Counterpoint Research Weekly Newsletter

Infographic: Q2 2023 | Semiconductors, Foundry Share and Smartphone AP Share

Infographic: Semiconductors Top 7 in Q2 2023

Intel maintained #1 place in Q2 2023 amid memory market slow down, which dragged down major memory players performance such as Samsung, SK Hynix and Micron. In addition, Nvidia took over the second place from Samsung due to the revenue booming on its data center business supported by strong AI server demand. Nvidia expects to see another wave of revenue growth in the upcoming quarter which could make its revenue expand again. Qualcomm’s revenue was capped by looming handset revenue and thus ranked #4 in the quarter. Broadcom and AMD’s revenues were relative resilient amid demand uncertainty.

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Infographic: Global Smartphone AP Share in Q2 2023

Global Smartphone AP Market Share by Shipments

MediaTek dominated the smartphone SoC market with a share of 30% in Q2 2023. MediaTek’s shipments slightly increased in Q2 2023 as the inventory levels came down and the competition is growing in the entry level 5G. New smartphone launches in the low and mid-end segments have increased the shipments in Dimensity 6000, Dimensity 7000 series. Qualcomm captured a 29% share in the quarter. Qualcomm shipments increased by 14.5% sequentially in Q2 2023 due to the high shipment for flagship chipset Snapdragon 8 Gen 2. Also, Key design wins for the Snapdragon 600 and 400 series have also contributed to the growth of Qualcomm’s shipment in Q2 2023.

Global Smartphone AP Market Share by Revenue

高通主导美联社市场在2023年第二季度40% revenue share. This growth is coming from the premium segment due to the adoption of snapdragon 8 gen 2 in Samsung flagship smartphones and Chinese OEMs. The launch of the Samsung Flip and Fold series has also contributed to this growth. Apple had a 33% share in the AP SoC market in Q2 2023 in terms of revenue. Apple’s share declined by 24% QoQ due to seasonality. The iPhone Pro series is doing better. MediaTek captured the third position with a share of 16% in the total global smartphone AP/SoC revenues. MediaTek revenue remained flat in Q2 2023 due to the weak demand and slow China market.

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信息图:铸造在2023年第二季度收入份额

Foundry Companies’ Share by Revenue

TSMC maintained its leadership in the foundry market with a stable 59% market share in Q2 2023. In contrast, Samsung Foundry’s market share dipped by nearly 1% to 11%, primarily due to ongoing smartphone inventory adjustments and the loss of smartphone AP SoC orders from a US client. On the other hand, UMC saw an increase in market share, driven by the continued strength of DDICs and automotive applications in Q2 2023.

Foundry Industry Share by Technology Node

In Q2 2023, the 5/4nm segment continued to dominate the market, holding a significant 21% market share. This strength was driven by robust demand, particularly in the field of AI, with key customers like Nvidia and Broadcom fueling this momentum. In contrast, the 7/6nm segment experienced weakness due to a slower-than-expected recovery in the smartphone market. On the other hand, the 28/22nm segment remained robust, as demand for primary applications, including DDIC and automotive-related applications, remained strong throughout Q2 2023.

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Counterpoint Quarterly: Q2 2023

Counterpoint Quarterly

IoT Q2 2023

Published Date: 16th August 2023

Overview:This insightful report covers key trends in Smart Home Security Cameras, Cellular IoT Connections, AI-driven transformations, revenue dynamics, and emerging technologies. It offers concise, valuable insights for informed decision-making across diverse industries.

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Global Cellular IoT Connections to Cross 6 Billion in 2030
AI & API Accelerating Digital Transformation Across Verticals
Netgear Q1 2023: Revenue Stutters as Inventory Correction Set to Spill Into Q2
India’s Smart Home Security Camera Shipments Up 48% YoY in Q1 2023

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Global Connected Agriculture Node Shipments to Reach 187 Million Units by 2030
Global Connected Construction Machine Shipments Grew 6.7% YoY in 2022
PAX Revenues Cross $1 Billion in 2022; SmartPOS Adoption Supports Growth

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Automotive Q2 2023

Published Date: 8th August 2023

Overview:This comprehensive analysis covers global EV trends, connected car sales, regional market dynamics, key players, emerging technologies, pricing strategies, and market growth. It also provides concise, insightful automotive trends for informed decision-making.

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Table of contents:

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China EV Sales Defy Subsidy Cuts, Maintain Strong Growth in Q1 2023
AI Needs to Reside in the Vehicle to Work Well
US EV Sales Up 79% YoY in Q1 2023 Helped by Tax Credit Subsidy
Global Passenger Electric Vehicle Market Share, Q2 2021 – Q1 2023
Global EV Sales Up 32% YoY in Q1 2023 Driven by Price War

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Google Puts Auto Expansion in Top Gear
Huawei ADS 2.0: A Promising New ADAS in Market
Connected Car Sales Grew 12% YoY in 2022 With Volkswagen Group in Lead
Price Cuts Boost Tesla Revenue in Q1, Profit Slumps Compared to 2022
EV Sales in US up 54.5% YoY in 2022; Tesla Market Share at 50.5%

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Wearables Q2 2032

Published Date: 24th July 2023

Overview:This is a comprehensive analysis of the latest developments in the wearables industry covering product reviews, market trends, and regional insights. It also includes the Sony WH-CH720N headphones, Apple’s Vision Pro, Meta’s Quest 3, smartwatch markets in China and India, MediaTek’s expansion, AR/VR value chain in China, Apple’s device ecosystem, and wearable innovations at MWC Barcelona 2023.

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Table of contents:

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Sony WH-CH720N Review: Good Sound, Effective ANC, Long Battery Life
Vision Pro, iOS 17, New Macs: Here’s Everything Announced at Apple WWDC 2023
Apple Thinking About the Next Decade & Beyond with Vision Pro Announcement
Quest 3 to Help Maintain Meta’s XR Dominance Even as Apple Entry Looms
China’s Q1 2023 Smartwatch Shipments Drop to Lowest in 12 Quarters
India Smartwatch Market’s 121% YoY Growth Restricts Global Decline to 1.5% in Q1 2023

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Global Outsourced Manufacturing Smartwatch Shipments Rose 15% YoY in H2 2022
MediaTek Analyst Summit: Focus on Widening Portfolio, Growth in US and Europe
Analysis of the AR/VR Value Chain in China: Is China at the forefront of the industry?
Apple’s Device Ecosystem Multiplies its Brand Strength and Stickiness
Wearable Innovations Stand out at MWC Barcelona, 2023

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Semiconductors Q2 2023

Published Date: 24th July 2023

Overview:这是一个行业的综合分析,encompassing topics like international policies affecting self-reliance plans, regulatory acts in the US, earnings of major players, semiconductor manufacturing in India, emerging technologies in the market, and key events shaping the industry’s future. It provides valuable insights for stakeholders seeking a concise overview of the semiconductor landscape.

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Exhaustive table of contents below:

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Will Japan Curbs Hit China Semiconductor Self-reliance Plans?
Will CHIPS Act Achieve US Goals?
UMC Q1 2023 Earnings: Weak Cyclical Recovery But 28nm Remains Resilient
STMicro Beats Q1 2023 Earnings Expectations Despite Chip Shortages
India’s Promising Semiconductor Manufacturing Trajectory
New Layer-1 Accelerator Cards Set To Boost Open RAN Market – Or Create More Lock-In?

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MediaTek Analyst Summit: Focus on Widening Portfolio, Growth in US and Europe
Neil Shah Joins as Vice-Chairman for IC 50 Committee
Arm Platform TCS23 Sets Benchmark to Power Advanced, Holistic Mobile Computing Experiences
BoM Analysis: Samsung Galaxy S23 Ultra Costs $469 to Make
COMPUTEX 2023: AI Solutions, Capabilities in Focus
Currency Fluctuation Limits Global Wafer Fab Equipment Revenue Growth to 9% YoY in 2022

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Note: The report comprises of carefully selected aggregated insights published by our analysts during Q2 2023. The data presented herein corresponds to the Q1 2023.

Smartphones Q2 2023

Published Date: 12th July 2023

Overview:This report provides a comprehensive analysis of the global smartphone market, covering various topics and regions gathered throughout Q2. It includes insights into consumer preferences, market trends, and key players. The report offers a broad perspective on the industry, exploring topics such as foldable smartphones, market strategies, display technologies, reviews of smartphone models and much more. This report serves as a valuable resource for industry stakeholders seeking a concise overview of the global smartphone market.

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Exhaustive table of contents below:

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Survey: 28% of US Smartphone Users Highly Likely to Opt for a Foldable as Next Purchase
OPPO’s LATAM Strategy is a Success So Far But Challenges Ahead
中国高端智能手机市场前景:明亮的福ture Ahead
Smartphone Displays Moving Towards ‘Brighter’ Future
OPPO Find X6 Pro Review: A Photographer’s Delight
Refurbished iPhone Volumes Grew 16% YoY Globally in 2022
China Smartphone Sales Fall 5% YoY in Q1 2023; Apple on Top With Highest Sales Share
India Smartphone Market Records Highest Ever Q1 Decline of 19%, 5G Smartphones Contribution at 43%
Global Smartphone Market Declines 14% YoY in Q1 2023; Apple Records Highest-Ever Q1 Share
Survey: 72% of Smartphone Users in India Experience Low-battery Anxiety
US Smartphone Shipments Decline in Q1 2023 Amid High Inflation, Inventory Correction; Apple Share Up
Europe Smartphone Shipments Dropped 23% YoY in Q1 2023; Market at Lowest Levels for Over a Decade
MEA Smartphone Shipments Fall to Lowest Q1 Level Since 2016

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LATAM Smartphone Shipments Fall 9.9% YoY in Q1 2023, But Most Leading Brands’ Volume, Share Increase
Apple Shines in a Declining Southeast Asia Smartphone Market
Transsion Updates – Full Year 2022
Festive Season Restricts Decline in Indonesia Smartphone Shipments to 8.1% YoY in Q1 2023
Colombia’s Q1 2023 Smartphone Shipments Hit Three-year Low
Vietnam’s Smartphone Market Drops 30% in Q1 2023, Biggest Q1 Decline Ever
Philippines Smartphone Shipments Fall 9% YoY in Q1 2023; realme Leads
Strategy Trumps Sentiment as OEMs Skip Canada for New Feature Launches
Apple Thinking About the Next Decade & Beyond with Vision Pro Announcement
HONOR Bucks Market Trend With Fast Overseas Expansion
Share of OLED Smartphones at Record High
China’s <$150 Smartphone Market Posts Surprising Surge in Q1 2023
Ecuador Smartphone Shipments Up 18% YoY in Q1 2023; Xiaomi Takes Top Spot

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Note: The report comprises of carefully selected aggregated insights published by our analysts during Q2 2023. The data presented herein corresponds to the Q1 2023.

Weekly Newsletter
July 27, 2023
When Will Foldables Shipments Hit 100m?

READ HERE

MediaTek to Focus on Automotive, Edge AI for Growth

The company saw a slight growth in Q2 revenues due to the improving demand for 5G SoCs.
Inventory came down to a relatively normal level.
MediaTek and NVIDIA have tied up to develop a full-scale product roadmap for the automotive industry.
Significant revenues are expected to be seen for MediaTek’s auto and custom ASIC segments from 2026.

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MediaTek’srevenues were slightly up sequentially but down 43% annually in Q2 2023. Inventory has gradually come down to a relatively normal level, but the demand forsmartphoneswill remain slow due to the global macroeconomic situation and therefurbished smartphonemarket. Against this backdrop, MediaTek is diversifying its portfolio by focusing on theauto, smart edge and customASIC segments. The company is estimated to take over two years to get material revenues from these segments.

AI and ASIC Opportunity

CEO:“As for ASIC, we recently see growing enterprise ASIC business opportunities in AI and datacenter markets. With our strong IP and SoC integration capabilities, we aim to continue to grow this business in the future.”

Parv Sharma’s analyst take: “With the growth in generative AI, the demand for edge AI processing has accelerated. Being one of the top players in edge devices, MediaTek is well-positioned to benefit from this shift. The company will focus on winning enterprise ASIC projects but catching up with major players like Broadcom and Marvell will take time, as customers typically work with existing suppliers for repeat projects.”

Growing focus on auto and partnership with NVIDIA

CEO:“We’re very excited about the recently announced partnership between MediaTek and NVIDIA to develop a full-scale product roadmap for the automotive industry. We believe our industry-leading low-power processors and 5G, WiFi connectivity solutions, combined with NVIDIA’s strong capability in software and AI cloud, will help us become highly competitive in the future connected software-defined vehicles market and shorten our time to market to accelerate our growth.”

Shivani Parashar’s analyst take: “MediaTek launched Dimensity Auto to focus on cockpit and connectivity solutions. With its partnership with NVIDIA, the company aims to develop a full-scale product roadmap for the automotive industry. Auto design cycles are long so it will take some time (2026-2027) for the company to increase revenues from this segment. Overall, we can say the auto segment will become a long-term revenue growth driver for MediaTek.”

Customer and channel inventories come down

CEO:“We observed that customer and channel inventories across major applications have gradually reduced to a relatively normal level. Recent demand from our customers has shown certain level of stabilization. However, our customers are still managing their inventory cautiously as global consumer electronics end market demand remains soft. For the near-term, we expect our business to gradually improve in the second half of the year”

Shivani Parashar’s analyst take: “According to our supply chain checks, inventory levels are coming down and will get back to normal in the second half of 2023. OEMs will start restocking but will be cautious due to weak consumer demand and global macroeconomic conditions.” Result summary

Slight improvement in revenues: MediaTek recorded$3.2 billionin revenues in Q2 2023, a slight increase of 2% QoQ but a decrease of43% YoYdue to the weakglobal demandfor end products and the second-hand smartphone market. Customer and channel inventories across major applications have come down to a relatively normal level.
Maintained mobile segment revenue due to 5G SoCs:The mobile phonesegment contributed 46% to the company’s revenue in Q2 2023, which declined by51%YoY and increased by 2% QoQ. The demand for 5G SoCs improved during the quarter. The new flagship Dimensity SoC will be launched in the coming month.
New opportunities for smart edge:The smart edge segment contributed 47% to the company’s revenue in Q2, growing 2% sequentially. The demand for connectivity remained stable in the quarter. Business opportunities are growing for the ASIC segment.
Price discipline: MediaTek will focus on maintaining gross margin, following price discipline at a time of uncertainty in the global semiconductor industry.
Favorable guidance: MediaTek guided Q3 revenues in the range of$3.3 to $3.5 billion按顺序,增长4% - -11%。毛利率是expected to be around47%while the operating expense ratio is expected to be around 32% in Q2 2023. The smartphone, connectivity and PMIC segments will see revenue growth. The smart TV segment will witness declining revenues in the third quarter due to excess inventory.
Autosegment is picking up:Automotive将提供$200 to $300million to MediaTek’s revenue in 2023. More significant revenue can be seen from 2026. The current auto design pipeline revenue for MediaTek is over $1 billion.

Related posts

TSMC Bullish on AI in Long Term

Weaker-than-expected macroeconomicsituationcontinuedto weigh on TSMC’sQ2 2023 business performance.Muted smartphone and PC/NB demand negatively impactedtheoverall utilization rateduring the quarter.Though largely expected by the market, the company further cut its full–year revenue guidance ontheweaker end demandexpected forH2 2023.However,TSMCprojects astrong AI demand inQ32023and,going forward,sees itself asthe key enablerfor AI GPUsandASICs that requirealarge diesize.We give ourtakeson the key points discussed during theearnings call:

Is AI semiconductor demand real?

柴rman(Mark Liu):Neither can we predict the near future, meaning next year, how the sudden demand will continue or will flatten out. However, our model is based on the data center structure. We assume a certain percentage of the data center processors areAIprocessors and based on that, we calculate the AI processor demand. And this model is yet to be fitted to the practical data later on. But in general, I think the trend of a big portion of data center processors will be AI processors is a sure thing. And will it cannibalize the data center processors? In the short term, when thecapexof the cloud service providers is fixed, yes, it will. It is. But as for the long term, when their data service – when the cloud services have the generative AI service revenue, I think they will increase the capex. That should be consistent with the long-term AI processor demand. And I mean the capex will increase because of the generative AI services.
Adam Chang’sanalyst take:Supply chain checks reveal that cloud service providers such as Microsoft, Google, and Amazon aggressively invest in AI servers.NVIDIAis continuing to add orders for the A100 and H100 to the supply chain, echoing the strong momentum for AI demand. TSMC holds a significant market share in AI semiconductorwaferproduction, mitigating the risk of misjudging CoWoS capacity expansion concerning AI demand.
Akshara Bassi’s analyst take:Over the medium term, as hyperscalers continue to develop their own proprietary AI models and look to monetize through AI-as-a-Service and simiilar models, the infrastructure demand should remain robust.

Can AI semiconductor demand offset short-term macro weakness?

CEO (Che-Chia Wei):Three months ago, we were probably more optimistic, but now it’s not. Also, for example, China economy’s recovery is actually also weaker than we thought. And so, the end market demand actually did not grow as we expected. So put all together, even if we have a very good AIprocessordemand, it’s still not enough to offset all those kinds of macro impacts. So, now we expect the whole year will be -10% YoY.
Adam Chang’s analyst take:Although there is a lot of promise around AI, it would only account for around 6% of total revenues in 2023. Therefore,AIis not a panacea for broader short-term demand weakness.

Is TSMC CoWoScapacity enough to fulfill current AI demand?

CEO (Che-Chia Wei):For AI, right now, we see very strong demand, yes. For the front-end part, we don’t have any problem to support, but for the back end, the advanced packaging side, especially for the CoWoS, we do have some very tight capacity to — very hard to fulfill 100% of what customers needed. So, we are working with customers for the short term to help them to fulfill the demand, but we are increasing our capacity as quickly as possible. And we expect these tightening will be released next year, probably toward the end of next year. Roughly probably 2x of the capacity will be added.
Adam Chang’s analyst take:Due to TSMC’s CoWoS capacity constraints, the company is finding it challenging to fulfill the strong AI demand from customers,, including NVIDIA,Broadcom, and Xilinx, at the moment. NVIDIA is actively seeking second- source suppliers asTSMClooks to outsource some of its production.

N3E/N3/N2 status

CEO (Che-Chia Wei):N3 is already involved in production with good yield. We are seeing robust demand for N3 and we expect a strong ramp in the second half of this year, supported by both HPC and smartphone applications. N3 is expected to continue to contribute mid-single-digit percentage of our total wafer revenue in 2023. Our N2 technology development is progressing well and is on track for volume production in 2025. Our N2 will adopt a narrow sheet transistor structure to provide our customers with the best performance, cost, and technology maturity.
Adam Chang’s analyst take:Apple is the sole customer expected to adopt TSMC’s 3nm technology in its A17 Bionic and M3 chips during 2023. TheQualcommSnapdragon 8 Gen 4 processor is also anticipated to join the TSMC 3nm family (N3E) in 2024. Moreover, Intel is likely to adopt TSMC’s 3nm technology for its Arrow LakeCPU, scheduled to launch in H2 2024.

Results summary

Q2 2023resultsbeatslightly:TSMC reported $15.67 billion in sales, slightly above the midpoint of guidance. EPS beat consensus due to higher non-operating income. Both GPM and OPM slightly beat guidance thanks to favorable FX and cost control efforts.
Q3 2023guidance in line:The management guided $16.7-$5 billion (+9% QoQ at midpoint), gross margin in the range of 51.5%-53.5%, and operating margin in the range of 38%-40%. The gross margin dilution resulting from the N3 ramp-up would be 2-3 percentage points in Q3 2023 and 3-4 percentage points in Q4 2023. This impact would persist throughout the entire year of 2024, affecting the overall gross margin by 3-4 percentage points. Notably, this dilution is higher than the 2-3 percentage points gross margin dilution experienced during the N5’s second year of mass production in 2021.
2023revenue guidance revised down but expected:TSMC revised down the full-year revenue guidance to -10% YoY. The management sees weaker-than-expected macroeconomics in H2 2023 affecting the demand for all applications except for AI.
Strong AIdemand, 50% revenue CAGR forecast:AI revenue currently makes up 6% of TSMC’s total revenue. The company anticipates a remarkable compound annual growth rate (CAGR) of nearly 50% from 2022 to 2027 in the AI sector. As a result of this significant growth, the AI revenue percentage share in TSMC’s total revenue is projected to reach the low teens by 2027.
CoWoScapacity expected to double by 2024 end:TSMC is experiencing strong demand in the AI sector, with sufficient capacity for the front-end part but facing challenges in advanced packaging, particularly CoWoS.It is working with customers to meet demand in the short term while rapidly increasing capacity which it expects to double by the end of 2024, easing the current tightness.

ABF Substrate Demand Likely to Recover in H2 2023, BT Substrate Demand to Remain Weak

ABF substrate demand is expected to recover gradually in H2 2023, supported by improvingPC/NBinventory and increasing shipments of newserver CPU platformsby Intel and AMD.
AIand advanced packaging technologies serve as long-term growth drivers for high-end ABF substrate demand, but oversupply in the low-to-mid-end ABF substrate market is still a concern.
BT substrate demand still suffers due to the limited visibility on smartphone recovery, but early signs of bottoming out are emerging.

The disappointing Q1 2023 results of Taiwan’s IC substrate makers including Unimicron, Kinsus and Nanya PCB indicate that the cyclical downturn is worse than expected and is likely to continue to weigh on IC substrate makers’ Q2 2023 performance. However, Q2 2023 or Q3 2023 may mark a trough for the IC substrate sector.

ABF substrate demand likely to recover gradually in H2 2023

After severe inventory corrections across several end applications such as PC/NB and server segments since H2 2022, the improvement in PC/NB and server inventory will help boost ABF substrate demand, narrowing the demand-supply gap of ABF substrates in H2 2023. Three Taiwanesesubstratevendors have guided that the overall ABF substrate utilization rate will continue to trend down in Q2 2023. However, Unimicron expects to see an improvement in utilization rate towards the end of Q2 2023, which we believe will be mainly driven by the high-end substrate products used for Intel’s Sapphire Rapids and AMD’s Epyc Genoa.

Oversupply in low-to-mid-end ABF substrate market remains a concern

NVIDIA’s A100 and H100 both utilize TSMC’s CoWoS advanced packaging technology. The ABF substrate size for data center GPUs is larger with higher layer counts, driving long-term demand growth for high-end ABF substrates. However, the demand for ABF substrates from data center GPUs accounts for only a low-single-digit percentage of the total ABF substrate demand. Therefore, the contribution from AI/HPC applications will not be significant in the short term. On the other hand, global leading ABF substrate suppliers such as Ibiden and Unimicron are continuously expanding their ABF substrate capacity, raising concerns about long-term oversupply in the low-to-mid-end ABF substrate market.

BT substrate market: Early signs of bottoming out are visible

Most of the BT substrate demand comes from smartphone and memory applications. However, the demand has been weak after the smartphone and memory market entered an inventory correction phase in 2022. Starting in Q4 2022, there have been signs of improving demand from certain end applications like TV SoCs, driven by rush orders. On the smartphone side, demand remains weak due to a slower-than-expected recovery inChina’s smartphonemarket, particularly for Android smartphones. This is evident from the increased inventory days of companies likeMediaTekandQualcommin Q1 2023. The ongoing smartphone inventory correction is expected to continue for some more time. We will have to wait until at least late Q4 2023 for a recovery in smartphone demand to positively impact BT substrate demand.

Currency Fluctuation Limits Global Wafer Fab Equipment Revenue Growth to 9% YoY in 2022

Wafer fab equipment manufacturers’ net revenue increased to a record $120 billion.
The top five suppliers’ systems and service revenue increased to a record $95 billion.
The WFE market’s total revenue is expected to decline 10% YoY in 2023.
EUV lithography outlook remains strong despite weaker WFE outlook.
Weakness in wafer fab equipment spending in 2023will drive lead time normalization.

San Jose, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – June 12, 2023

Wafer fab equipment (WFE) manufacturers’ revenue increased 9% YoY to a record $120 billion in 2022 despite themacroeconomicslowdown, currency fluctuations, component shortages and logistics disruptions. The increase was due to continued strength in investments by customers for both leading and mature node devices across segments, includingIoT,AI, HPC,automotiveand5G. The top five suppliers’ systems and service revenue increased to a record $95 billion.

TheWFE市场的再保险venue is expected to decline 10% YoY in 2023 to $108.45 billion after three consecutive years of growth. Despite a weakerWFEbackdrop for 2023, theEUVlithography outlook remains strong due to the continued penetration of EUV into memory and logic, and foundries ramping up production of 3nm process nodes by applying Gate-All-Around transistor and FinFET architectures with increased EUV technology adoption.

Associate Director Dale Gaisaid, “During the past six months,TSMChas pushed out new capacities in 7/6nm and 5/4nm in the light of weaker market demand, while the capital spending on 3nm remains nearly the same as it planned at the beginning of 2023.”

Source:Wafer Fab Equipment Revenue Tracker, Counterpoint Research

Commenting on the WFE market,Senior Analyst Ashwath Raosaid, “The size of the WFE market in US dollar terms contracted by more than 8% in 2022 due to the impact of currency fluctuations, especially depreciation in the yen and euro-denominated sales since the beginning of 2022. Increased R&D spending in 2022 ahead of the inflection positions the WFE market to outperform the semiconductor market in the long term as these new technologies transition to volume manufacturing.”

Commenting on the market dynamics playing out in 2023, Rao said, “Manufacturers are more skewed towards foundry-logic segments today unlike in 2019, and with overall backlog strength, increased visibility in terms of long-term agreements and subscription model will help limit the downside. The weakness in wafer fab equipment spending in 2023 will drive lead time and inventory normalization. The slowdown in memory-oriented investments will begin to recover gradually starting in the second half of 2023, and 2024 will be a big year for the equipment industry. Manufacturers are well positioned to take advantage of the opportunity.”

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Ashwath Rao

Dale Gai

Neil Shah

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BoM Analysis: Samsung Galaxy S23 Ultra Costs $469 to Make

Qualcomm takes the top spot in terms of cost contribution, accounting for over 34% of the model’s BoM cost.
Qualcomm and Samsung combined contribute more than 65% of the component cost in the Galaxy S23 Ultra.
Featuring Qualcomm’s custom Snapdragon chipset, Samsung’s Galaxy S23 Ultra makes a considerable leap in computing performance with its shift to TSMC’s 4nm process node.

Producing an 8GB+256GB Galaxy S23 Ultra (Sub-6GHz) variant costs Samsung around $469, according to the latest bill of materials (BoM) analysis by Counterpoint’s component research service. The major components driving cost in thesmartphoneare the SoC, display and camera subsystem. Due to excess inventory and supply, components related to theRF sub-systemand memory were subjected to a cost decrease.

Qualcomm and Samsung’s design wins

TheS23 Ultrafurther builds upon Qualcomm’s design, showcasing a customized version of the Snapdragon 8 Gen 2 chipset, manufactured onTSMC’s 4nm process node. Samsung has chosenQualcomm chipsetsdue to enhanced cellular support, increased performance gain from both the CPU and GPU, and better battery life. The GPU also has support for raytracing and has gained a slight uplift of 39MHz clock speed.

Qualcomm’s share in the S23 Ultra has increased to an all-time high after attaining design wins for the fingerprint sensor IC, key power management ICs, audio codec,RFpower amplifiers, Wi-Fi + Bluetooth, GPS and Sub-6GHz transceiver.

Samsung is the second largest beneficiary. It is an exclusive supplier of the 256GBNAND flashand the 6.8-inch AMOLED display for the S23 Ultra. Thedisplaycan sustain 1750 nits of peak brightness and has a resolution of 1440 x 3088 pixels that allows the users to view pictures and videos in sharp detail. The 120Hz LTPO panel also supports adaptive refresh rate.

In thecamera sub-system, the design wins are shared between Samsung (SEMCO) and Sony. Samsung provides the 200MP wide-angle camera (S5KHP2) and the 12MP selfie camera (S5K3LU), while Sony offers the 12MP Ultrawide (IMX564), 10MP Telephoto and Periscope Telephoto (IMX754) sensors.

Other component suppliers

Silicon Mitus and Maxim are the providers of power management ICs that support the regulation of power for display and other key components.

For sensing components,STMhas registered design wins related to the laser autofocus module, accelerometer, gyroscope, barometer, and touch panel controller. The battery is packaged by Samsung and the cell is provided by ATL. The quick charging IC, which charges up to 45W, is sourced fromNXPwhile the 15W wireless charging IC is from Convenient Power.

Samsung’ssourcing strategyand choice of components are enabling the brand to have a competitive edge in terms of cost efficiency.

For detailed component and pricing analyses, queries, or for acquiring this research, contactinfo@www.arena-ruc.com

Arm Platform TCS23 Sets Benchmark to Power Advanced, Holistic Mobile Computing Experiences

Arm globally unveiled its Total Compute Solutions 2023 (TCS23) platform at the Computex 2023 expo in Taipei.
TCS23 will power the next-generation secure, intelligent (AI) and immersive (3D visual) experiences.
Arm continues to innovate across the stack to power visual computing applications designed for 3nm nodes and supported by advanced software and toolsets.
The next two years are going to be super-crucial for Arm as it pivots to a newer licensing model.

Leading mobile computing SoC architecture companyArmglobally unveiled its Total Compute Solutions 2023 (TCS23) platform at the Computex 2023 expo, being held in Taipei from May 30 to June 2. The latest generation of TCS will power the next-generation secure, intelligent (AI) and immersive (3D visual) experiences.

Arm commenced the TCS journey in 2021 with a focus on three key aspects of SoC design –ComputePerformance,SecurityandSoftware(DeveloperAccess). This complete package helps an SoC designer to integrate Arm IP offerings across CPU, GPU and System IP (Interconnect, SLCs, MMUs) to reduce complexity, costs and time to market.

TCS23 brings optimized physical IP, new GPU and advanced software tools

Arm continues to innovate across the stack, from its Physical/Pop IP, CoreLink System IP, ARMv9 architecture CPU cluster (Cortex-X4, -A720 and -A520) to new architecture-driven 5^thGen GPU (Immortalis-G720), to power visual computing applications designed for 3nm nodes and supported by advanced software and toolsets.

Source: Arm

CPU advancements

TheARM v9.2 Cortexcluster aims to deliver adouble-digit performance boostwithCortex-X4(+15%) atlesspower(40% lower) compared to the previous generation on the same process node.
Many of the futurepremium Androidsolutions will be powered by theadvanced 3nmprocess node in the coming years, which will further benefit from the TCS23 and beyond cluster advancements.
According to Counterpoint’s foundry tracker, almosta third of the foundry smartphone AP/SoC wafer revenuesin 2024 will come from the3nm processnode

See here:

Arm also announced thetapingout of the upcomingCortex-X4on theTSMCN3Eprocess, an industry first.

The newDynamicIQ Shared Unt (DSU-120)overall drives the demandingmulti-threadedperformance scaling across multiple computing devices, from smartphones and wearables to STBs to PCs, and for all premium, performance and efficiency use cases.
Further, TCS23 is also designed to accelerate machine learning (ML) and AI workload performance ranging from 12%+ depending on the CPU core type.

System IP and GPU advancements

The new innovations across the CoreLink CI-700 help reduce the silicon areas with a significantreduction in system interconnect latency.
Arm is also promising optimizations to drive improved latency and bandwidth reduction. Almost30% DRAM bandwidth/frame traffic reductionis expected,这意味着降低功率,伟大的游戏吗workloads.
These efficiency optimizations are possible with the new 5^thgen GPU architecture-basedImmortalis-G720featuringdeferred vertex shading (DVS).
Almost4x AI and ML performanceboost can be achieved as well by leveraging the new GPU.

Security and software advancements

Arm continues to innovate onsecurityacrossfirmware,processandTEE.
TheMemory Tagging Extension(MTE)capability increases memory safety from unsafe coded apps which normally comprise almost75% of Android vulnerabilities.
Arm extends support for the Android Virtualization Framework (AVF) for secure execution of codes for 64-bit-based devices.
Newer algorithms such as QARMA3 and enhancements for Pointer Authentication (PAC) and Branch Target Identification (BTI) reduce the overheads for maintaining security performance across the cluster.
The9 million app developersArm enables continue to build applications for the64-bit architecture. For example, theChina ecosystemof app developers is100% compliant with 64-bit.
Arm NN and Arm Compute Library offer optimization forML workloadson Armv9 architecture, which is being used by Google apps on Android with over100 millionactive users already.

Roadmap, ecosystem traction and outlook

Arm’s TCS24 will sport a Blackhawk premium core, Chaberton high-performance core, Hayes high-efficiency core and Krake GPU.

Source: Arm

Arm’s overall ecosystem is the broadest and deepest considering its leading position in low-power architecture.
Arm’s partnerships for TCS23 have mainly targeted Android-based computing devices and future Windows on Arm PCs

Source: Arm, Counterpoint Analysis

Arm’s tighterGoogle(Android)partnershipis key to the development and success of TCS spanning from overallSoC-Android optimizationsto building robustsecurityfeatures toAI/ML optimizationsand more.
MediaTekandTSMCremain the key fabless and fab partners for Arm and key drivers for TCS.
MediaTek’sentry and growth in thepremium smartphone segmentisgreatnews forArmfrom the TCS adoption perspective.

See here:

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MediaTek’sDimensity 9200/9200+was a great showcase forTCS22. The upcomingDimensity 9300is touted to sportfour Cortex-X4and four Cortex-A720 cores leveraging theTCS23platform.
Arm has also seen great traction for TCS in theChinese ecosystem of OEMsandapp developersleveraging premium MediaTek solutions.
Samsungis another great customer/partner for Arm. It continues tograpple with its overall Exynos SoCstrategy and performance and it remains to be seen how it leverages TCS23 or TCS24 for its future roadmap.
Unlike TSMC, theSamsung LSIis not on top of the list of announcements as a key Arm partner for Cortex-X4 tapeouts on its 3nm nodes. This casts some shadow on the adoption of TCS23 bySamsungExynosorGoogleTensorin near-to- mid term.
WhileQualcommandApplewill benefit from the new Armv9.2 cluster and system IP enhancements, they have tons of proprietary CPU customizations and in-house GPU designs and AI engines to completely leverage TCS23.
This is one of the reasons why there has beenno direct endorsementfromQualcommorApplefor the new clusters or overall TCS23 at launch.
Arm-based PCsis another area that has potential for growth mainly driven byApple,QualcommandMediaTek.

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Thenext two yearsare going to besuper-crucial for Armas itpivots to a newer licensing model. Licensing opportunities for chipsets, especially in smartphones and PCs, have been shrinking with more vertical integration at its licensees, so the pivot makes sense but will have to wait and see.

Overall, theend-to-end system optimization provided by TCS23with enhancements across hardware and software unlocks performance and efficiencies to power future mobile computing experiences.Armremains alinchpinandTCS a foundational platformfor the industry to build onlow-power but high-performance computing experiences.

Global Semiconductor Foundry Market Share: By Quarter

Global Semiconductor Foundry Revenue Share: Q1 2023

Published Date: May 11, 2023

This page shows thequarterly revenue sharefor the top players in the global semiconductor foundry market from Q3 2021 to Q1 2023.

Global Semiconductor Foundry Revenue Share (%)	Q3 2021	Q4 2021	Q1 2022	Q2 2022	Q3 2022	Q4 2022	Q1 2023
TSMC	55%	53%	54%	56%	59%	59%	59%
Samsung Foundry*	15%	16%	15%	13%	12%	13%	13%
GlobalFoundries	6%	6%	6%	6%	6%	6%	7%
UMC	7%	7%	7%	8%	7%	7%	6%
SMIC	5%	5%	6%	6%	6%	5%	5%
Others	12%	12%	12%	11%	10%	10%	10%

(*)Samsung includes foundry service for its internal logic IC business

This page provides a view on the global foundries revenue share from 2021 till 2023. Here are some highlights from Q1 2023:

Inventory correction in PC, smartphone, and consumer applications keeps weighing on the near-term performance and may continue in Q3 2023.
Automotiveapplications posted growth in Q1 2023 but may see softness in H2 2023.
TSMC is positive on long-term trend inAIapplications although the revenue contribution is still too low to offset smartphone and PC weakness now.
The recovery in H2 2023 should be mild. The overall utilization rate may bottom in Q2 2023.

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Read our foundry quarterly report for Q1 2023here.

For detailed insights on the data, please reach out to us atsales(at)www.arena-ruc.com. If you are a member of the press, please contact us atpress(at)www.arena-ruc.comfor any media enquiries.

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Infographic: Semiconductors Top 7 in Q2 2023

Infographic: Global Smartphone AP Share in Q2 2023

Global Smartphone AP Market Share by Shipments

Global Smartphone AP Market Share by Revenue

信息图:铸造在2023年第二季度收入份额

Foundry Companies’ Share by Revenue

Foundry Industry Share by Technology Node

Counterpoint Quarterly

IoT Q2 2023

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