From 2017 to 2020, the global semiconductor industry has entered an unprecedented "turbulent world", because there have been great changes in technology, market, application, restructuring, supply chain, etc., and they have all been gathered in these 4 years.
First of all, in 2017 and 2018, the world entered the upward cycle of memory shortages and price increases, and the scale and amplitude reached historical highs; in 2019, a large area of "explosive products" represented by TWS Bluetooth chips and CMOS image sensors Covering the global market, there has been a serious shortage of supply, which has never been seen before. This has brought excellent opportunities for related chip companies, whether it is design or manufacturing, whether it is an established company or a new star in the market. In 2019 and 2020, after 2015 and 2016, the global semiconductor industry mergers and acquisitions have once again set off a climax. The total amount of funds involved (including those that have been initiated but not yet completed) M&A cases) even surpassed 2015 and 2016; after entering 2020, the unexpected epidemic in a century has caught the industry by surprise. I thought it was a recession for the whole year. Unexpectedly, the market rebounded rapidly in the second half of 2020. The industry seriously underestimated this rebound. Power, leading to large-scale chip shortages around the world.
In the past 4 years, in parallel with the above phenomenon, the semiconductor process has entered the 10nm era, and higher process level chips will be mass-produced every year. By 2021, the industry has entered the 3nm trial production stage.
All of the above happened in a short period of 4 years. This should be the first time in the history of semiconductors, and it is a period of great change. The steady development of the industry is more conducive to traditional enterprises, especially traditional leaders. Once there are major changes, latecomers will have the opportunity to catch up, especially the enterprises that were in the second and third positions in the industry. Possesses the objective conditions to draw closer, and even to overtake the leader. In fact, such things have indeed occurred in the past 4 years, and they have spread throughout all aspects of the industry chain, including IDM, IC design, foundry, and upstream semiconductor equipment.
Sony was forced to change
In 2019, with the popularity of multi-camera mobile phones, the global CMOS image sensor market exploded, and the supply of chips was severely in short supply. This created conditions for the industry's second brother Samsung to catch up with the overlord Sony, and the Huawei ban gave Samsung an assist.
According to data from Yole, Sony was affected by Huawei’s sales ban in 2020. Compared with a year ago, the market share of CMOS image sensors has declined. Although Sony still leads the market with US$20.7 billion, its market share is 40%. The share is lower than 42% in 2019. Samsung still ranks second, but its market share has increased from 21% in 2019 to 22%. Chinese manufacturer OmniVision (Howe Technology) also gained additional market share, with its market share climbing to 11%.
Figure 1: CMOS image sensor vendors by market share in 2019 and 2020 (Source: Yole)
In March of this year, the market research organization Strategy Analytics released data showing that in the smartphone CMOS image sensor market, Sony ranked first in the world with a market share of 46% in 2020, followed by Samsung and Howe Technology. The shares of the two companies are 29% and 10% respectively. Compared with the data in 2019, Sony's market share fell by 3.2 percentage points year-on-year, and Samsung's market share increased by 9.2 percentage points.
Samsung is pressing harder. In this case, in early June, the president of Sony Semiconductor Solutions, Shimizu, said frankly that due to changes in the market environment of the main smartphone business, the company’s return to profitability will be postponed to fiscal year 2022 (as of 2023). March). In fiscal 2020, Sony Group’s total revenue was 8,999.4 billion yen, an increase of 9% over the previous year. However, CMOS image sensor business revenue fell by 5% year-on-year, mainly due to the decrease in sales revenue of image sensors used in mobile products.
In order to ensure profits, Sony’s semiconductor business must increase the number of supplies and continue to increase the sales of high-value-added products. Therefore, Sony is actively seeking orders from Chinese mobile phone manufacturers such as Xiaomi and OV.
Sony Semiconductor President Shimizu said that for new customers, the company is advancing the development of fine pixel products and proposed the idea of accelerating the development of higher pixel sensors, because high pixels are easy to promote to consumers and are continuously being adopted in mid-priced mobile phones. .
However, the miniaturization technology required for high-pixel sensors is an area of advantage for Sony's competitor Samsung. Shimizu confessed that Sony lags behind Samsung in terms of high-resolution, and hopes to "add image signal processing technology accumulated through our superior "high-quality" to create new added value."
In addition, the popularity of autonomous driving has also allowed Sony to focus its attention on the automotive CMOS image sensor business. At present, Sony has established an automotive sensor business unit.
Data from Yole shows that in the first quarter of 2021, the impact of the epidemic on the relevant supply chain is weakened. Therefore, compared with the first quarter of 2020, the CMOS image sensor market has achieved a 7% growth. Yole estimates that the market size in 2021 will reach 21.4 billion US dollars, an increase of 3.2% over 2020, and there will be stronger growth in 2022 and 2023.
Such a growing market will provide more opportunities for chasers in the next few years. Samsung has a lot of opportunities and Sony is under great pressure.
Nvidia goes straight to Qualcomm
In mid-June, TrendForce's statistics showed that due to the tight foundry, IC design makers were encouraged to actively strive for wafer production capacity to meet the order demand for various terminal applications, thereby boosting the first quarter of 2021. Revenue performance of the world's top ten IC design vendors. Among them, Qualcomm's mobile phone division in the first quarter, along with the RF front-end, Internet of Things, and automotive divisions all showed growth performance, with revenue reaching 6.28 billion US dollars, an annual growth of 53.2%, ranking first in the world. The highlight is that NVIDIA, which ranks second, benefited from the market demand driven by cryptocurrency and the housing economy. The gaming graphics card sector has become the key to driving overall revenue. Together with the contribution of the data center sector, it has a $5.17 billion Revenue surpasses Broadcom.
In recent years, the top two on the list of global IC design vendors have always been Qualcomm and Broadcom, and Qualcomm has long been in the leading position. Broadcom only occasionally surpasses, and most of the time is second. This time, NVIDIA has come to the second position with its strong performance. It also reflects from one aspect that the changes and changes in technology and applications in the industry in recent years have had a greater impact on the market, thus enabling the design of corresponding chips. Of manufacturers have achieved a counterattack.
Specifically, Broadcom represents traditional technology and power, especially in network communications, which is Broadcom's strengths. In addition, it is the radio frequency chip and module, which is also the focus of its business. But these are all traditional. Relatively speaking, Nvidia's GPU is a fish in the water in terms of the combination of high-performance computing and AI, and this is the biggest market growth point in recent years. In addition, Nvidia's consumer GPU products have caught up with the market outbreak period after the epidemic in terms of game console applications, and the revenue is considerable.
In short, Broadcom is more like a representative of traditional technologies and application forces, while Nvidia is a representative of emerging technologies and applications. The momentum is getting stronger and stronger. If it were not for the large scale of the main battlefield of smartphones that Qualcomm is good at, it is estimated that Nvidia will not take long. It will achieve its transcendence.
At present, the IC design industry is also in a period of change. Nvidia has emerged as a new force. AMD’s rise is impressive, and the acquisition of Xilinx has further expanded its size. Under the combined effects of internal and external factors, the IC design industry may set off a wave of back waves in the future. . In addition, MediaTek's eye-catching performance in the mobile phone processor market once grabbed the limelight of Qualcomm, and it is also the hottest IC design company at the moment.
Under this circumstance, in the next few years, IC design will have a lot to watch.
UMC takes it to the next level
In the field of foundry, UMC has long been ranked fourth, and by the end of 2020, UMC has surpassed GF in one fell swoop and ranked third.
Figure 2: Revenue and ranking forecast of the world's top ten wafer foundries in the fourth quarter of 2020 (Source: Tuo Dai Industry Research Institute)
As far as pure wafer foundries are concerned, UMC is second only to TSMC. It can be said that the strong performance of UMC for more than a year is mainly due to the boom in the "explosive" market represented by CMOS image sensors and TWS Bluetooth chips, and the global chip shortage caused by the epidemic. Foundry manufacturers represented by TSMC and UMC ushered in the best performance growth period in history.
In the second half of 2020, UMC won the mature process orders of Qualcomm and Nvidia, and IDM giants such as Texas Instruments, STMicroelectronics and Sony continue to expand their orders, mainly using mature processes such as 28nm, 40nm or 55nm, and most of the products are analog chip.
In addition, the use of power management ICs in 5G mobile phones has increased by 3-4%, and the use of MOSFETs and power management ICs in notebook computers has increased by 2-3%. In addition, large-size panel driver ICs and low-pixel monitoring CMOS image sensors are in short supply, including TSMC. , UMC and other 8-inch foundry capacity will be in short supply in the second half of 2020.
Due to the continuous influx of foundry orders for driver ICs, PMICs (power management ICs), RF, and IoT applications, UMC’s 8-inch wafer production capacity is fully loaded, and the 28nm process continues to complete the customer’s design and finalization, and subsequent stable off-line production. In the fourth quarter, 28nm and below process revenue increased by 60% year-on-year, and overall revenue increased by 13% year-on-year.
This puts UMC's production capacity at full capacity, and its production capacity in the first half of 2021 has also been fully loaded. In fact, UMC's 8-inch wafer foundry capacity has been fully loaded until the second half of 2021. What followed was an increase in prices.
It can be seen that UMC has encountered a huge dividend period for industry development, and the demand for mature process chips in the market and related products has skyrocketed. And this situation is still going on. In the next few years, UMC, as the second brother of pure wafer foundry industry, will continue its upward momentum.
ASML "One Trick"
Regardless of the above companies, chips will eventually be implemented in the production process, and the global chip shortage has brought huge business opportunities to upstream semiconductor equipment manufacturers, especially the leading companies, which have attracted more attention.
In this wave of core shortages, both mature and advanced processes are included. In terms of advanced manufacturing processes, especially for nodes of 10nm and below, the requirements for equipment are very high, and the corresponding manufacturers are also relatively small. Especially for EUV equipment, only ASML can produce it, which provides huge business opportunities for it.
In the second half of 2020, well-known semiconductor industry analyst Robert Castellano said that Applied Materials will surpass ASML in 2020 and become the leader of semiconductor equipment again. According to Castellano's statistics in 2019, ASML surpassed applied materials in that year and topped the list of global semiconductor equipment manufacturers. Relying on its absolute strength in the EUV lithography machine market, ASML's revenue has gradually caught up with the traditional overlord application materials of semiconductor equipment in the past two years, resulting in a battle for the first name.
Applied Materials has long been the number one supplier of semiconductor equipment, relying on its comprehensive and powerful product line, especially the advanced equipment of semiconductor manufacturing with higher technology content, the company has a deep technical foundation.
As for ASML, according to Gartner’s statistics, the company’s share in the global lithography machine market exceeds 80%. In revenue, deep ultraviolet lithography (DUV) accounts for the highest proportion of 55%, but with TSMC’s 7nm+ and 5nm With the mass production of the process, the demand for EUV lithography machines has increased significantly.
Regarding EUV lithography machines, most of ASML's TWINSCAN NXE:3400B systems have been upgraded with productivity modules at the customer's site. ASML announced the final specifications of TWINSCAN NXE: 3600D, which is a new model on the EUV roadmap and plans to start shipping in mid-2021.
In 2020, ASML shipped more than 100 EUV equipment, and orders are still increasing.
Applied materials and ASML have a comprehensive balance and an absolute advantage. At the current industrial development node, ASML is growing faster. As Intel and Samsung continue to develop advanced manufacturing processes and strive to narrow the chip manufacturing technology gap with TSMC, the opportunities for ASML, the second brother of the semiconductor equipment industry, to further challenge the traditional hegemon in the next few years will continue to increase.
In addition to the above-mentioned examples of the booming performance of the second brother in various fields of semiconductors, and even the example of the counterattack leader, with the extraordinary popularity of the memory market in 2017 and 2018, Samsung's revenue in those two years surpassed Intel and became a global player. Semiconductor dominates, but as the global memory market returns to calm in 2019, Samsung has given up its leading position, and Intel is still the current industry dominance. Obviously, compared with the companies or technical fields mentioned above, Samsung's counterattack against Intel has a stronger chance.
Judging from the statistics of major market research institutions, in the next few years, most of the technologies or applications mentioned above will still maintain a good growth momentum. Therefore, they are still optimistic about the second brothers in these industries, and in some areas. The possibility of surpassing the traditional overlord and staying at the leading position has greatly increased.
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