Semiconductor revenue grew 3.8% to USD124.3B in 2Q23; TSMC makes progress with Apple, Broadcom and Nvidia

After 5 straight quarters with declining revenue, the semiconductor industry reversed course and increased revenue in 2Q23 according to Omdia. The research noted quarterly revenue grew 3.8% to USD124.3B in this period. This growth is in line with historical patterns for the total semiconductor market, with 2Q23 revenue increasing on average of 3.4% from 1Q23 (using data from 2002 through 2022). However, growth within semiconductor segments continues to diverge from historical trends. For example, the DRAM market was up 15% in 2Q23 with the historical pattern of 7.5% in the second quarter. However, the toll of the shrinking market has reduced the current market considerably, with the semiconductor market by revenue now at 79% of what it was one year ago when total revenue was USD160B in 2Q22. It will take time to return to the revenue levels of late 2021. (Android Headlines, Omdia)

Encouraged by the American government, Taiwan Semiconductor Manufacturing Co (TSMC), is making its first factory in the US. Apple plans to buy chips from the Arizona factory. The plant will kick off production of chips by 2024. But things have not been going smoothly. Even when it is ready, the Arizona factory will reportedly not be able to produce finished chips. The chips that will be manufactured in the US will have to be sent to Taiwan for packaging. Packaging is the final process of chip fabrication and involves putting integrated circuits in a housing. The Arizona facility is apparently not equipped to package advanced chips, such as those used in the iPhone. As SemiAnalysis chief analyst Dylan Patel puts it, the Arizona factory is nothing more than a paperweight. (Apple Insider, The Information, 9to5Mac, Phone Arena, UDN, China Times)

TSMC has reportedly tapped two industry heavyweights to explore silicon photonics. TSMC has assembled a dedicated R&D team of approximately 200 experts, focusing on harnessing silicon photonics’s power for future chips. TSMC is allegedly in talks with major players like Broadcom and Nvidia to co-develop applications centered on the technology. This collaboration aims to produce next-generation chips with silicon photonics, and substantial orders are expected as early as 2H24. (CN Beta, Technode, Tom’s Hardware, WCCFTech, UDN, Asia Nikkei)

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