Top semiconductor companies expect decreased sales in Q2. China’s fab and fabless latecomers hold strong.

Sales of latecomers in China’s foundry are expected to increase in the second quarter of this year. Sales of  Chinese UMC and SMIC from Taiwan are expected to increase 3% and 4% QoQ, respectively. UMC and SMIC’s global foundry market share is fourth and fifth respectively.

Taiwan’s TSMC, the world’s No. 1 foundry, expected sales to drop 1%. The revision of export regulations following the US-China conflict appears to have been a negative factor. On the 15th of the previous month, the United States announced that it would seek to revise export regulations that would prevent foreign semiconductor manufacturers using their own technology from supplying semiconductors to Huawei without permission. As of the end of last year, Huawei accounted for an estimated 14% of  TSMC’s total sales. Considering this, the -1% drop is rather a positive figure.

Sales of Chinese fabless latecomers are also expected to increase. Taiwan MediaTek’s second-quarter revenue in the world’s second-largest mobile application processor (AP), which serves as the brain of the smartphone, will increase by 6% compared to the previous quarter. The market for 5G mobile communication (5G) smartphones is expected to surpass 200 million units this year and 1 billion units in 2024. According to Taiwan’s Digitimes, Huawei is discussing with Mediatech about the purchase of a communication chip for 5th generation mobile communication smartphones.

On the other hand, Qualcomm’s sales in the second quarter of the US are expected to drop 5% from the previous quarter. Qualcomm is the world’s No. 1 fabless company in the world’s fifth-generation mobile communication chip market. While the Chinese consumers who are waiting for the release of 5G mobile phones are hesitant to buy smartphones and have poor earnings outlook.

AMD’s sales are expected to increase 4% QoQ. The company is a fabless company in the field of central processing unit (CPU) and graphic processing unit (GPU) for PC. Intel’s sales are expected to decrease 7% from the previous quarter. Nvidia predicts there will be little change in sales.

14 of the 21 semiconductor companies around the world that announced earnings forecasts would see sales decrease in the second quarter. Texas Instruments (TI) of the United States and Infineon of Germany predicted that sales in the quarter would drop by 13%. Dutch NXP forecast -11%, Swiss Microelectronics and Skyworks of the United States -10%, Xilinx of the United States -9%.

SanDisk, the only memory (NAND flash) company in the survey, estimates that sales will rise 4%. The proportion of NAND flash over 128 gigabytes should increase due to the spread of 5G mobile phones and camera specifications.

RR