Taiwan, United States, semiconductor shortages, semiconductor, Taiwan Semiconductor Manufacturing Co, Samsung Electronics, SK Hynix, President Moon Jae-in, Intel Corp, ASML chief executive Peter Wennink, TSMC chief executive C C Wei, US Commerce Secretary Gina Raimondo

Chip makers from Taiwan to the United States are cranking up production to address semiconductor shortages that have hammered carmakers and other customers, as they try to emerge from the coronavirus pandemic.

Now that unprecedented surge in investment is fuelling fears the semiconductor industry will overshoot, adding so much capacity in the years ahead as demand subsides that profits will take a hit.

In the latest sign of concern over demand, Texas Instruments (TI), one of the largest makers of chips, warned that revenue for the third quarter could fall short of some analysts’ estimates. Sales will be US$4.4 billion to US$4.76 billion in the period ending in September, the company said, compared with analysts’ prediction of US$4.59 billion. The company’s shares fell about 4 per cent in extended trading.

The forecast was particularly puzzling because it came after TI, the world’s largest maker of analogue and embedded processors, reported a 41 per cent surge in second-quarter revenue. It led to a barrage of questions from analysts on why the company is not more optimistic and whether we are seeing the first signs of a slowdown in the notoriously cyclical industry.

Taiwan, United States, semiconductor shortages, semiconductor, Taiwan Semiconductor Manufacturing Co, Samsung Electronics, SK Hynix, President Moon Jae-in, Intel Corp, ASML chief executive Peter Wennink, TSMC chief executive C C Wei, US Commerce Secretary Gina Raimondo

The entrance to US chip maker Texas Instruments’ plant in Richardson, Texas, is seen on June 9, 2021. Photo: TNS

Management cautioned that TI could not anticipate whether demand is peaking or whether growth at the current levels is sustainable.

“Our job isn’t to predict the future, it’s to prepare the company so we can handle anything and we’ve done that,” chief financial officer Rafael Lizardi said in an interview. “Some would argue that this time it’s different, but that’s a dangerous argument.”

Like other chip makers, TI has posted multiple quarters of double-digit percentage revenue growth, boosted by demand for a wide variety of devices that contain its tiny electronic components. The rapid run-up has caused speculation among analysts and investors that some of the orders reflect panic buying by customers who have grown anxious they will not be able get enough supply. Such behaviour in the past has caused crashes.

“TI posted yet another puzzling earnings report,” said Raymond James analyst Chris Caso in a note after the earnings report. “Revenue for the quarter significantly beat guidance, but it guided revenue flat, without much explanation for the conservative guidance.”

Caso indicated that “management likely suffers from a lack of confidence at the macro level, despite what clearly continues to be tight supply conditions at both TI and the semiconductor industry at large”

Lead times, the gap between ordering a semiconductor and taking delivery, increased to 19.3 weeks in June, a week and a half longer than in May, according to research from Susquehanna Financial Group. That gap, already the longest wait time since the firm began tracking the data in 2017, is now more than five weeks longer than the previous peak in 2018.

TI itself said the amount of in-house inventory fell to 111 days in the quarter, well short of the 130 to 190 days the company likes to have on hand. The company’s lead times have stretched for an increasing number of products.

The entire chip industry is cranking up investments to meet the surging demand.

Taiwan Semiconductor Manufacturing Co (TSMC), the world’s top chip maker, has pledged to invest US$100 billion over three years, including in a new fabrication plant in the US.

South Korea’s Samsung Electronics and SK Hynix will lead more than 510 trillion won (US$442 billion) of investment in semiconductor research and production in the years to 2030 under a national blueprint devised by President Moon Jae-in’s administration.

Taiwan, United States, semiconductor shortages, semiconductor, Taiwan Semiconductor Manufacturing Co, Samsung Electronics, SK Hynix, President Moon Jae-in, Intel Corp, ASML chief executive Peter Wennink, TSMC chief executive C C Wei, US Commerce Secretary Gina Raimondo

Employees of ASML are seen working on the final assembly of the company’s Twinscan NXE: 3400B extreme ultraviolet semiconductor lithography equipment, with its panels removed, in Veldhoven, the Netherlands. Photo: Reuters

Senior industry executives, such as Intel Corp chief executive Pat Gelsinger, have predicted long-term growth for the industry at well above historical levels. They argue that chips are simply in more devices that never needed them and that will mitigate some of the historical slumps when the industry primarily supplied the computer and mobile phone industries.

This week, ASML Holding, the leading provider of equipment to make chips, said orders for machines that make high-end semiconductors rose to a record as TSMC and Samsung get in line for key machinery. That gear, however, will not be producing chips until next year, at the earliest.

ASML chief executive Peter Wennink said the ongoing efforts by several governments to build chip capacity at home will boost orders for semiconductor equipment.

Taiwan, United States, semiconductor shortages, semiconductor, Taiwan Semiconductor Manufacturing Co, Samsung Electronics, SK Hynix, President Moon Jae-in, Intel Corp, ASML chief executive Peter Wennink, TSMC chief executive C C Wei, US Commerce Secretary Gina Raimondo

US Secretary of Commerce Gina Raimondo says there are improvements in the supply of chips to carmakers and other sectors. Photo: Reuters

The company has historically underestimated how quickly the industry would grow in the past 15 years and Wennink said it is working to boost manufacturing to keep up.

TSMC chief executive C C Wei said in an earnings call last week that he expects the company’s capacity to remain tight throughout this year and into 2022.

There are signs the shortages are easing.

This year, US Commerce Secretary Gina Raimondo brokered meetings between semiconductor manufacturers, their suppliers and their customers including carmakers. She said this week there are improvements and that companies such as Ford Motor Co and General Motors Co are getting “a bit more of what they need”.


Japan travel news, japan travel guides, japan holiday destinations and japan reviews

LATEST NEWS

‘Made in China, sold on Amazon’ merchants scramble to minimise losses after US platform closes over 50,000 Chinese shops

Elon Musk says SpaceX owns bitcoin and Tesla may resume accepting the cryptocurrency when it’s more energy efficient

Forbes China names Alibaba founder Jack Ma country’s most generous entrepreneur in 2020, as tech giants top charity list

Beijing’s decision to block Tencent’s Douyu-Huya merger deal marks end of freewheeling internet era in China

ByteDance’s gaming chief sets out global ambition to rival Nintendo and Blizzard after US$4 billion Moonton deal

Beyond Meat opens JD.com store in e-commerce push to entice meat substitute-averse Chinese consumers

Trip.com ordered to make exception to privacy policy in lawsuit that could open the door to further legal action

TSMC says Nanjing wafer fab expansion plans on track as second quarter revenue surges 28 per cent

Elon Musk admits he uses his sense of humour to get free press for Tesla

UK probes Chinese takeover of Newport Wafer Fab, the country’s biggest chip plant

Huawei, Volkswagen supplier enter 4G licensing deal as US sanctions-hit telecoms giant widens business

China’s TikTok gets its own web version as user growth plateaus, nearing the country’s total mobile user base

Bitcoin crackdown sends graphics cards prices plummeting in China after Sichuan terminated mining operations

China’s new private tutoring regulatory watchdog is another blow to the industry amid ongoing crackdown

Google’s smartphone tie-up with Indian billionaire Ambani faces supply chain constraints and culture clashes

US-China tech war: American tech bill locks Huawei on Washington’s trade blacklist as the company plays up its cybersecurity credentials

NEWS RELATED

China semiconductors: Tsinghua Unigroup seeks white knight for massive bailout

Debt-ridden Tsinghua Unigroup, the former high-flying technology conglomerate affiliated with China’s top university, is seeking a massive bailout from deep-pocketed investors amid bankruptcy proceedings that could force the company to divest its semiconductor assets. Unigroup, saddled with more than 200 billion yuan (US$30.8 billion) in total liabilities, is looking for…

Read more: China semiconductors: Tsinghua Unigroup seeks white knight for massive bailout

Debt-saddled Tsinghua Unigroup to turn from top buyer to big seller of semiconductor assets

Tsinghua Unigroup, a technology conglomerate affiliated with China’s top university, is moving closer to bankruptcy restructuring after years of debt-fuelled acquisitions in the semiconductor industry, kicking off a potential scramble for its assets by creditors and other interested parties. Two Shenzhen-listed subsidiaries, information technology infrastructure provider Unisplendour Corp and integrated…

Read more: Debt-saddled Tsinghua Unigroup to turn from top buyer to big seller of semiconductor assets

Xiaomi surpasses Apple for the first time, becoming the world’s No 2 smartphone vendor as Huawei recedes

Chinese smartphone brand Xiaomi has surpassed Apple for the first time to become the world’s second-largest vendor by handset shipments in the second quarter, lifted by strong sales in Latin America, Africa and Europe, according to the latest numbers from research firm Canalys. The Beijing-based smartphone brand accounted for 17…

Read more: Xiaomi surpasses Apple for the first time, becoming the world’s No 2 smartphone vendor as Huawei recedes

Intel in talks to buy GlobalFoundries for US$30 billion as it looks to expand advanced chip manufacturing, report says

Intel Corp is in talks to buy semiconductor manufacturer GlobalFoundries Inc for about $30 billion, The Wall Street Journal reported on Thursday, citing people familiar with the matter. Any deal talks don’t appear to include GlobalFoundries directly, as a spokesperson for the company told the Journal it was not in…

Read more: Intel in talks to buy GlobalFoundries for US$30 billion as it looks to expand advanced chip manufacturing, report says

Samsung chooses FY21 as 1st year to avail 6% PLI incentives

Samsung Electronics, the only company to achieve production target for the handset production-linked incentive (PLI) scheme, has chosen FY20-21 as its first year to avail the 6% incentive, a person familiar with the matter said. “Samsung will take its incentives for the first year – FY20-21. It did all the…

Read more: Samsung chooses FY21 as 1st year to avail 6% PLI incentives

China’s chip imports soar in June as manufacturers build up supply amid global shortage

China’s semiconductor imports continued to grow at a fast clip in June, meeting the country’s huge demand for integrated circuits (ICs) used in the production of smartphones, cars, computers and home appliances amid a lingering global chip shortage. The world’s second-largest economy imported 51.9 billion semiconductor devices in June, the…

Read more: China’s chip imports soar in June as manufacturers build up supply amid global shortage

Suspicion of customs duty evasion: DRI carries out searches at Samsung offices

Directorate of Revenue Intelligence (DRI) officials carried out “searches” at offices of South Korean firm Samsung Electronics over suspected evasion of duty on import of network equipment, said people aware of the matter. “The searches began in the Delhi and Mumbai offices of Samsung on Wednesday,” one of the persons…

Read more: Suspicion of customs duty evasion: DRI carries out searches at Samsung offices

Next-gen chip tech could be unlocked with 3D packaging tools from 80-year-old Japanese company

One Japanese company that got its start making grinding wheels for machinery more than 80 years ago believes it holds the key to helping manufacturers create ever slimmer and more powerful semiconductors to power next-generation mobile phones and advanced computers. Disco Corp’s machines can grind a silicon wafer down to…

Read more: Next-gen chip tech could be unlocked with 3D packaging tools from 80-year-old Japanese company

Foxconn group firm says PLI scheme extension will help speed up business

Nvidia’s Arm takeover gets support from chip giants Broadcom, MediaTek and Marvell

Japan needs US$9 billion in chip investment this year to keep up with Taiwan and South Korea, adviser warns

HCL Tech appoints leadership team in South Korea, Vietnam & Taiwan

McDonald’s South Korea and Taiwan falls prey to data breach

McDonald’s South Korea and Taiwan falls prey to data breach

China must pursue chip assembly, packaging breakthroughs to catch up with semiconductor leaders, experts say

Ferrari turns to semiconductor company STMicroelectronics for its new CEO

OTHER NEWS