One Week News | China Semiconductor Manufacturing Co., LTD. : Some market demand has already shown signs of recovery....

1. China Semiconductor Manufacturing Co., LTD. : Some market demand has shown signs of recovery
Xie Zaiju, general manager of wafer foundry China Semiconductor Manufacturing Co., LTD., revealed at the 18th French conference that the first and second quarters should be the bottom of the operation. He said that although customers' orders were still relatively conservative recently, they also actively negotiated prices, showing signs of recovery in some markets.
By product line, he said driver IC customer demand picked up significantly, CMOS sensing chips also returned to temperature, power management chip customer demand was a late downward revision and is still destockizing, and DRAM customer tapering will continue into the second quarter.
Looking at the recent market situation, he pointed out that there are three reasons to be optimistic about the market boom:
First, Netcom infrastructure needs to restart, including WiFi, IP Cam, panel and other industries, occasionally urgent orders, but also drive the demand for niche memory, helping customers to reduce inventory.
Second, although the growth of automotive semiconductor can be expected, but in the past period of time, due to the impact of the length of material into the inventory adjustment stage, power components, MOSFET, IGBT some downward revision, MCU film demand is strong.
Third, geopolitical factors cause the supply chain diversion to continue to ferment, many OEM customers' product lines have to be rearranged, which is conducive to the company to get new orders, but the revenue of the new business is expected to show in the second half of next year to 2025.
It is worth noting that according to the latest reports of Taiwan media, there is news in the supply chain recently that Samsung has launched a price war for wafer foundry to grab orders, lock in mature manufacturing process, and cut prices by as much as 10%. United Power and World Advanced have also begun to offer price cuts to customers. Industry experts believe that the expected stable average unit price (ASP) situation may be broken as the price competition begins.

2. China has made important breakthroughs in the research and development of 6G communication technology, which maximizes the bandwidth utilization rate
Recently, the 25th Institute of the Second Institute completed China's first real-time wireless communication experiment of terahertz orbital angular momentum transmission in Beijing, which maximized the bandwidth utilization rate and provided important guarantee and support for the development of 6G communication technology in China.
There are two traditional back transmission technologies: wireless back transmission and optical fiber back transmission. In the 5G/6G communication era with "highly dense" base stations, traditional fiber-based bearer network transmission will face high cost, long deployment cycle, poor flexibility and other problems, and wireless backtransmission technology will gradually occupy a dominant position. According to the research report, by 2023, more than 62% of base stations worldwide will use wireless relay.
In the future, the technology can also serve the short-range broadband transmission field of 10m to 1km, provide support for the high-speed transmission between lander and cruiser for lunar exploration and fire exploration, the cable-free bus transmission inside spacecraft and other aerospace applications, and provide information support for China's deep space exploration and the research and development of new spacecraft.

3. How to save oneself from bankruptcy and loss? Japanese panel makers have shifted back to a technology licensing business model
As the industry continues to reshuffle, the number of Japanese panel manufacturers is not only few, the influence is much less than yesterday.
In the field of LCD panels, although Japanese companies were not the first to invent this technology, but it was the first to commercialize it and the largest industrialization of the country. Before the rise of South Korea's panel industry in the 1990s, Japan still held a monopoly position in this industry. For example, in 1994, although the share of Japan's panel industry continued to decline, Japanese companies still accounted for 94% of the market. At that time, Sharp, known as the father of liquid crystal, still held the industry's pricing power.
After entering the new century, especially in the last decade, with the continuous technological breakthrough of Chinese mainland panel manufacturers and the advantage of great cost, not only let the two major Korean panel manufacturers quit the ordinary LCD market, but also stick to the high-level market represented by OLED. At the same time also let China's Taiwan once in the field of display famous "panel five tigers" routed into the existing "display duo", almost will be the Japanese manufacturers "out" of this industry. The latest figures show that the global share of Chinese panel manufacturers increased further in 2022, from 41.5% in the previous year to 43%.
On March 27th JOLED declared bankruptcy
On April 10, JDI announced that it will build an OLED eLEAP production line with Chinese panel maker HKC. In terms of cooperation, JDI mainly provides technology and talent assistance to Huike, and this cooperation mode may shift more to "technology licensing" or "patent licensing" services in the future, the analysis concluded.

4. Seagate fined $300 million for selling hard drives to Huawei
On April 19, the U.S. Commerce Department fined Seagate $300 million for "violating" U.S. export control rules by selling more than $1.1 billion worth of goods to Huawei.
In recent years, the United States has focused on cracking down on Huawei, including Huawei on its list of government entities in 2019. In August 2020, the United States government imposed additional restrictions on the sale to Huawei of certain foreign-made products made with American technology.
According to the Commerce Department, Seagate's subsidiaries in California and Singapore illegally sold about 7.4 million hard drives to Huawei between August 2020 and September 2021, making it Huawei's sole supplier of hard drives. When the new rules took effect in 2020, other hard drive suppliers stopped shipping to Huawei, but Seagate continued to supply Huawei despite the new rules.
Seagate's position, however, is that its drives are manufactured in a foreign country, not in the United States, and so are not subject to export control laws. But the executive order issued by the US government said Seagate had misinterpreted the foreign product rules to require an assessment only of the final stages of its manufacturing process, rather than the entire process. Seagate manufactures hard drives in China, Northern Ireland, Malaysia, Singapore, Thailand and the United States and uses equipment, including test equipment, that are within the scope of the controls, it said.
Seagate has now compromised and accepted a $300m fine. In the future, Seagate's penalty will be paid in quarterly installments of $15 million over five years, with the first payment due in October. Seagate has also had to submit to harsh scrutiny, including three audits of its compliance program and a five-year suspension of its export privileges.

5. The price of photovoltaic materials fell in May
Since March, silicon producers have become more willing to ship to reduce inventory pressure, and new silicon capacity has been added month by month. At the same time, as the first wave of silicon production capacity this year will be concentrated in the end of the second quarter, so the silicon price is expected to continue to fall in April and May.
In terms of batteries, the operating rate of silicon wafers continues to rise, coupled with the release of new capacity, so that the battery production capacity in April is still high. Recently, some new production capacity of N-type batteries has been put into production, but the increment is still limited, so N-type batteries still have a large price difference compared with P-type batteries. The downward trend in cell prices is expected at the end of April, mainly due to the continued decline in upstream silicon prices, the easing of wafer prices, and the insistence of downstream PV module makers on cost reduction.
In terms of photovoltaic modules, the profit space brought by cost reduction is mostly blocked in the silicon wafer and cell segment, so the price of photovoltaic modules has not declined significantly for the time being.
Some manufacturers compete for orders at low prices in order to sell, so they have basically dropped to less than 1.7 yuan per watt. TrendForce Jibon Consulting estimates that the PV module price will return to the normal range of about 1.6 yuan per watt in the third quarter.

6.ASML: Lithography machine market demand will exceed production capacity in 2023
As the semiconductor industry enters a downward cycle due to the downturn in the consumer electronics market, upstream semiconductor equipment is also affected by customer destocking and order adjustment. However, the latest financial results released by ASML, a leading lithographic machine company, show that despite the challenges faced by the lithographic machine business, the future of the industry is still positive.
On April 19, ASML reported first-quarter 2023 results, with net sales of 6.7 billion euros, gross margin of 50.6% and net profit of 2 billion euros. New orders in the first quarter were 3.8 billion euros, 1.6 billion of which were for EUV lithography machines.
In terms of end-use, 21% of ASML's photolithographic system shipments in the first quarter were for memory chips, down from 34% in the previous quarter. The industry believes this is mainly due to the continued weakness of the consumer electronics market, memory chip makers reduced capital expenditure and reduced production of wafer foundry. In contrast, logic chips grew to 79 percent from 66 percent in the previous quarter.
The difference between memory chips and logic chips in the end market reflects the structural divergence of semiconductor demand in the context of the cooling consumer electronics market.

7. From upgrading to enabling, semiconductor companies accelerate their path to carbon neutrality
At present, "carbon neutrality" is advancing from a global consensus to a global action. Developed countries and regions such as the United States and Europe have pledged to achieve carbon neutrality by 2050, and China has pledged to achieve carbon neutrality by 2030 and 2060. As a result, global energy demand is expected to increase by 35% in the next 30 years, ushering in a period of rapid development in the new energy sector.
ST has pledged to be carbon neutral by its 40th anniversary. In terms of strategic objectives, ST covers four major areas: automotive, industrial, personal electronic equipment, as well as communication equipment, computers and peripherals. Among them, ST focuses on the fastest growing industrial applications, including manufacturing and process automation, power and energy, medical electronics, building and home control, and security and video surveillance.
Infineon plays the role of "enabler" on the zero-carbon path. Its industrial chain covers all aspects of life from wind and solar solutions on the power generation side, to flexible HVDC solutions in the transmission process, to public transportation and home appliances on the power side.
China's energy conservation and carbon reduction focus on power, transportation industry and renewable energy, while high-efficiency power equipment and new energy vehicles are the focus of development. At present, only the power industry is included in the scope of carbon emission trading, including petrochemical, chemical, building materials, steel, nonferrous metals, paper, aviation and other seven high-emission industries urgently need to be included.
Sunshine power Chen Wei thinks: relatively large probability will be included in electrolytic aluminum, steel, cement these several industries.
Rong Silicon semiconductor Gao Wei thinks: must be the first to start from high energy consumption enterprises, such as thermal power generation, cement, steel industry will be the first into the management.