The combined revenue of global wafer foundries is forecast to decrease by 8 percent year-on-year to US$15.36 billion this quarter, extending last quarter’s downturn caused by political and economic instability around the world, TrendForce Corp (集邦科技) said on Thursday.
Global wafer foundries’ combined revenue for this year might fall by about 3 percent from last year, which would be the first decline in a decade, the Taipei-based market researcher said in a report.
“A glance at 2019 shows a worldwide economy majorly impacted by the tariff disputes between the US government and China, India and Mexico, as well as the conflicts in the Middle East,” TrendForce semiconductor analyst Kurt Chen (陳彥尹) said in the report.
Based on TrendForce’s revenue projection, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which dominates the world’s foundry industry with a market share of nearly 50 percent, would again outperform the global industry this quarter with a comparatively small 4 percent decline in revenue from a year earlier to US$7.55 billion, thanks to increased demand for its advanced 7 nanometer (nm) chips.
However, TSMC said at its annual general meeting on June 10 that production of Huawei Technologies Co (華為) products was declining due to Washington’s trade sanctions on the Chinese firm.
Huawei’s semiconductor unit, HiSilicon Technologies Co (海思半導體), is one of the Taiwanese chipmaker’s biggest clients.
The US-China trade dispute and Washington’s blacklisting of Huawei would further affect the global wafer industry’s revenue in the second half of this year, including TSMC’s, TrendForce said.
The second-largest foundry, Samsung Electronics Co, is forecast to see revenue fall 9 percent annually this quarter to US$2.77 billion, while GlobalFoundries Inc would stay in third with revenue declining 12 percent to US$1.34 billion, TrendForce said.
However, Samsung potentially has the most to gain from a changing global landscape given the complete network of distribution channels it has established worldwide, not to mention that it is Huawei’s main competitor in overseas smartphone markets, the report said.
“Judging from the smartphone and processor supply chains, Samsung’s adoption of its own Exynos processors in its flagship phones would affect TSMC’s 7nm processes the most,” Chen said.
“If Samsung takes over Huawei’s share of the European market, TSMC would find it difficult to retake the share of the market previously belonging to its flagship processors,” he said.
According to media reports in Taiwan and South Korea, Samsung’s foundry business is likely to receive new orders in the near term, at the expense of TSMC, as Nvidia Corp and Qualcomm Inc reportedly plan to produce their next-generation chips using Samsung’s 7nm technology with extreme ultraviolet (EUV) lithography.
Until recently, Nvidia primarily ordered its high-end graphics chips from TSMC, while Qualcomm last year placed orders for its latest application processors with the Taiwanese firm.
“We attribute the increased focus on Samsung’s foundry business to the company’s aggressive adoption of EUV equipment for the 7nm process,” NH Investment & Securities Co analyst Doh Hyun-woo said in a note on Tuesday last week. “In particular, Samsung has lowered unit prices for certain clients, offering full-mask sets for less than its competitors’ multi-layer masks.”
TSMC’s foundry business would continue to grow over the long term, regardless of political issues, thanks to the company’s strong commitment to its clients, Doh said, adding that, in the short term, some US customers are likely to prefer Samsung due to the US government’s tightening controls.
Even though the trade tensions between the US and China are expected to benefit Samsung’s foundry business, the company could need several years to narrow the gap with TSMC, Yuanta Securities Investment Consulting Co (元大投顧) said.
TSMC beats Samsung in terms of technological leadership and its ecosystem, and most importantly, has no conflict of interest with customers, Yuanta analysts led by Steve Huang (黃柏璁) said in a note last week.
“To attract more external customers, the conflict of interest issue must be addressed, and spinning off Samsung’s foundry business could be a good approach for the company,” the analysts said.
MediaTek Inc (聯發科), the world’s biggest 5G chip supplier, saw its ranking rise by one notch to No. 7 last year among world semiconductor vendors, as it benefited from the rapid 5G smartphone uptake in China after Huawei Technologies Co (華為) was forced to exit the market, Gartner Inc said in a report yesterday. MediaTek’s revenue soared 58.8 percent to US$17.45 billion last year from US$10.99 billion in 2020, outpacing the global semiconductor industry’s growth of 25 percent, according to Gartner’s tally. That gave MediaTek a 3 percent market share. The Hsinchu-based chip company ranked No. 8 in 2020, behind Texas Instruments
Medigen Vaccine Biologics Corp (高端疫苗) yesterday reported higher neutralizing antibody levels in people who were given its COVID-19 vaccine as a booster after two AstraZeneca doses, the company said. In a trial of 200 participants who received Medigen’s COVID-19 vaccine, neutralizing antibodies against the Omicron variant of SARS-CoV-2 grew by 5.7 times one month after being administered, Taoyuan General Hospital said. Medigen said that the results have been submitted to medRxiv, an online platform for researchers to share complete but unpublished papers. Another trial conducted by National Taiwan University Hospital showed that among 45 participants who received three doses of the Medigen vaccine,
BEATING EXPECTATIONS: With electric vehicles and the metaverse on the horizon, the company predicts a solid first quarter as customers stockpile inventories Key iPhone assembler Hon Hai Precision Industry Co (鴻海精密) could achieve an “unprecedented” performance in the first quarter, chairman Young Liu (劉揚偉) said. “Our performance in the first quarter might surpass how we fared in the past few years, and it is likely that some staff at key sites might only get two days off during the Lunar New Year holiday,” Liu said in prepared remarks for the company’s annual workers’ party yesterday. Manufacturers around the world are racing to build up inventory out of fear that outbreaks of the Omicron variant of SARS-CoV-2 and other uncertainties could further disrupt their supply
Jardine Matheson Holdings Ltd (怡和洋行), a diversified Asia-based group whose businesses span property, transport, retail and luxury hotels, is considering strategic options for its restaurant unit, people with knowledge of the matter said. The Singapore-traded conglomerate is weighing a sale of Jardine Restaurant Group (怡和餐飲集團), a wholly owned subsidiary that operates KFC and Pizza Hut franchises in Taiwan, Hong Kong, Macau and Vietnam, said the people, who asked not to be identified as the information is private. The subsidiary also runs Pizza Hut restaurants in Myanmar, according to its Web site. Jardine Matheson has held preliminary discussions with advisers, the people said, adding
RSS