Is demand reaching a turning point? 70% of Taiwan's top 10 semiconductor companies have seen a decline in performance

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IC Insights pointed out in a related report that, generally, the monthly revenue of semiconductor companies can provide an early indicator of the latest market conditions, indicating that the demand in the semiconductor market may change upward or downward.

It is widely rumored in the industry that overall demand in the semiconductor market is on a downward trend. What is the actual situation?

In the global semiconductor industry, most companies disclose sales performance on a quarterly basis, but many Taiwanese semiconductor companies disclose sales data on a monthly basis, with more detailed financial details. In addition, as a major player in the semiconductor industry, the performance of Taiwan's leading suppliers is a powerful reflection of the latest market supply and demand. This article will sort out the latest performance of Taiwan's top 10 semiconductor companies by sales for readers' reference.

According to IC Insights, among the latest disclosed June performance of Taiwan's semiconductor companies, the top ten are: TSMC, MediaTek, UMC, Realtek, Winbond, Novatek Technology, Powerchip Semiconductor, Vantage Semiconductor, Nanya Technology, and Macronix Electronics.

Image source: IC Insights

Overall, the sales of these 10 companies in June fell by 5% compared with May; specifically, compared with the sales data in May, 7 of them saw a decline in sales in June, with Novatek Technology having the largest decline of 26%; 3 companies saw an increase in sales, with Macronix Electronics seeing the largest increase of 10%. Due to their different segments and business focuses, the sales of each company are affected by the market in different ways. Analyzing the details one by one may reveal some new market trends.

Note: The month-on-month increase/decrease is based on the comparison of May revenue data

TSMC

June sales: NT$175.9 billion

Compared with last month's change: -5%

In early July, TSMC, the world's largest wafer foundry, announced that its June revenue was NT$175.874 billion (approximately RMB 39.6 billion), a decrease of 5.3% from May.

According to statistics, from January to June 2022, TSMC achieved a total operating income of NT$1,025.2 billion (approximately RMB 231 billion), a year-on-year increase of 39.6%. TSMC previously announced that it will hold a press conference on July 14 to announce the revenue situation for Q2 2022 and disclose the latest operating outlook.

TSMC's official website shows that the company was founded in 1987 and pioneered the business model of professional integrated circuit manufacturing services. Since then, it has become the world's leading professional integrated circuit manufacturing service company. Currently, TSMC's operations cover Asia, Europe and North America. In 2020, TSMC provides the widest range of advanced processes, special processes and advanced packaging, including 281 process technologies, and produces 11,617 different products for 510 customers.

Official website: https://www.tsmc.com/schinese

MediaTek

June sales: NT$51 billion

Compared with last month's change: -2%

MediaTek, a major mobile chip design company, also announced its June revenue a few days ago. MediaTek said its June revenue was NT$51 billion, down 2% from May . This is the third consecutive month that MediaTek has shown a downward trend in performance.

MediaTek's official website shows that MediaTek is the world's fourth largest fabless semiconductor design company, and is a leader in mobile terminals, smart home applications, wireless connection technology, and IoT products. Every year, about 2 billion terminal products equipped with MediaTek chips are launched globally.

Official website: https://www.mediatek.cn/

UMC

June sales: NT$24.8 billion

Compared with the previous month, the increase was 2%

In June, UMC achieved operating revenue of NT$24.8 billion (approximately RMB 5.6 billion), a year-on-year increase of 43.2% and a month-on-month increase of 1.61%.

From January to June, UMC achieved total operating revenue of NT$135.5 billion (approximately RMB 30.5 billion), a year-on-year increase of 39.6%.

According to the official website of UMC, UMC was founded in 1980. UMC's complete process technology and manufacturing solutions include logic/mixed signal, embedded high-voltage solutions, embedded non-volatile memory, RFSOI and BCD. UMC currently has 12 wafer fabs with a monthly production capacity of more than 750,000 eight-inch wafers. It currently has about 19,500 employees worldwide and has service locations in Taiwan, China, the United States, Europe, Japan, South Korea and Singapore.

Official website: https://www.umc.com/zh-CN/Home/Index

Realtek

June sales: NT$9.6 billion

Compared with last month's change: -8%

Realtek recently announced that its revenue for June was NT$9.641 billion, a 7.7% decrease from the previous month. Realtek Semiconductor pointed out that its second quarter performance still hit a record high.

According to Wikipedia, Realtek Semiconductor Co., Ltd. was founded in 1987 and is a Taiwanese semiconductor design company . In 2016, it was one of the top ten fabless IC suppliers in the world and the third largest IC design company in Taiwan . It is reported that Realtek's well-known products mainly include network communication chips, audio chips, screen control chips and wireless ultra-wideband chips.

Official website: https://www.realtek.com/zh/

Winbond

June sales: NT$8.9 billion

Change compared to last month: 1%

Winbond also announced that its June revenue was NT$8.903 billion; its second-quarter consolidated revenue was NT$26.646 billion, the same as the first quarter.

According to Winbond's official website, the company was founded in September 1987. The company's headquarters is located in the Central Taiwan Science Park, where it has a 12-inch highly intelligent and automated wafer fab.

Winbond Electronics is a professional memory integrated circuit company. From product design, technology research and development, wafer manufacturing to global marketing of its own brand, it is committed to providing global customers with a full range of niche memory solution services. Its core products include Code Storage Flash Memory, TrustME® secure flash memory, specialty DRAM and mobile DRAM. It is the only manufacturer in Taiwan that has both DRAM and Flash self-developed technologies.

Official website: https://www.winbond.com/hq/?__locale=zh

Novatek

June sales: NT$8.2 billion

Compared with the change in May: -26%

Novatek recently announced that its June revenue was NT$8.158 billion, down 25.72% from the previous month and 29.55% from the previous year. Its second quarter consolidated revenue was NT$31.461 billion, down 13.84% from the previous quarter and 7.77% from the previous year. Its cumulative revenue for the first half of the year was NT$67.973 billion, up 12.39% from the previous year.

It is understood that nearly 30% of Novatek's revenue comes from large-size driver ICs. Currently, due to the larger-than-expected inventory adjustment of panel customers and the decline in driver IC prices, Novatek's revenue in June hit a new low in 1.5 years, and its second-quarter revenue also failed to meet the target, but continued to hit a new high in the first half of the year. The announcement also mentioned that Novatek's SOC and driver IC businesses declined simultaneously in June, with SOC revenue of 2.485 billion yuan, a monthly decrease of 35.27%, and driver IC revenue of approximately 5.722 billion yuan, a monthly decrease of 21.2%.

Novatek's official website shows that the company is a leading IC design company in Taiwan, engaged in product design, R&D and sales. Its main products are a full range of flat-panel display screen driver ICs, as well as digital audio and video and multimedia single-chip product solutions for mobile devices and consumer electronic products.

Official website: https://www.novatek.com.tw/zh-CN/Home/Index

Powerchip

June sales: NT$7.1 billion

Compared with last month's change: -4%

Powerchip recently announced that its revenue for June was 7.104 billion yuan, a monthly decrease of 4%.

According to the official website of Powerchip Semiconductor, Powerchip Group completed its corporate restructuring in May 2019, with Powerchip Technology, a subsidiary of the company, transferring three 12-inch wafer fabs and related operations and assets to Powerchip Integrated Circuit Manufacturing Co., Ltd. (referred to as "Powerchip Semiconductor").

Currently, Powerchip Semiconductor has two 8-inch and three 12-inch wafer fabs and 6,900 employees. The company focuses on three major wafer foundry services: advanced memory chips, logic chips, and discrete components.

Official website: https://www.powerchip.com/index_cn.html

World Advanced

June sales: NT$5.5 billion

Change compared to last month: 3%

World Advanced Technology recently announced that its revenue in June was 5.495 billion yuan, a monthly increase of 3.3% and an annual increase of 53.7%; its revenue in the second quarter was 15.3 billion yuan, a year-on-year increase of 50.6%; and its cumulative revenue in the first half of the year was 28.793 billion yuan, a year-on-year increase of 48.9%.

According to the official website of World Advanced Semiconductor, World Advanced Semiconductor Co., Ltd. (hereinafter referred to as World Advanced) was established on December 5, 1994 in Hsinchu Science Park to provide wafer foundry services. World Advanced currently has five 8-inch wafer fabs, located in Taiwan, China and Singapore. The average monthly production capacity in 2021 is about 241,000 8-inch wafers.

Official website: https://www.vis.com.tw/sc/index

Nanya Technology

June sales: NT$5.2 billion

Compared with last month's change: -16%

Nanya Technology recently announced that its revenue for June 2022 was NT$5.235 billion, a decrease of 15.53% from the previous month and 31.47% from the same period last year. The cumulative consolidated revenue was NT$37.977 billion, a decrease of 5.92% from the same period last year.

According to reports, Nanya Technology Co., Ltd. was established on March 4, 1995. It is committed to the research and development, design, manufacturing and sales of DRAM (dynamic random access memory), and has established overseas marketing bases in the United States, Europe, Japan and mainland China. Its largest shareholder is Nanya Plastics Industrial Co., Ltd. of the Formosa Plastics Group.

The company currently has approximately 2,400 employees and its head office is located in Huaya Technology Park. A 12-inch wafer fab (Fab 3A) at its production base is located in Taishan Nanlin Park, with a current monthly production capacity of 55,000 wafers.

Official website: https://www.nanya.com/cn/

Macronix Electronics

June sales: NT$3.9 billion

Change compared to last month: 10%

Memory chip manufacturer Macronix Electronics recently announced June revenue of NT$3.912 billion, up 10.3% from the previous month, setting a record high for the same period in history; cumulative revenue for the first six months of this year was NT$22.938 billion, up 9% year-on-year, also a record high for the same period in history.

Macronix previously stated that although the company is a memory chip company, more than 80% of the company's NOR Flash products are used in non-PC or consumer electronics fields and are less affected. Demand for automotive, server, medical, 5G and industrial applications remains strong.

Macronix Electronics was founded in 1989 in Hsinchu Science Park, Taiwan. The company provides ROM read-only memory chips, NOR flash memory chips and NAND flash memory chip solutions covering a wide range of specifications and capacities. Its products are mainly used in consumer, communications, computers, industry, automotive electronics, network communications and other fields.

Official website: https://www.mxic.com.tw/zh-tw/Pages/default.aspx

Judging from the latest revenue data of Taiwan's semiconductor giants in June, overall, the performance of Taiwan's wafer fabs and chip design companies is currently sluggish.

Therefore, the situation of tight wafer foundry capacity and overall chip shortage in the past two years may have been alleviated to a certain extent, and the trend of structural chip shortage is obvious. Specifically in the sub-sectors and sub-markets of chip design, the chip market related to mobile phones and consumer electronics has fallen significantly. Among them, Novatek, which has the largest decline, has been hit by the double blow of the driver IC and panel markets, and the market conditions are obviously not good; Nanya Technology, which ranks second in decline, comes from the memory chip industry, which is consistent with the tone of the pessimistic financial report forecast released by global memory giants recently. Technology research institution TrendForce also said on July 13 that DRAM prices in the third quarter may fall by 10% month-on-month; but it is worth noting that the demand for high-end chips related to automobiles, medical care, and industry is still tight . Although Macronix Electronics, which has the largest increase in revenue in Taiwan Semiconductor in June, is a memory chip company, its products are mainly used in hot fields such as automobiles, medical care, and network communications, and its performance has risen by 10% against the trend.

It is also worth noting that the above data shows that June is the turning point of the performance of many Taiwanese semiconductor companies. The performance announcements of many of the above companies mentioned that the revenue in June decreased, but if calculated on a quarterly basis, Q2 still had a good revenue growth. This may also appear in other global semiconductor companies. As major semiconductor companies announce their performance in the future, everyone can compare them.

At present, most of the latest Q2 performance of semiconductor companies in mainland China have not yet been announced, but China Securities Journal mentioned that the companies that have announced their 2022 semi-annual performance forecasts are mainly semiconductor equipment and material companies, which are at the upstream of the semiconductor industry chain. The structural chip shortage is not only reflected in the types and application fields of chips, but also in different links of the semiconductor industry chain.

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