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With tremendous growth of smartphones over the past decade, foundry sales to the communications market have soared and are now forecast to account for about 3x more than IC foundry sales to the computer market in 2018, based on IC Insights’ extensive part-two analysis of the integrated circuit foundry business in the September Update to The 2018 McClean Report (Figure 1).

Figure 1

Ten years ago, computers/computing systems were easily the largest application for pure-play IC foundry sales, but a relatively flat tablet PC market and lackluster desktop and notebook PC sales since 2011 contributed to weak pure-play foundry sales into the computer segment.

Now, new server applications targeting artificial intelligence (AI), the Internet of Things, Cloud Computing, and cryptocurrency are forecast to breathe new life into this market segment over the next five years. TSMC expects its IC sales into the IoT segment will grow by a CAGR of more than 20% from 2017 through 2022 (the company had greater than $1.0 billion in IoT sales in 2017).

Although IC foundry sales for computer applications are expected to surge 41% this year (driven by TSMC’s cryptocurrency device sales), the communications foundry market is still expected to be about 3x the size of the computer segment in 2018.  The communications foundry market is forecast to display only a 2% growth rate in 2018, six points less than the total pure-play foundry market growth rate expected for this year.

Overall, the communications (52%), computer (19%), and consumer (13%) market segments are forecast to represent 84% of the pure-play IC foundry market in 2018.

GLOBALFOUNDRIES today announced the addition of nine new partners to its growing RFwave Partner Program, including Akronic, Ask Radio, Catena, University of Waterloo Centre for Intelligent Antenna and Radio Systems (CIARS), Giga Solution, Helic, Incize, Mentor Graphics and Xpeedic Technology. These new partners will provide unique mmWave test and characterization capabilities along with design services, IP and EDA solutions that will enable GF clients to rapidly implement RF designs in applications spanning Internet-of-Things (IoT), mobile, RF connectivity, and networking markets.

The RFwave Partner Program builds upon GF’s industry-leading radio frequency (RF) solutions, such as FD-SOI, RF CMOS (bulk and advanced CMOS nodes), RF SOI and silicon germanium (SiGe) technologies. The program provides a low-risk, cost-effective path for designers seeking to build highly optimized RF solutions for a range of wireless applications such as IoT across various wireless connectivity and cellular standards, standalone or transceiver integrated 5G front end modules, mmWave backhaul, automotive radar, small cell and fixed wireless and satellite broadband.

“As the RFwave program continues to expand, partners play a critical role in helping to serve our growing number of clients and extend the reach of our RF ecosystem by providing innovative RF-tailored solutions and services,” said Mark Ireland, vice president of ecosystem partnerships at GF. “These new partners will help drive deeper engagement and enhance technology collaboration, including tighter interlock around quality, qualification and development methodology, enabling us to deliver advanced highly integrated RF solutions.”

GF is focused on building strong ecosystem partnerships with industry leaders. With the RFwave program, GF’s partners and clients can now benefit from a greater availability of resources to deliver innovative, highly optimized RF solutions. The new partners join current RFwave Program members including asicNorth, Cadence, CoreHW, CWS, Keysight Technologies, Spectral Design, and WEASIC.

According to Allied Market Research, the global compound semiconductor market was valued at USD 66,623 million in 2016 and is expected to reach USD 142,586 million in 2023 while growing at a CAGR of 11.3% from 2017 to 2023. The report indicates that a compound semiconductor is composed of two or more elements. Numerous compound semiconductors can be obtained by changing the combination of elements. Some of the factors affecting the market include the increasing demand for optoelectronic devices, as well as the attraction of compound semiconductor’s significant features, such as less power consumption, low price, and reduced heat dissipation. Rise in usage of optical devices, photovoltaic cells, and modules & wireless communication products is expected to provide an attractive opportunity for the compound semiconductor market. Squire Mining Ltd. (OTC: SQRMF), Nvidia Corporation (NASDAQ: NVDA), Advanced Micro Devices, Inc. (NASDAQ: AMD), KLA-Tencor Corporation (NASDAQ: KLAC), Maxim Integrated Products, Inc. (NASDAQ: MXIM)

As semiconductor technology begins to advance, new segments are swiftly being integrated into the market, such as Machine Learning. AI has observed significant growth in recent years. Initially, AI was considered a topic for academicians, though in recent years with development of various technologies, AI has turned into reality and is influencing many lives and businesses. According to MarketsandMarkets the global artificial intelligence chipset market is expected to be worth USD 16.06 Billion by 2022 and grow at a CAGR of 62.9% between 2016 and 2022.

Squire Mining Ltd. (OTCQB: SQRMF) is also listed on the Canadian Securities Exchange under the ticker (CSE: SQR). Earlier last week, the Company announced breaking news that, “to report on its prototype ASIC chip testing event held in Seoul, South Korea. With executives and board members from Squire, Future Farm, CoinGeek, Gaonchips and Samsung Electronics in attendance, Peter Kim, President of Squire’s subsidiary AraCore Technology Corp. (“Aracore”), and his team of front-end microchip engineers and programmers, unveiled and tested a working prototype mining system comprised of a newly engineered FPGA (field programmable gate array) ASIC microchip that will be converted into AraCore’s first ASIC chip utilizing 10 nanometer technology for mining Bitcoin Cash, Bitcoin and other associated cryptocurrencies. The test results confirm Aracore’s original design specifications indicating that the ASIC chip, once mass manufactured by Samsung Electronics, will be capable of delivering a projected hash rate of 18 to 22 terahash per second (TH/s) with an energy consumption of between 700 and 800 watts.

Taras Kulyk, Chief Executive Officer of CoinGeek Mining and Hardware, said “The CoinGeek team is very pleased with the progress of our strategic partners; Squire Mining and Aracore. With this next generation technology, CoinGeek will continue to pull the blockchain industry out of the proverbial basement and into the boardroom.”

Stefan Matthews, Chairman of nChain, one of the industry leaders in blockchain research and development, and a director of Squire Mining added, “The early results indicate that this ASIC microchip has the potential to be the next generation leader in providing hash power for enterprise mining of Bitcoin Cash and other associated crypto currencies. It has also demonstrated the potential to rapidly process consensus protocols across the blockchain faster whilst utilizing less energy than anything currently in this sector.”

Hash rate speed and microchip efficiency are the two most important measuring criteria in the crypto-mining industry to enable end-users to maximize profitability and ROI in their day to day mining operations.

Simon Moore, Executive Chairman and CEO of Squire Mining, stated, “Aracore’s time and investment to date have been validated by the impressive results of this new microchip. Once completed, we believe the speed and efficiency of our ASIC microchip combined with our respective mining systems powered by this Samsung manufactured microchip together have the potential to substantially increase the profitability of enterprise mining facilities around the globe. We look forward to releasing our mining system to the market in the first half of next year through our exclusive distribution partners CoinGeek, and competing for a significant piece of this multi-billion-dollar enterprise mining market.”

About AraCore Technology Corp. – Aracore is a joint venture company established by Squire and Peter Kim to design and develop next generation ASIC chips for mining Bitcoin Cash, Bitcoin and other associated cryptocurrencies. Squire owns a 75% interest in Aracore and Peter Kim owns the remaining 25% interest.

About Squire Mining Ltd. – Squire is a Canadian based company engaged, through its subsidiaries, in the business of developing data mining infrastructure and system technology to support global blockchain applications in the mining space including applicable specific integrated circuit (ASIC) chips and next generation mining rigs to mine Bitcoin Cash, Bitcoin and other associated cryptocurrencies.”

Nvidia Corporation (NASDAQ: NVDA), in 1999, sparked the growth of the PC gaming market, redefined modern computer graphics, and revolutionized parallel computing. Nvidia recently announced that it invited the world’s top automotive safety and reliability company, TÜV SÜD, to perform a safety concept assessment of its new NVIDIA Xavier system-on-chip (SoC). The 150-year-old German firm’s 24,000 employees assess compliance to national and international standards for safety, durability and quality in cars, as well as for factories, buildings, bridges and other infrastructure. As the world’s first autonomous driving processor, Xavier is the most complex SoC ever created. Its 9 billion transistors enable Xavier to process vast amounts of data. Its GMSL (gigabit multimedia serial link) high-speed IO connects Xavier to the largest array of lidar, radar and camera sensors of any chip ever built. “NVIDIA Xavier is one of the most complex processors we have evaluated,” said Axel Köhnen, Xavier lead assessor at TÜV SÜD RAIL. “Our in-depth technical assessment confirms the Xavier SoC architecture is suitable for use in autonomous driving applications and highlights NVIDIA’s commitment to enable safe autonomous driving.”

Advanced Micro Devices, Inc. (NASDAQ: AMD), for more than 45 years, has driven innovation in high-performance computing, graphics and visualization technologies ― the building blocks for gaming, immersive platforms and the datacenter. AMD recently announced the availability of world’s most powerful desktop processor, the 2nd Gen AMD Ryzen Threadripper 2990WX processor with 32 cores and 64 threads. Designed to power the ultimate computing experiences, 2nd Gen AMD Ryzen Threadripper processors are built using 12nm “Zen+” x86 processor architecture and offer the most threads on any desktop processor with the flagship model delivering up to 53% greater performance than the competition’s flagship model. Second Gen AMD Ryzen Threadripper processors support the most I/O2, and are compatible with existing AMD X399 chipset motherboards via a simple BIOS update, offering builders a broad choice for designing the ultimate high-end desktop or workstation PC. “We created Ryzen Threadripper processors because we saw an opportunity to deliver unheard-of levels of multithreaded computing for the demanding needs of creators, gamers, and PC enthusiasts in the HEDT market,” said Jim Anderson, Senior Vice President and General Manager, Computing and Graphics Business Group, AMD. “With the 2nd Gen processor family we took that challenge to a whole new level – delivering the biggest, most powerful desktop processor the world has ever seen.”

KLA-Tencor Corporation (NASDAQ: KLAC), a provider of process control and yield management solutions, partners with customers around the world to develop sinspection and metrology technologies. Recently, KLA-Tencor Corporation announced two new defect inspection products designed to address a wide variety of integrated circuit (IC) packaging challenges. The Kronos™ 1080 system offers production-worthy, high sensitivity wafer inspection for advanced packaging, providing key information for process control and material disposition. The ICOS™ F160 system examines packages after wafers have been diced, delivering fast, accurate die sort based on detection of key defect types-including sidewall cracks, a new defect type affecting the yield of high-end packages. The two new inspection systems join KLA-Tencor’s portfolio of defect inspection, metrology and data analysis systems that help accelerate packaging yield and increase die sort accuracy. “As chip scaling has slowed, advances in chip packaging technology have become instrumental in driving device performance,” said Oreste Donzella, Senior Vice President and Chief Marketing Officer at KLA-Tencor. “Packaged chips need to achieve simultaneous targets for device performance, power consumption, form factor and cost for a variety of device applications. As a result, packaging design has become more diverse and complex, featuring a range of 2D and 3D structures that are more densely packed and shrinking in size with every generation. At the same time, the value of the packaged chip has grown substantially, along with electronics manufacturers’ expectations for quality and reliability.”

Maxim Integrated Products, Inc. (NASDAQ: MXIM) develops innovative analog and mixed-signal products and technologies to make systems smaller and smarter, with enhanced security and increased energy efficiency. Maxim Integrated recently announced that automotive infotainment designers can now upgrade to bigger, higher resolution displays with greater ease, reduced cost and smaller solution size with the MAX20069 from Maxim Integrated Products, Inc. The MAX20069 provides the industry’s first solution integrating four I2C-controlled, 150mA LED backlight drivers and a four-output thin-film-transistor liquid-crystal display (TFT-LCD) bias in a single chip. The IC can reduce design footprint up to one-third compared to the closest competitor’s parts. “Automotive manufacturers are using more screens, larger panels and brighter displays across several vehicle lines to support a safer and more engaging experience on the road,” said Szukang Hsien, Executive Business Manager, Automotive Business Unit, Maxim Integrated. “Maxim’s integrated LED backlight driver and TFT-LCD bias solution supports newer panel types to help automotive manufacturers adopt lower cost yet higher resolution panels with smaller solution size and a high level of integration.”

Technion, Israel’s technological institute, announced this week that Intel is collaborating with the institute on its new artificial intelligence (AI) research center. The announcement was made at the center’s inauguration attended by Dr. Michael Mayberry, Intel’s chief technology officer, and Dr. Naveen Rao, Intel corporate vice president and general manager of the Artificial Intelligence Products Group.

“AI is not a one-size-fits-all approach, and Intel has been working closely with a range of industry leaders to deploy AI capabilities and create new experiences. Our collaboration with Technion not only reinforces Intel Israel’s AI operations, but we are also seeing advancements to the field of AI from the joint research that is under way and in the pipeline,” said Naveen Rao, Intel corporate vice president and general manager of Artificial Intelligence Products Group

The center features Technion’s computer science, electrical engineering, industrial engineering and management departments, among others, all collaborating to drive a closer relationship between academia and industry in the race to AI. Intel, which invested undisclosed funds in the center, will represent the industry in leading AI-dedicated computing research.

Intel is committed to accelerating the promise of AI across many industries and driving the next wave of computing. Research exploring novel architectural and algorithmic approaches is a critical component of Intel’s overall AI program. The company is working with customers across verticals – including healthcare, autonomous driving, sports/entertainment, government, enterprise, retail and more – to implement AI solutions and demonstrate real value. Along with Technion, Intel is also involved in AI research with other universities and organizations worldwide.

Intel and Technion have enjoyed a strong relationship through the years, as generations of Technion graduates have joined Intel’s development center in Haifa, Israel, as engineers. Intel has also previously collaborated with Technion on AI as part of the Intel Collaborative Research Institute for Computational Intelligence program.

“2017 was an excellent year for CIS , with growth observed in all segments except computing,” commented Pierre Cambou, Principal Analyst, Technology & Market, Imaging at Yole Développement (Yole). Driven by new applications, the industry’s future remains on strong footing.

Yole announces its annual technology & market analysis focused on the CIS industry, from 2017 to 2023, titled: Status of the CMOS Image Sensor Industry. In 2017 the CIS market reached US$13.9 billion. The market research & strategy consulting company forecasts a 9.4% CAGR between 2017 and 2023, driven mainly by smartphones integrating additional cameras to support functionalities like optical zoom, biometry, and 3D interactions.

Yole proposes this year again a comprehensive technology & market analysis of the CMOS Image Industry. In addition to a clear understanding of the CIS ecosystem, analysts detail in this new edition, 2017-2023 forecasts, a relevant description of the M&A activities, an impressive overview of the dual and 3D camera trends for mobile. Mobile and consumer applications are also well detailed in this 2018 edition, with a deep added-value section focused on technology evolution.
In collaboration with Jean-Luc Jaffard, formerly at STMicroelectronics and part of Red Belt Conseil, Pierre Cambou pursued his investigation all year long and reveals today the status of the CIS industry.

2017 saw aggregated CIS industry revenue of US$13.9 billion. And 5 years later, the consulting company Yole announces more than US$ 23 billion. The YoY growth hit a peak at 20% due to the exceptional increase in image sensor value, across almost all markets, but primarily in the mobile sector. “CIS keeps its momentum”,confirms Pierre Cambou from Yole.

Revenue is dominated by mobile, consumer, and computing, which represent 85% of total 2017 CIS revenue. Mobile alone represents 69%. Security is the second-largest segment, behind automotive.

The CIS ecosystem is currently dominated by the three Asian heavyweights: Sony, Samsung, and Omnivision. Europe made a noticeable comeback. Meanwhile, the US maintains a presence in the high-end sector.

The market has benefited from the operational recovery of leading CIS player Sony, which captured 42% market share. “…Apple iPhone has had a tremendous effect on the semiconductor industry, and on imaging in particular. It offered an opportunity for its main supplier, Sony, to reach new highs in the CIS process, building on its early advances in high-end digital photography…”, explains Pierre Cambou in its article: Image sensors have hugely benefited from Apple’s avant-garde strategy posted on i-micronews.com.

The CIS industry is able to grow at the speed of the global semiconductor industry, which also had a record year, mainly due to DRAM revenue growth. CIS have become a key segment of the broader semiconductor industry, featuring in the strategy of most key players, and particularly the newly-crowned industry leader Samsung. Mobile, security and automotive markets are all in the middle of booming expansion, mostly benefiting ON Semiconductor and Omnivision.

These markets are boosting most players that are able to keep up with technology and capacity development through capital expenditure. The opportunities are all across the board, with new players able to climb the rankings, such as STMicroelectronics and Smartsense. Technology advancement and the switch from imaging to sensing is fostering innovation at multiple levels: pixel, chip, wafer, all the way to the system.

CIS sensors are also at the forefront of 3D semiconductor approaches. They are a main driver in the development of artificial intelligence. Yole’s analysts foresee new techniques and new applications all ready to keep up the market growth momentum… A detailed description of this report is available on i-micronews.com, imaging reports section.

According to data compiled by Inkwood Research, the global semiconductor market is projected to grow at a CAGR of 7.67% during the forecast period from 2017 to 2024. Data reflects that the market is driven by rising demand for consumer electronics, the growing automotive semiconductor market, the emerging internet of things (IoT) market and investments into New Product Development and R&D. Consumer electronics are primarily fueling the market due to demand for products such as tablets, smartphones, laptops and wearable devices. As semiconductor technology begins to advance, new segments are swiftly being integrated into the market, such as Machine Learning. Squire Mining Ltd. (OTC: SQRMF), Intel Corporation (NASDAQ: INTC), Texas Instruments Incorporated (NASDAQ: TXN), NXP Semiconductors N.V. (NASDAQ: NXPI), Skyworks Solutions, Inc. (NASDAQ: SWKS)

According to data by MarketsandMarkets, the global machine learning sector is expected to grow from USD 1.41 Billion in 2017 to USD 8.81 Billion in 2022 while registering a CAGR of 44.1% during the forecast period. The segment is rapidly growing due to many businesses adopting machine learning to gather intelligence for security and consumer interaction benefits, which can help eliminate human errors. However, machine learning is also being integrated into modern day technology, such as the automotive industry, to build autonomous vehicles. In a report by Forbes, Daniel Newman Principal Analyst and Founding Partner of Futurum Research, explained, “When dealing with a technology as advanced as machine learning, there simply isn’t an industry that would not benefit. I mean how could a business not take advantage of a technology that would make them more successful? In the next year, there will be multiple new uses for machine learning in all of these industries available for the taking and I’m not just talking about in marketing and sales.”

Squire Mining Ltd. (OTCQB: SQRMF) is also listed on the Canadian Securities Exchange under the ticker (CSE: SQR). Yesterday, the Company announced breaking news that, “to report on its prototype ASIC chip testing event held in Seoul, South Korea. With executives and board members from Squire, Future Farm, CoinGeek, Gaonchips and Samsung Electronics in attendance, Peter Kim, President of Squire’s subsidiary AraCore Technology Corp. (“Aracore”), and his team of front-end microchip engineers and programmers, unveiled and tested a working prototype mining system comprised of a newly engineered FPGA (field programmable gate array) ASIC microchip that will be converted into AraCore’s first ASIC chip utilizing 10 nanometer technology for mining Bitcoin Cash, Bitcoin and other associated cryptocurrencies. The test results confirm Aracore’s original design specifications indicating that the ASIC chip, once mass manufactured by Samsung Electronics, will be capable of delivering a projected hash rate of 18 to 22 terahash per second (TH/s) with an energy consumption of between 700 and 800 watts.

Taras Kulyk, Chief Executive Officer of CoinGeek Mining and Hardware, said ‘The CoinGeek team is very pleased with the progress of our strategic partners; Squire Mining and Aracore. With this next generation technology, CoinGeek will continue to pull the blockchain industry out of the proverbial basement and into the boardroom.’

Stefan Matthews, Chairman of nChain, one of the industry leaders in blockchain research and development, and a director of Squire Mining added, ‘The early results indicate that this ASIC microchip has the potential to be the next generation leader in providing hash power for enterprise mining of Bitcoin Cash and other associated crypto currencies. It has also demonstrated the potential to rapidly process consensus protocols across the blockchain faster whilst utilizing less energy than anything currently in this sector.’

Hash rate speed and microchip efficiency are the two most important measuring criteria in the crypto-mining industry to enable end-users to maximize profitability and ROI in their day to day mining operations.

Simon Moore, Executive Chairman and CEO of Squire Mining, stated, ‘Aracore’s time and investment to date have been validated by the impressive results of this new microchip. Once completed, we believe the speed and efficiency of our ASIC microchip combined with our respective mining systems powered by this Samsung manufactured microchip together have the potential to substantially increase the profitability of enterprise mining facilities around the globe. We look forward to releasing our mining system to the market in the first half of next year through our exclusive distribution partners CoinGeek, and competing for a significant piece of this multi-billion-dollar enterprise mining market.’

The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing, design, and research, to day announced worldwide sales of semiconductors reached $40.16 billion for the month of August 2018, an increase of 14.9 percent compared to the August 2017 total of $34.96 billion. Global sales in August 2018 were 1.7 percent higher than the July 2018 total of $39.49 billion. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Global semiconductor sales continued to bound upward in August, easily outperforming sales from last August and narrowly surpassing last month’s total,” said John Neuffer, president and CEO, Semiconductor Industry Association. “While year-to-year growth has moderated somewhat in recent months, sales remain strong across every major semiconductor product category and regional market, with the China and Americas markets standing out with the largest year-year growth.”

Regionally, sales increased compared to August 2017 in China (27.3 percent), the Americas (15.0 percent), Europe (9.5 percent), Japan (8.4 percent), and Asia Pacific/All Other (4.7 percent). Sales were up compared to last month in China (2.1 percent), the Americas (3.6 percent), and Asia Pacific/All Other (1.3 percent), and decreased slightly inJapan (-0.1 percent), and Europe (-1.4 percent).

For comprehensive monthly semiconductor sales data and detailed WSTS Forecasts, consider purchasing the WSTS Subscription Package. For detailed data on the global and U.S. semiconductor industry and market, consider purchasing the 2018 SIA Databook.

Synopsys, Inc. (Nasdaq: SNPS) today announced delivery of automotive-grade DesignWare® Controller and PHY IP for TSMC’s 7-nanometer (nm) FinFET process. The DesignWare LPDDR4x, MIPI CSI-2 and D-PHY, PCI Express® 4.0, and security IP implement advanced automotive design rules for TSMC 7-nm process to meet the stringent reliability and operation requirements of ADAS and autonomous driving system-on-chips (SoCs). The delivery of automotive-grade IP in TSMC’s 7-nm process further extends Synopsys’ broad portfolio of ISO 26262 ASIL Ready IP solutions in FinFET processes, which has been adopted by more than a dozen leading automotive companies. The IP meets stringent AEC-Q100 temperature requirements, delivering high reliability for automotive SoCs. In addition, the included automotive safety packages with Failure Modes, Effects, and Diagnostic Analysis (FMEDA) reports enable designers to save months of development effort and accelerate SoC-level functional safety assessments.

“TSMC’s and Synopsys’ long history of successful collaboration has enabled our mutual customers to benefit from the latest technology advancements to help them achieve their performance, power, and area goals,” said Suk Lee, TSMC senior director of the Design Infrastructure Marketing Division. “Delivering automotive-grade DesignWare IP for TSMC’s 7-nanometer FinFET process underscores Synopsys’ continued commitment to providing designers with the quality IP necessary to meet their aggressive design goals and get products to market faster.”

“Developing automotive-grade IP requires intensive knowledge and strict processes to ensure the IP meets stringent ISO 26262 functional safety and AEC-Q100 reliability standards,” said John Koeter, vice president of marketing for IP at Synopsys. “Synopsys continues to make significant investments in developing automotive-qualified IP for the most advanced processes, such as TSMC’s 7-nanometer, to help designers accelerate their SoC-level qualification effort for functional safety, reliability, and automotive quality.”

IC Insights’ September Update to The McClean Report shows that as a result of a 51% forecasted increase in the China pure-play foundry market this year (Figure 1), China’s total share of the 2018 pure-play foundry market is expected to jump by five percentage points to 19%, exceeding the share held by the rest of the Asia-Pacific region. Overall, China is forecast to be responsible for 90% of the $4.2 billion increase in the total pure-play foundry market in 2018.

Figure 1

With the recent rise of the fabless IC companies in China, the demand for foundry services has also risen in that country.  In total, pure-play foundry sales in China jumped by 26% last year to $7.5 billion, almost triple the 9% increase for the total pure-play foundry market.  Moreover, in 2018, pure-play foundry sales to China are forecast to surge by an amazing 51%, more than 6x the 8% increase expected for the total pure-play foundry market this year.

Although all of the major pure-play foundries are expected to register double-digit sales increases to China this year, the biggest increase by far is forecast to come from pure-play foundry giant TSMC.  Following a 44% jump in 2017, TSMC’s sales into China are forecast to surge by another 79% in 2018 to $6.7 billion. As a result, China is expected to be responsible for essentially all of TSMC’s sales increase this year with China’s share of the company’s sales more than doubling from 9% in 2016 to 19% in 2018.

As shown in Figure 2, much of TSMC’s sales surge into China has come over the past year, with 2Q18 sales into the country being almost double what they were in 3Q17.  A great deal of the company’s recent sales surge into China has been driven by increased demand for custom devices going into the cryptocurrency market.  It turns out that many of the large cryptocurrency fabless design firms are based in China and most of them have been turning to TSMC to produce their advanced chips for these applications.  It should be noted that TSMC includes its cryptocurrency business as part of its High-Performance Computing segment.

Figure 2

While TSMC has enjoyed a great ramp up in sales for its cryptocurrency business over the past year, the company has indicated that a slowdown is expected for this business in the second half of this year.  It appears that the demand for cryptocurrency devices is highly dependent upon the price for the various cryptocurrencies (the most popular of which is Bitcoin).  As a result, the recent plunge in the price for Bitcoins (going from over $15K per Bitcoin in January of this year to less than $7K in September), and other cryptocurrencies as well, is lowering the demand for these ICs.  Moreover, since TSMC realized from the beginning that the cryptocurrency market was going to be volatile, the company did not adjust its capacity plans based on the recent strong cryptocurrency demand and does not incorporate cryptocurrency business assumptions into its forecasts for future long-term growth.

By Jay Chittooran

Last week, more than a dozen senior semiconductor executives traveled to Washington, DC for the first-ever Fall Washington Forum. The SEMI Washington Forum, a venue for SEMI members to educate lawmakers about the industry, focused on action against China, both in the form of tariffs and export controls.

Our industry is global, and companies rely heavily on trade. In 2017, more than 90 percent of equipment made in the United States was exported. Because of this dynamic, the United States holds a nearly $9 billion trade surplus in this industry. SEMI is supportive of trade policies that open foreign markets.

In the meetings, the executives expressed deep concern that the tariffs would inflict deep damage to the U.S. economy, including to SEMI members. Estimates suggest that the Sec. 301 tariffs (and the Chinese retaliatory tariffs) will cost semiconductor companies more than $700 million annually, dramatically increasing the cost of doing business. These tariffs also threaten U.S. technological leadership. The United States has led innovation for decades. However, by pursuing policies that limit market access opportunities, company-led R&D and innovation will slow, which, in turn, will curb further export potential.

SEMI companies also stressed that because of the blunt application of these tariffs, this action will actually hurt U.S. companies as much as it hurts their Chinese competitors. Indeed, about 40 percent of imports in our sector from China are from U.S. or other non-Chinese companies. Further, the semiconductor industry relies on a vast network of supply chains, which have been built and qualified over the course of years. A fundamental revamp of supply chains is simply not feasible. This would be expensive, time-consuming, and resource-intensive.

With a growing number of policy issues that are central to and could have significant impact for semiconductor companies, SEMI hosted its first ever Fall Washington Forum for members of its North American Advisory Board (NAAB). SEMI also invited several other industry executives. In total, 14 senior industry executives, including representatives from equipment manufacturers, component suppliers, and materials providers, attended the Fall Forum.

During the two days of meetings, SEMI met with several senior Administration officials to better the policies being enacted and considered as well as encourage all parties to not impose barriers to commerce, which would severely impact the semiconductor industry. SEMI also met with Members of Congress and their staffs on this issue.

All told, attendees at the Fall Forum had more than 15 meetings with policymakers, reflecting the great impact of public policy on SEMI members companies. At a time when the stakes for the industry could not be higher, direct engagement with lawmakers is critical. The Washington Forum offers an incredible opportunity for members to better understand the impact of key public policy issues and gain firsthand experience in influencing policy and helping lawmakers better understand the industry.

If you are interested in learning more about the SEMI Washington Forum or SEMI’s public policy program, please contact Jay Chittooran by email at [email protected].