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Quarterly Outlook: Asian Semiconductor Tech Migration Amid Industry Correction
Demand uncertainty remained a key concern for semiconductor players in
- Tech supply chain inventory continued to rise in 2Q22, driven by slower end-market demand and supply chain concerns. For foundries, utilisation rate remains high for top-tier foundries but lowered for tier-2 players. As we go into 4Q22, more visibility on 2023 demand will help the industry execute necessary cuts to reach healthy demand-supply conditions.
- The adoption of
EUVlithography has been relatively low in DRAMcompared to advanced logic semiconductors. But leading Korean memory makers are now leveraging the technique to drive greater bit growth per wafer and reduce costs.
Inventory Correction Underway
The tech supply chain inventory continued to move up in
Besides Apple and server, the demand trend remains weak across most downstream verticals. Chinese Android smartphone suppliers continue to face a challenging macro environment in overseas markets and from the zero-Covid policy impact in China. The International Data Corporate (IDC) forecasts global smartphone shipments to decline by 6.5% year-on-year.2 However, iPhone demand remains healthy after the iPhone 14 launch, with a longer lead time for the iPhone Pro/Pro Max models. For PC, demand deterioration impacts the semiconductor supply chain. The IDC has again reduced their global PC shipment forecast from -8.2% to -12.8% year-on-year in 2022, representing 305.3 million units.3
For foundries, utilisation rate remains high in
Despite order cuts broadening and the drop in utilisation rates, we are yet to see any major cracks appear in foundry pricing. In fact, TSMC is expected to raise its wafer price by a single-digit percentage in 2023. We expect foundries and memory makers to announce 2023 capex cuts as they draft their budgets, which will impact semiconductor equipment suppliers.
Increasing Adoption of Extreme Ultraviolet in
A key focus for memory makers is to achieve the highest bit growth per wafer with the lowest cost.
Samsung is one of the industry’s earliest adopters of
Overall, bit density improvement has been slowing in recent years. Considering the relatively limited scale of
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