales to mainland China fell 20 percent to $6.56 billion. South Korea fell 13% to $5.78 billion and Japan 7% to $1.65 billion. Sales to North America, on the other hand, rose 57% to $2.64 billion, and Europe also increased 2.6 times to $1.86 billion, with both regions outperforming the previous year for five consecutive quarters.

04.Apple to Add Chinese NAND Flash Storage Supplier for Future iPhones

According to Nikkei, the reported move that Apple has taken is going to be the first time that a U.S.-based company is going to start purchasing from a Chinese memory chipmaker. In addition to adding a huge boost to the local sector, Apple will be able to negotiate a better pricing for iPhone and iPad NAND flash memory.

It is unclear if the tech giant is being pressured to purchase these components from Chinese manufacturers. China has a habit of resorting to such tactics in a move that applies pressure on foreign technology companies that want to operate within the country. An industry executive states that Apple partnering with the firm means that it will be able to increase its smartphone growth in this region.

Apple is currently purchasing NAND flash memory chips for its iPhones from Toshiba of Japan, Western Digital of the U.S., SK Hynix and Samsung Electronics of South Korea. It is the world's biggest consumer of these chips, taking roughly 15 percent of overall global demand of 160 million GB in 2017, according to Sean Yang, an analyst at a Shanghai-based research company CINNO. Due to the pricing fluctuations of NAND flash memory, it will be seen as a key move for Apple if it brings the manufacturer on board.

05.Intel invests another $20 billion to build 2 chip factories

On September 9, Intel CEO Pat Gelsinger announced that it will invest $20 billion in a new large-scale wafer fab in Ohio, USA. This is part of Intel's IDM 2.0 strategy. The entire investment plan is as high as $100 billion. The new factory is expected to be mass-produced in 2025. The "1.8nm" process will bring Intel back to the semiconductor leadership position.

06.The PC supply chain has returned to normal, and the impact of chip shortages on the server market continues

Dell believes the PC supply chain has largely returned to normal after a few years on a roller coaster of the COVID-19 pandemic. Tom Sweet, the company's chief financial officer, said there will always be issues affecting the consumer PC supply chain. But from an industry perspective, the current mode of operation is close to the historical norm. Unfortunately, as the chip shortage continues, the server market will take longer to soften its impact.

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