A fire occurred at ASML’s factory in Berlin, Germany on January 3, according to TrendForce’s investigations. ASML is the largest supplier of key equipment (including EUV and DUV) required for foundry and memory production. According to TrendForce’s preliminary inquiry, approximately 200m2 out of a factory floor covering 32,000m2 was affected by the fire. This factory primarily manufactures optical components used in lithography systems such as wafer tables, reticle chucks, and mirror blocks. Reticle chucks used for affixing photomasks are in short supply. Currently, the majority of components produced at this factory go towards supplying EUV machines while the lion’s share of demand for these products come from foundries. If the fire delays component delivery, it cannot be ruled out that ASML will prioritize the allocation of output towards fulfilling foundry orders.

Lead time for this exclusive supply of key EUV machines has been long and may affect the timeframe of advanced manufacturing process transition  

In terms of foundries, EUV is primarily used in advanced manufacturing processes smaller than the 7nm node. Currently, the only companies in the world using this equipment for manufacturing are TSMC and Samsung including TSMC’s 7nm, 5nm, 3nm nodes, Samsung’s EUV Line (7nm, 5nm and 4nm) built in Hwaseong, South Korea, and 3nm GAA node. However, due to factors such as the shortage of global foundry production capacity and the active expansion of manufacturing, semiconductor equipment lead times are also stretching further into the future.

In terms of DRAM, Samsung and SK Hynix are already using EUV in their 1Znm and 1alpha nm processes, while US manufacturer Micron is expected to introduce EUV to their 1gamma nm process in 2024. According to TrendForce’s current information, the lead time on ASML EUV equipment is approximately 12 to 18 months. Due to this long equipment lead time, ASML is at liberty to wait for the completion of replace components for those lost in the fire during the time necessary for equipment assembly.

Overall, the ASML Berlin factory fire will have a greater impact on the manufacturing of EUV lithography equipment when it comes to foundries and memory. According to TrendForce’s information, it cannot be ruled out that ASML will obtain necessary components from other factory campuses. In addition, the current lead time for EUV equipment is quite long. Therefore, the actual impact on EUV supply remains to be seen.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

Due to material shortages caused by insufficient semiconductor supply, to date, power management IC (PMIC) prices remain on an upward trend, according to TrendForce’s latest investigations. Average selling price (ASP) for 1H22 is forecast to increase by nearly 10%, reaching a record six year high.

In terms of the global supply chain, in addition to the production capacity of major IDM manufacturers including TI, Infineon, ADI, STMicroelectronics, NXP, ON Semiconductor, Renesas, Microchip, ROHM (Maxim has been acquired by ADI and Dialog by Renesas), IC design houses such as Qualcomm and MediaTek (MTK) have obtained a certain level of production capacity from foundries. Of these, TI is in a leadership position and the aforementioned companies possess a combined market share of over 80%.

In terms of product structure, unrelenting demand from the consumer electronics, telecommunications, industrial control systems, and automotive end-user sectors and product innovation driven by industrial transformation will push a dramatic increase in global market demand for PMICs. The largest application for PMICs is consumer electronic products and there are near term rumblings in demand for notebooks, Chromebooks, smartphones, and televisions. In addition, restocking impetus for a small number of structurally simple items such as low drop-out regulators (LDO) has encountered a real slowdown. However, since the demand placed on PMICs by electronic products is a structural increase, certain models are still experiencing shortages. Qualcomm and MTK are limited by a shortage of mature production capacity on the foundry end, even resulting in a tightening of inventory for PMICs earmarked for self-use.

Furthermore, recovery in the automotive market and rapid growth in electric vehicles, automotive electronics, and advanced driver-assistance systems (ADAS) have increased demand in power source control and management and charging technology. In addition, automotive-use ICs are required to pass a number of inspections and must guarantee consistency and a zero failure rate. Currently, IDM companies’ automotive IC order backlog stretches until the end of 2022. Due to factors such as production running at full capacity and a shortage of raw materials, PMIC suppliers have currently announced longer lead times with consumer electronic IC lead times increasing to 12~26 weeks, automotive IC lead times reaching 40~52 weeks, and a cessation of orders for certain exclusive production models.

TrendForce expects 4Q21 demand for PMICs to remain strong with shortages in overall production capacity. Led by IDM companies, PMIC pricing will remain high. Despite variables related to the pandemic and the difficulties of greatly increasing 8 inch wafer production capacity, TI’s new fab RFAB2 will begin mass production in 2H22. In addition, due to the plans of foundries to carry forward a portion of 8 inch wafer PMIC manufacturing to 12 inch, there is a high likelihood of a moderation in PMIC shortages. However, close attention must still be paid to changes in future market supply.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

In view of the ongoing production capacity shortage in the semiconductor industry and the resultant price hike of chips, revenue of the top 10 IC design companies for 2Q21 reached US$29.8 billion, a 60.8% YoY increase, according to TrendForce‘s latest investigations. In particular, Taiwanese companies put up remarkable performances during this period, with both MediaTek and Novatek posting YoY growths of more than 95%. AMD, on the other hand, experienced a nearly 100% YoY revenue growth, the highest among the top 10.

TrendForce indicates that the ranking of the top five companies for 2Q21 remained unchanged from the previous quarter, although there were major changes in the 6th to 10th spots. More specifically, after finalizing its acquisition of Inphi, Marvell experienced a major revenue growth and leapfrogged Xilinx and Realtek in the rankings from 9th place in 1Q21 to 7th place in 2Q21.

Thanks to strong demand for major smartphone brands’ flagship and high-end 5G handsets, revenue leader Qualcomm’s processor and RF front-end businesses underwent remarkable growths, while its IoT business also benefitted from WFH and distance learning demands generated by the COVID-19 pandemic. Qualcomm’s revenue from its IoT business reached nearly US$1.4 billion, making IoT one of the major growth drivers for the company. For 2Q21, Qualcomm’s revenue reached US$6.47 billion, a 70.0% YoY increase. On the other hand, Nvidia’s revenues from gaming graphics cards and data center solutions each grew by 91.1% YoY and 46% YoY, respectively, in 2Q21. Strong demand from cryptocurrency miners for Nvidia’s high-end gaming graphics cards, along with the data center segment’s demand for Nvidia’s HPC products, propelled the company’s revenue for 2Q21 to US$5.84 billion, a 68.8% YoY growth, and secured the second place for Nvidia on the top 10 list.

Broadcom, which took third place on the top 10, attributed most of its revenue to wired connectivity and wireless products. Regarding wired connectivity products, the continued build-out of 5G base stations worldwide resulted in increasing demand for Broadcom’s high-speed Ethernet controller ICs, whereas for wireless products, the release of certain high-end 5G smartphones also created high demand for Broadcom’s Wi-Fi 6E chips. Similarly, Broadcom’s broadband and industrial solutions businesses both underwent double-digit growths in 2Q21, thereby driving the company’s revenue for 2Q21 to US$4.95 billion, a 19.2% YoY growth. Turning to AMD, the company’s revenue for 2Q21 reached US$3.85 billion, a staggering 99.3% YoY increase, owing to the following: first, the bullish gaming console market; second, massive earnings growths from enterprise, embedded, and semi-custom solutions; third, increased client adoption of AMD’s server CPUs (it should be noted that AMD’s server processor business grew by 183% YoY in 2Q21). AMD took fifth place in the top 10 list for 2Q21.

Regarding Taiwanese companies, MediaTek was able to sustain the momentum it gained in 1Q21 throughout 2Q21. MediaTek’s smartphone chip business, which generated the bulk of the company’s revenue, registered a 143% growth in 2Q21. At the same time, its revenues from other businesses also saw an overall double-digit growth. Hence, MediaTek posted a revenue of US$4.49 billion for 2Q21, a 98.8% YoY growth, and reached fourth place on the list. Finally, Novatek’s SoCs and display driver ICs both performed well in the market primarily due to its close partnerships with major foundries, including TSMC, UMC, and VIS. Revenue from display driver ICs, which had traditionally been Novatek’s primary revenue source, grew by 81% YoY in 2Q21.

Certain rumors in the end-devices markets indicate that demand will likely undergo a slowdown in 3Q21 and lead to decreased orders for certain components. However, given that foundries’ newly installed wafer capacities have yet to kick off mass production, the ongoing chip shortage is expected to persist for now. In addition, as some IC design companies’ client orders still remain unfulfilled, these companies’ revenues will likely experience further growths in 2H21, albeit to a relatively limited extent. It should also be pointed out that Marvell is expected to benefit from Inphi’s earnings for the next two quarters and increase its own revenue by more than 50% YoY in 2H21. Even so, Novatek’s sixth-place ranking is unlikely to be threatened by Marvell in the short run since Novatek will continue to benefit from the ongoing chip shortage and price hikes for the time being.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

Leading driver IC OSAT company Chipbond and major foundry UMC announced on September 3 that the two companies established a strategic partnership via a stock swap, through which UMC (and its subsidiary UMC Capital) will hold 9.09% of Chipbond’s equity, while Chipbond will hold 0.62% of UMC’s equity. TrendForce believes that this strategic partnership will not only strengthen the two companies’ presence throughout all parts of the driver IC supply chain, but also kick-start a business model that involves the simultaneous development of RF front-end ICs and power devices in the third-generation semiconductor industry.

TrendForce further indicates that, although Chipbond has traditionally dominated the panel driver IC OSAT package and test industry along with ChipMOS, recent aggressive attempts at seizing market share by major OSAT companies from China have persuaded Chipbond to expand its business to other markets, such as PA (power amplifier) or electronic filter packaging, in order to diversity its previously specialized operations. The strategic partnership between Chipbond and UMC is also noteworthy because demand has been constantly growing in the third-generation semiconductor market.

Most of the predominant companies in the third-generation semiconductor industry are major IDMs based in Europe, the US, and Japan. As for foundries, they generally play the role of fulfilling excess client orders outsourced by IDMs whose capacities are fully loaded.

Regarding the technological competencies of foundries in the power devices industry, Taiwanese foundries (including TSMC, VIS, and EPISIL) possess the competitive advantage in terms of manufacturing processes, while WIN and AWSC are also among the most representative foundries in the RF front-end segment.

Although UMC slightly lags behind some of its other competitors in the aforementioned markets, its subsidiary Wavetek has been actively strengthening its competencies. For the RF front-end segment, Wavetek is making strides towards 5G PA manufacturing by leveraging its existing 4G PA successes. On the other hand, Wavetek is also in the midst of developing its own GaN on Si power devices.

It should be pointed out that the production of back-end components such as power devices and RF front-end remains relatively low in scale. Hence, in consideration of order volumes, profitability, and equipment costs, major OSAT companies such as ASE and Amkor generally are unwilling to fulfill package and test orders for these components, most of which subsequently fall to either foundries or IDMs.

For Chipbond, which is attempting to enter the power devices and RF front end markets, the aforementioned situation spells good news, as Chipbond has to compete with only mainstream foundries and IDMs. In spite of the relatively low volume of client orders, the room for profitability is still there. Second of all, by partnering with major upstream foundry UMC, Chipbond’s third-generation semiconductor packaging and testing capacities can be secured and stabilized.

On the whole, TrendForce believes that the strategic partnership between Chipbond and UMC can be said to result in a win-win situation with regards to both revenue and industrial integration, since Chipbond now receives an infusion of cash that can facilitate its R&D into third-generation semiconductor, while UMC on the other hand also benefits from the partnership as upstream IDMs may now be incentivized to input wafers at UMC’s fabs.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

（Image credit: UMC）

The analog IC industry is one with a long history of development and product adoption across various applications. Annual analog IC revenue reached US$53.9 billion in 2020. As the spread of the COVID-19 pandemic is gradually brought under control in China and the US this year, their domestic demand for telecom, automotive, industrial, and consumer electronics products has also kept growing, in turn generating strong demand for analog ICs. TrendForce therefore expects IC revenue for 2021 to reach US67.9 billion, a 22.1% YoY increase.

More specifically, analog IC demand from the automotive market is expected to undergo remarkable growth this year, primarily due to the recovery of the global automotive market and the continued trend towards automotive electrification as commercial opportunities from ADAS, EV, and automotive electronics enter a period of rapid growth. In response to demand from automakers and the auto market, various major IDMs have been placing a heavy emphasis on automotive analog IC development. Led by Infineon, NXP, Renesas, TI, and STM, the automotive IC market is expected to experience a 24.6% growth in 2021.

What is an analog IC?

The analog IC is an indispensable component in electronic devices. These chips can be divided into two categories according to their functions: general purpose analog IC and application specific analog IC. The former category encompasses amplifiers/comparators (signal conditioning), signal conversion, interface, and power management (general purpose). In sum, general purpose analog ICs are characterized by their low costs, single purpose, and universal compatibility.

Application specific analog ICs, on the other hand, encompass such use cases as consumer, computer, communications, automotive, and industrial/others. This product category refers to analog ICs that are designed and manufactured in accordance with electrical systems specified by the client. Compared to digital ICs, analog ICs are much more diverse in terms of product type, less costly, and more stable, while also having longer lifecycles.

The current state of the top three analog IC manufacturers

Almost all major analog IC suppliers are IDMs with long histories. In particular, longtime market leader Texas Instruments once against took pole position in the ranking of analog IC suppliers by revenue last year. With a range of analog ICs that includes more than 80,000 products, Texas Instruments possessed a 19% market share. The company is expected to maintain its dominance in 2021 thanks to its diverse product lines, high market acceptance, and high volume of client orders.

Infineon, which took second place on the ranking, registered a 19% YoY revenue growth on the back of its expansion into automotive and power management markets. Third-ranked STMicroelectronics benefitted from rising sales of its analog, MEMS, and sensor product portfolios. TrendForce expects Infineon and STMicroelectronics to continue their upward trajectories throughout 2021.

Whereas China is the largest market for analog ICs, the analog IC industry will see the highest growth in the US

China is expected to account for 42% of analog IC sales, the highest among all regions in 2021, with the consumer electronics segment comprising most of these transactions. However, the US is expected to undergo the highest growth in terms of analog IC sales with a US$10.6 billion revenue in 2021, a 25% YoY growth. This performance can mostly be attributed to the fact that the US economy has been recovering in the post-pandemic era owing to increasing purchases in the consumer electronics, telecom, and automotive markets.

Furthermore, the US government has been pushing for infrastructure developments with a focus on transportation, networking, and electricity generation, leading to expanded procurement of analog ICs used in these applications. As the markets welcomes the arrival of the traditional peak season for analog IC procurement in 2H21, growth in the US market will likely persist as well.

（Cover image source: Pixabay）