01. Chip industry doubles down on Singapore as production hub
Big Western chipmakers and related suppliers are moving to increase production in Singapore as they work to meet growth in demand in the medium to long term and spread their supply chain risks.
French substrate manufacturer Soitec will invest 400 million euros ($430 million) to double the capacity of its wafer plant in Singapore, while U.S. semiconductor manufacturing equipment maker Applied Materials has broken ground on a new 600 million Singapore dollar ($450 million) plant in the city-state.
Soitec is expanding its factory in Pasir Ris Wafer Fab Park, an industrial park that houses manufacturers in the industry in northeast Singapore. Soitec's project is scheduled for completion in 2024 and will add a total floor space of 45,000 square meters, including office space, to the plant.
The Soitec plant in Singapore makes silicon-on-insulator (SOI) wafers. The expansion will see the plant's 300-millimeter SOI wafer capacity double to 2 million units annually. The company is also expected to more than double staffing at the plant to more than 600 by 2026.
02. AMD expected to occupy over 20% of server CPU market and Arm 8% in 2023
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%.
03. Medical equipment industry still suffers from chip shortage
Feb. 23, 2023 -- British medical equipment manufacturer Smith & Nephew said recently that although most of the chip shortage is easing, medical equipment manufacturers are still affected by the shortage of chips.
Smith & Nephew CEO Deepak Nath said that medical equipment makers have smaller order volumes than customers in many other industries, so chip makers have not prioritized chip supplies for the medical device industry. The supply of chips for the medical industry remains problematic.
"The chipsets for these systems have been selected and used for many years, and we can't just replace them because that means we have to go back and forth through regulatory approval," Deepak Nath said.
"In the whole of last year, the sales volume of sports or wound management systems could have been more, and the market demand was greater than our actual production capacity." He added.
The chip shortage means companies are facing very high prices when purchasing at spot buy prices compared to contract prices, Nath said.
04. Insidier: MagnaChip to shut down Gumi fab for a week
Feb. 24, 2023 -- According to insiders in the supply chain, MagnaChip's fab in Gumi, North Gyeongsang Province, South Korea will suspend production for a week from the 25th of this month due to soaring inventory and sluggish demand.
MagnaChip is a manufacturer of OLED display driver chips. Its global market share in 2020 was 33.2%, second only to Samsung Electronics, ranking second in the world. The fab in Gumi mainly produces power semiconductors. Based on the input of 8-inch wafers, it has a monthly production capacity of 40,000 pieces.
According to Magnachip's performance announcement for the fourth quarter of 2022 and the full year of fiscal year 2022, its revenue in the fourth quarter was $61 million, a year-on-year decrease of 44.7%; the gross profit margin was 26.4%, which was 35% lower than the same period in 2021; operating loss was $10.117 million, compared with an operating profit of $63.87 million for the same period in 2021. The company's 2022 full-year revenue was $337.7 million, a year-on-year decrease of 28.8%, and its operating profit turned from $83.4 million in the previous year to a loss.
From a quarterly perspective, MagnaChip's earnings declined significantly. The industry insider said that MagnaChip's one-week shutdown should be caused by the decline in performance.
05. Intel pushes back TSMC order for 3nm chiplet tiles to 2024
Intel will delay orders for 3nm tiles with foundry TSMC until 4Q24, according to a Digitimes report that referenced sources at PC makers.
Intel had been expected to take 3nm chips from TSMC in 2022 and then pushed that back to 4Q23. A report in August 2022 had said Intel had decided to postpone the start of GPU tile production for its Meteor Lake processor on TSMC’s N3 node from late 2022 to late 2023.
Now the Meteor Lake processor is expected to have N5 GPU tile alongside a Intel4 (roughly 7nm EUV) CPU tile and launch in the 2H23.
The follow-on component is Arrow Lake which is expected to have an Intel20A (roughly 5nm EUV) CPU tile and an N3 GPU tile. The launch is expected late in 2024
The push out could be due to the depth of the chip market recession that is now being seen in 2023. However, Intel runs the risk of being outrun by the likes of AMD, Apple, Qualcomm and others as the TSMC 3nm is already up and running.
06. Delta Electronics shows business prospect for EV, data center
Delta Electronics said on Feb 23 that its EV business – on-board chargers and battery management systems, will get even better this year, after announcing improved financial results for last year. Chairman Yancey Hai said at the latest earnings call that "availability of materials and components has much recovered" but there is still "a little bit of a shortage of some MCU and MOSFET."
Hai added that with stably increasing order volume, he expects the EV business to turn profitable this year. He also indicated that Delta's products are "used in most of the new models by major US, European, and Japanese carmakers."
07. AV vehicle costs to continue declining as supply chain localizes, says Baidu
Baidu announced that it is integrating its AIGC service Ernie Bot across Baidu's operations to enhance user experience. There are also plans for Ernie Bot to be integrated into Apollo Smart Cabin and Xiaodu's smart devices and services, the company said at the latest earnings call on Feb 22.
Baidu reported total annual revenue of CNY123.7 billion (US$17.9 billion) for fiscal year 2022 with 1% yoy-growth. During the call, the company said it will continue investing in expanding its robotaxi service, Apollo Go, and AI-generative content (AIGC) service, Ernie Bot.
The company received the first license to test fully driverless vehicles in Beijing at the end of last year. The fully driverless robotaxi service is already available in Chongqing and Wuhan, while in Wuhan, it has reached more than 100 customers.
As of the end of January of 2023, Apollo Go has received a cumulative order volume over 200 million. According to Li Zhen-yu, SVP and GM of Baidu's intelligent driving group, each vehicle of Apollo Go provides more than 15 rides a day on average in top cities like Beijing, a volume quite close to what a taxi can do.
The company will continue working on attaining green light in more and more cities in China to operate robotaxi fleets and on reducing vehicle costs.