Global fab equipment spending for front-end facilities is expected to decrease 22% year-over-year (YoY) to US$76 billion in 2023 from a record high of US$98 billion in 2022 before rising 21% YoY to US$92 billion in 2024 to reclaim lost ground, SEMI announced today in its latest quarterly World Fab Forecast report. The 2023 decline will stem from weakening chip demand and higher inventory of consumer and mobile devices.

Next year's fab equipment spending recovery will be driven in part by the end of the semiconductor inventory correction in 2023 and strengthening demand for semiconductors in the high-performance computing (HPC) and automotive segments. "This quarter's SEMI World Fab Forecast update offers our first look ahead to 2024, highlighting the steady global expansion of fab capacity to support future semiconductor industry growth driven by the automotive and computing segments and a host of emerging applications," said Ajit Manocha, SEMI president and CEO. "The report points to a healthy 21% uptick in equipment investment next year."

Last month, reports were saying that Intel wanted an additional €3.2 billion from the German government in subsidies to build its fab in Magdeburg, but apparently that wasn't nearly enough, as the company has increased its demands to somewhere between €4 billion to €5 billion. What triggered Intel to go ask the German government for even more cash is most likely a combination of things, as Intel is going to want to cover increases in costs courtesy of interest hikes and the inflation that's going on globally, alongside soaring energy prices in Europe. The expected cost of the new fab is said to have increased from €17 billion to €30 billion, which is not exactly pocket change.

In a statement to Bloomberg, Intel said that "disruptions in the global economy have resulted in increased costs, from construction materials to energy," and continued "We appreciate the constructive dialogue with the federal government to address the cost gap that exists with building in other locations and make this project globally competitive." The construction start of the Magdeburg fab has already been delayed and according to Bloomberg, Intel is also considering delaying its planned assembly factory in Italy. It doesn't look promising for either party, as Intel seems to want to spend as little as possible on building its new facilities, while expecting various governments around the world to prop it up until the new facilities are making money. Hopefully neither nation will agree to Intel changing the terms of the deals, as it could cost more nations more than they would earn in long term revenue from Intel.

The smaller foundries in Taiwan—at least compared to TSMC—UMC, PSMC and VIS to name the bigger players, but also other less well known foundries that produce chips on mature nodes, are getting ready for what looks like a price war. In all fairness, all of these companies have hiked their prices multiple times over the past couple of years, so it might just be a return to more normal pricing for these nodes that we're looking at. According to UDN media in Taiwan, the smaller foundries are offering discounts that range between 10 and 20 percent for new orders placed with them.

This is largely due to underutilised production lines for some nodes and the companies are trying to increase the utilisation rate of these nodes. The article mentions that the foundries with 8-inch wafer lines are those hardest hit, especially as they've produced more specialised ICs, such as fingerprint sensors, various driver ICs and power management ICs to mention a few. Some of these foundries are now running at 50 to 60 percent of their capacity, which doesn't bode well for the industry. On the other hand, 12-inch fabs aren't nearly as badly hit and might not offer as attractive discounts to potential customers. Another threat to the Taiwanese foundries is Samsung, which is reportedly also offering around a 10 percent discount on its mature nodes.

The rumour mill has kicked into high gear this week about TSMC planning a second fab in Japan. The original source is the Nikkan Kogyo newspaper (via Reuters), based in Tokyo, although it's unclear where the actual fab would be located, if it's indeed even happening. According to the paper, the new fab would be focusing on 5 and 10 nanometer chips, but production isn't expected to start until sometime in the second half of this decade. This suggests that these would be mainstream nodes by then, which points to yet another fab for either the vehicle industry or something similar.

The fab is said to cost more than a trillion yen, or over US$7.4 billion to build. TSMC's CEO C.C. Wei was asked about the potential fab during TSMC's latest earnings call, but simply said that the company had nothing further to add. TSMC is of course busy building a fab in Japan on Kyushu island, but as it'll have a node capacity for 12 to 16 nm parts, it makes sense that TSMC would already be planning for an extension of said fab that can produce on more advanced nodes as its customers will be moving to more advanced nodes over time.

GlobalFoundries Inc. (GF) (Nasdaq: GFS) today announced preliminary financial results for the fourth quarter and fiscal year ended December 31, 2022.

Key Fourth Quarter Financial Highlights
Revenue of $2,101 million, up 14% year-over-year.
Gross margin of 29.6% and adjusted gross margin of 30.1%.
Net income of $668 million.
Adjusted EBITDA of $821 million.
Cash, cash equivalents and marketable securities of $3,346 million.

Back in December, Micron CEO Sanjay Mehrotra announced that the company would be laying off around 10 percent of its staff and according to the Idaho Statesman, Micron will start at its Boise, Idaho fab. This is despite the company investing US$15 billion in a new leading-edge fab there. That said, it doesn't look like Boise will see any huge cuts in staff, as Micron hasn't issued a WARN notice, which is required when a company is planning on laying off more than 500 people within a 30-day period.

Micron issued a statement earlier this week, saying that its layoffs are a combination of "voluntary attrition, workforce reductions and reduced external hiring," which tends to mean that third party contractors will bear the brunt of the layoffs. Micron is also said to be cutting executive salaries, while also suspending bonuses for employees across the board. Further cost reductions include a halted share buyback program and a reduced production output, the latter due to lower demand. Micron has some 49,000 employees globally, with some 6,000 located in Idaho. The company expects to have completed its job cuts by the end of this month.

To date, Intel has been promised almost €6.8 billion in subsidies from the federal German government, but apparently this isn't enough for Intel, as the company is now asking for an additional €3.2 billion, for a total of €10 billion is subsidies for its Magdeburg fab. The total investment in the fab in Magdeburg—which was announced back in March 2022—is said to be around €33 billion. In other words, Intel is asking Germany to pitch in almost a third of the cost for its shiny new fab. According to an Intel spokesperson quoted by the Register, Intel is worried about the current geopolitical situation and that the demand for semiconductors has declined, plus the fact that inflation has made everything much more expensive. Intel's Arizona fabs ended up costing an extra US$5 billion, which is about a third extra compared to the original cost estimate, so it's not hard to see why Intel is asking for more money here.

At the same time, the Vietnamese government jumped the gun and announced that Intel is looking at investing US$3.3 billion in the country, as part of an announcement of investments of a total of US$7.4 billion in Ho Chi Minh, by foreign companies. The additional US$4.1 billion investments apparently hinges on Intel's investment in the country, more specifically in the Saigon Hi-Tech Park. The official stance from Intel is that "Vietnam is an important part of our global manufacturing network, but we have not announced any new investments." It's unclear what the exact plans are, but Intel is said to have met up with government officials in Vietnam, according to Bloomberg. It's likely that it would be some kind of chip packaging facility, much like what Intel and AMD already has in Malaysia and China, among other places.

TrendForce's recent analysis of the foundry market reveals that demand continues to slide for all types of mature and advanced nodes. The major IC design houses have cut wafer input for 1Q23 and will likely scale back further for 2Q23. Currently, foundries are expected to maintain a lower-than-ideal level of capacity utilization rate in the first two quarters of this year. Some nodes could experience a steeper demand drop in 2Q23 as there are still no signs of a significant rebound in wafer orders. Looking ahead to the second half of this year, orders will likely pick up for some components that underwent an inventory correction at an earlier time. However, the state of the global economy will remain the largest variable that affect demand, and the recovery of individual foundries' capacity utilization rates will not occur as quickly as expected. Taking these factors into account, TrendForce currently forecasts that global foundry revenue will drop by around 4% YoY for 2023. The projected decline for 2023 is more severe when compared with the one that was recorded for 2019.

TSMC today held a 3 nanometer (3 nm) Volume Production and Capacity Expansion Ceremony at its Fab 18 new construction site in the Southern Taiwan Science Park (STSP), bringing together suppliers, construction partners, central and local government, the Taiwan Semiconductor Industry Association, and members of academia to witness an important milestone in the Company's advanced manufacturing.

TSMC has laid a strong foundation for 3 nm technology and capacity expansion, with Fab 18 located in the STSP serving as the Company's GIGAFAB facility producing 5 nm and 3 nm process technology. Today, TSMC announced that 3 nm technology has successfully entered volume production with good yields, and held a topping ceremony for its Fab 18 Phase 8 facility. TSMC estimates that 3 nm technology will create end products with a market value of US$1.5 trillion within five years of volume production.

According to Reuters, Samsung is gearing up to increase the chip production capacity at its P3 factory in Pyeongtaek in South Korea, despite the fact that there's a general slowdown in the semiconductor industry, in addition to the general economic downturn. Samsung is apparently planning on adding 12-inch wafer capacity for DRAM, while also adding more 4 nm chip capacity. The P3 fab kicked off production of Samsung's most cutting-edge NAND flash chips earlier this year and is the company's largest fab overall. According to Reuters, Samsung is aiming to add at least 10 new EUV machines in 2023.

In related news via The Elec, Samsung has seen costs increase significantly when it comes to materials costs relating to the expansion of the P3 fab. So far, the company has racked up extra costs of over a trillion korean Won, or more than US$786 million, largely due to all of its contractors having raised their prices. The report also mentioned that some parts of the expansion of the P3 fab has been delayed by as much as a year, which isn't good news for Samsung and it likely means that the company will see further increases in costs before the expansions are finished.

According to news out of Taiwan, TSMC will hold a ceremony to mark the official mass production start of its 3 nm node on the 29th of December. This is said to help "shatter doubts about de-Taiwanization" or in simpler terms, that Taiwan will lose its golden goose as TSMC invests abroad. The 3 nm fab—known as fab 18—is based in southern Taiwan's Tainan and the ceremony also marks the start of an expansion of TSMC's most advanced fab. TSMC is said to be kicking off its N3E node production sometime in the second half of 2023, followed by its N3P node in 2024, all of which should take place at fab 18, which also produces 5 nm wafers.

In related news, according to Reuters, a Japanese lawmaker from the ruling party has said that TSMC is considering a second plant in Japan, in addition to its current joint venture that is already under construction. TSMC's response to Reuters was that the company isn't ruling out Japan for future fabs, but that the company doesn't have any current plans. At the same time, TSMC is said to be sending executives to Dresden, Germany in early 2023, for a second round of talks about building a fab to help support the European auto industry, although this would be a 28/22 nm fab, which is far from cutting edge these days, although a lot more advanced than most fabs making chips for the auto industry.

The worldwide semiconductor industry is projected to invest more than $500 billion in 84 volume chipmaking facilities starting construction from 2021 to 2023, with segments including automotive and high-performance computing fueling the spending increases, SEMI announced today in its latest quarterly World Fab Forecast report. The projected growth in global factory count includes a record high 33 new semiconductor manufacturing facilities starting construction this year and 28 more in 2023.

"The latest SEMI World Fab Forecast update reflects the increasing strategic importance of semiconductors to countries and a wide array of industries worldwide," said Ajit Manocha, SEMI president and CEO. "The report underscores the significant impact of government incentives in expanding production capacity and strengthening supply chains. With the bullish long-term outlook for the industry, rising investments in semiconductor manufacturing are critical to laying the groundwork for secular growth driven by a diverse range of emerging applications."

Despite reported record revenues of US$2.1 billion in the third quarter of this year, as well as a record net income of US$336 million, GlobalFoundries is said to be cutting its workforce by as many as 800 people. The job cuts are reported by VTDigger, a local newspaper in Vermont, where GlobalFoundries headquarters are located. According to the paper, GlobalFoundries are looking at cutting back on staff at all its global operations, but it's currently now known where the biggest cuts will take place. According to VTDigger, GlobalFoundries has around 14,000 employees globally, which makes the headcount cut around 5.7 percent of its workforce.

Based on comments by an anonymous employee, it was a small number of job cuts that were initially expected inside the GlobalFoundries. It's possible that contractors will be the ones being sacrificed in the first place, as the company has no less than 800 contractors just at its headquarters in Vermont, plus another 2,000 full time employees. GlobalFoundries has fabs in Vermont, New York, Singapore and Germany, but based on the comments by the employee, it's most likely that the major job cuts will take place in the US and Singapore, due to Germany's stricter employment laws. The job cuts are expected to start taking place this month.

Although Morris Chang is no longer in charge of the day to day business at TSMC, the founder of the company is still getting his hands dirty. Chang attended the APEC Economic Leaders Meeting last week, as part of Taiwan's delegation and was questioned by the media about TSMC's future plans. The specific question was about TSMC's Arizona fab, which will initially produce chips using a 5 nm node. The US$12 billion plant is scheduled to kick off production at some point in 2024, by which time the 5 nm node should be a commonly used node rather than close to cutting edge.

When questioned about the future of the Arizona fab, Morris Chang answered that it will be moving to a 3 nm node, which is currently TSMC's most cutting edge node, that has gone into volume production earlier this year with th N3 node, which is set to be followed by the N3E node. According to Chang, there's interest by several countries to have TSMC set up fabs there, but apparently this is not something TSMC is considering at the moment. One potential reason for this would be a suitable labour force, something that has already proven to be tough for the Arizona fab.

Semiconductor manufacturers worldwide are estimated to increase 200 mm fab capacity 20% from 2021 through 2025, adding 13 new 200 mm lines as the industry reaches a record high of more than 7 million wafers per month (wpm), SEMI announced today in its 200 mm Fab Outlook to 2025 report. Surging demand for automotive and other applications are driving the capacity expansion for power semiconductors and MEMS.

Chipmakers including ASMC, BYD Semiconductor, China Resources Microelectronics, Fuji Electronics, Infineon Technologies, Nexperia and STMicroelectronics have announced new 200 mm fabs to meet growing demand.The SEMI 200 mm Fab Outlook to 2025 report shows fab capacity for automotive and power semiconductors growing at a rate of 58% from 2021 to 2025, followed by MEMS at 21%, foundry at 20% and analog at 14%.

Semiconductor manufacturers worldwide are forecast to expand 300 mm fab capacity at a nearly 10% compound average growth rate (CAGR) from 2022 to 2025, reaching an all-time high of 9.2 million wafers per month (wpm), SEMI announced today in its 300 mm Fab Outlook to 2025 report. Strong demand for automotive semiconductors and new government funding and incentive programs in multiple regions are driving much of the growth.

"While shortages of some chips have eased and supply of others has remained tight, the semiconductor industry is laying the groundwork to meet longer-term demand for a broad range of emerging applications as it expands 300 mm fab capacity," said Ajit Manocha, SEMI President and CEO. "SEMI is currently tracking 67 new 300 mm fabs or major additions of new lines expected to start construction from 2022 to 2025."

The Intel Labs and Components Research organizations have demonstrated the industry's highest reported yield and uniformity to date of silicon spin qubit devices developed at Intel's transistor research and development facility, Gordon Moore Park at Ronler Acres in Hillsboro, Oregon. This achievement represents a major milestone for scaling and working towards fabricating quantum chips on Intel's transistor manufacturing processes.

The research was conducted using Intel's second-generation silicon spin test chip. Through testing the devices using the Intel cryoprober, a quantum dot testing device that operates at cryogenic temperatures (1.7 Kelvin or -271.45 degrees Celsius), the team isolated 12 quantum dots and four sensors. This result represents the industry's largest silicon electron spin device with a single electron in each location across an entire 300 millimeter silicon wafer.

Global fab equipment spending for front-end facilities is expected to increase approximately 9% year-over-year (YOY) to a new all-time high of US$99 billion in 2022, SEMI announced today in its latest quarterly World Fab Forecast report. The report also shows the global fab equipment industry increasing capacity this year and again in 2023. "After achieving a record level in 2022, the global fab equipment market is projected to remain healthy next year driven by new fabs and upgrade activity," said Ajit Manocha, SEMI President and CEO.

Taiwan is expected to lead fab equipment spending in 2022, increasing investments 47% YOY to US$30 billion, followed by Korea at US$22.2 billion, a 5.5% decline, and China at US$22 billion, a 11.7% drop from its peak last year. Europe/Mideast this year is forecast to log record high spending of US$6.6 billion, a 141% YOY surge this year though outlays remain comparatively smaller than in other regions. Strong demand for high-performance computing (HPC) advanced technologies is driving the region's jump in spending. The Americas and Southeast Asia are also expected to register record high investments in 2023.

onsemi, a leader in intelligent power and sensing technologies, today celebrated the inauguration of its expanded silicon carbide (SiC) fab in Roznov, Czech Republic. Multiple guests of honor attended the ribbon cutting ceremony led by Ministry of Industry and Trade Section Chief Zbyněk Pokorný, Governor of the Zlín Region Radim Holiš and City Mayor Jiří Pavlica as well as other local governmental dignitaries, signifying the importance of this event and manufacturing of semiconductors in the Czech Republic.

Starting in 2019, onsemi added SiC polished wafer and SiC epitaxy (EPI) wafer production to its existing silicon polished and epitaxy wafer and die manufacturing in Roznov. Having outgrown the original site, reconstruction of a new building began last year to further expand wafer and SiC EPI manufacturing. Over the next two years, this expansion will increase the site's SiC production capabilities by 16 times and create 200 jobs by the end of 2024. So far onsemi has invested more than $150 million in the Roznov site and plans to spend an additional $300 million through 2023. onsemi was recently awarded the Association for Foreign Investments (AFI) Prize for Significant Contribution in the Field of Investment for its SiC investments in the Czech Republic.

Kioxia Corporation and Western Digital Corporation announced today that their joint venture Fab 7 manufacturing facility at Yokkaichi Plant has been approved to receive up to 92.9 billion yen subsidy from the Japanese government. The subsidy will be granted under a designated government program aimed at facilitating corporate investment in cutting-edge semiconductor production facilities and securing stable production of semiconductors in Japan.

Leveraging their 20-year joint venture partnership, Kioxia and Western Digital will continue to accelerate the development and production of cutting-edge flash memory at the Yokkaichi Plant, the largest semiconductor plant in Japan. In addition, the two companies will contribute to the development of semiconductor-related industries and talent.

The US Congress hasn't been able to agree on passing what is known as the CHIPS Act, which consists of some US$52 billion in subsidies for semiconductor manufacturers and it appears that Intel isn't very pleased. As such, the company is said to have put the brakes on the groundbreaking ceremony for its planned Ohio fab, which was meant to take place on the 22nd of July. Intel allegedly sent out an email to various state and federal lawmakers that it has placed the ceremony on hold, indefinitely due to the lack of progress on the CHIPS Act. In an official response from Intel to the Register, the company said that the event hasn't been rescheduled, which the publications says means that there's no new date planned for the groundbreaking ceremony.

It will apparently still be held at some point, but the Intel spokesperson had no answer when questioned if the ceremony was contingent on the CHIPS Act. However, the Register was told that the planned construction start date remains unchanged, for now. That said, Intel also issued a statement saying "the scope and pace of our expansion in Ohio will depend heavily on funding from the CHIPS Act.", which was also part of the initial press release back in January when the fab plans were announced. If the CHIPS Act doesn't happen, Intel's plan seems to be to focus on countries outside of the US where the company is getting subsidies, although the Ohio fab is still likely to be built, just at a slower pace. Intel's CEO, Pat Gelsinger hasn't been mincing his words either, having told Congress "We've already wasted several quarters since the Senate acted last year, and now it's time for us to move forward rapidly," back in March.

Nanya Technology, part of the Formosa Plastics Group, which is one of the largest conglomerates in Taiwan, will hold a ground-breaking ceremony for its new 12-inch fab that will be built in New Taipei City later this week. It'll be the biggest investment Nanya has done in the past decade, as the company is investing US$10.1 billion into building the new fab. This is obviously a lot less than TSMC is investing, but DRAM is made on different nodes to those that TSMC makes its customers products on, since DRAM doesn't benefit as much from node shrinking as other types of semiconductors.

The new fab will be located near one of Nanya's current fabs, in the Taishan district. Mass production is scheduled to start some time in 2025 and the fab is said to have a monthly capacity of around 45,000 wafers. Right now it's scheduled for a 10 nm technology node, but this might change by the time that the fab is up and running, especially considering that Nanya is already producing a range of 10 nm based products in some of its current fabs. Nanya's goal is to develop its next generation of 10 nm DRAM independently from other DRAM makers, as to avoid having to pay patent licence fees to its competitors.

According to TrendForce, market conditions in 1H22 were chaotic and there was disparate demand for chips of varying functionality. Given the global development of electronic devices and power systems, overall demand for power management ICs (PMIC) is still relatively good. PMICs are used in consumer electronics, communications, computing, industrial control, automotive and other fields. In 2H22, supply and demand gradually diverged and demand for automotive Switching Regulators, Multi Channel PMICs was strongest.

According to TrendForce, there are various specifications and types of PMICs, including Linear Regulators, etc. Even usage scenario dependent products such as Battery Charging & Management, Voltage References, and USB Power Delivery ICs all fall into this category.

Recent news suggests that TSMC isn't too interested in setting up a fab in Europe, but it appears there are other interested parties that are now courting the EU, namely a potential joint venture between GlobalFoundries and STMicroelectronics. The two companies are hoping to get a slice of the same cake as Intel, namely the European Chips Act, to help subsidise the cost of the proposed fab. Although GlobalFoundries are headquartered in New York and STMicroelectronics in Geneva, the latter being a French-Italian conglomerate, the planned location for the new fab will be somewhere in France.

It's highly unlikely that this will be a cutting edge or even a leading edge fab, as neither company is in the business of producing products in those market segments. ST makes a wide range of chips from MCUs and other types of microprocessors, to specialised memory products, a wide range of sensors, MEMS based devices and all kinds of electronics for electrical vehicles, as well as highly specialised components for the space industry. GloFo obviously stepped off the competitive foundry ladder some years ago and have been focusing on specialised processes and nodes since then, such as FD-SOI, a technology, something the two companies announced a joint partnership around earlier this year. As such, it's likely that this potential fab will focus on making parts needed for the automotive industry in Europe, among other things. There's still a long way to go and neither company has made any kind of official statement about the potential partnership as yet.

Global fab equipment spending for front-end facilities is expected to increase 20% year-over-year (YOY) to an all-time high of US$109 billion in 2022, marking a third consecutive year of growth following a 42% surge in 2021, SEMI announced today in its latest quarterly World Fab Forecast report. Fab equipment investment in 2023 is expected to remain strong.

"The global semiconductor equipment industry remains on track to cross the $100 billion threshold for the first time as shown in our latest update of the World Fab Forecast,"said Ajit Manocha, president and CEO of SEMI. "This historic milestone puts an exclamation point on the current run of unprecedented industry growth."