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2021-09-16

TrendForce Announces 10 Tech Industry Trends for 2022

In this press release, TrendForce details 10 major trends that are expected to take place across various segments in the tech industry, as follows:

Micro/Mini LED display development will revolve around active matrix solutions

A substantial number of technical bottlenecks in Micro LED development will still persist in 2022. While Micro LED manufacturing costs are expected to remain sky-high due to these bottlenecks, companies have not shown decreased willingness to participate in all segments of the Micro LED supply chain. On the contrary, these companies are actively expanding their respective production lines. Regarding the development of self-emitting Micro LED display products, TVs represent one of the major directions of mainstream Micro LED development, primarily because TVs, compared to IT products, have a relatively low technological barrier of entry. In other words, Micro LED TVs are easier to develop than are other Micro LED display products. For instance, after releasing a 110-inch commercial passive matrix Micro LED display, Samsung will likely continue to develop 88-inch (and under) consumer-grade active matrix Micro LED TVs. This extension of Micro LED technology from the large-sized commercial display segment to the household-use segment by Samsung is in turn indicative of the overall expansion of the Micro LED market.

Regarding display products equipped with Mini LED backlights, brands have been raising the number of Mini LED chips used per panel in an attempt to boost the specs of their display products and pursue 1:1,000,000 high contrast ratios that are comparable to OLED displays. As a result, Mini LED backlight panels’ LED chip consumption is more than 10 times higher compared to traditional LED backlight panels, in addition to the fact that Mini LED backplane manufacturing requires SMT equipment with a higher degree of accuracy and production capacity. While Mini LED backlights are primarily based on passive matrix solutions, they will move towards active matrix solutions going forward, with a corresponding surge in Mini LED chip consumption. Hence, the performance and capacity of SMT equipment will also become one of the key criteria in brands’ selection of potential supply chain partners.

More advanced AMOLED technology and under-display cameras will usher in the next stage of smartphone revolution

As the supply of and production capacity for AMOLED panels continue to rise, AMOLED technology has also become increasingly mature. Leading suppliers are still attempting to tack on additional functions and improved specs to their AMOLED panels in order to not only raise said panels’ added values, but also maintain the competitive advantages of the suppliers themselves. The primary value added to AMOLED panels in 2022 will likely continue to be the ever-improving foldable designs, which will feature optimized weight reduction and power efficiency. Apart from mainstream foldable phones that can unfold to reach tablet-like sizes, clamshell-like designs such as flip-up and flip-down smartphone bodies will also emerge as a form factor that more closely resembles the smartphones currently in use. Furthermore, retail prices of foldable phones are expected to generally fall within the price bands of mainstream flagships, thereby generating sales growths for the upcoming foldable models. Other foldable designs, including form factors with even more folds or rollable form factors, are expected to enter production within the near future. TrendForce expects foldable phones to reach a penetration rate of more than 1% in 2022 and 4% in 2024. LTPO panels, on the other hand, are an effective solution to power consumption issues arising from the adoption of 5G technology and high refresh rate displays. Hence, LTPO panels will likely gradually become the mainstream display panel for flagship smartphones. After two years of development and adjustments, under-display camera modules will finally make their appearance in various brands’ flagship models and enable the creation of smartphones with true full-screen displays.

The foundry industry welcomes the arrival of 3nm process technology courtesy of TSMC’s FinFET and Samsung’s GAA technologies

As semiconductor manufacturing processes gradually approach physical limits, chip development must now turn to either “changes in transistor architecture” or “breakthroughs in back-end packaging technology or materials” in order to achieve faster performances, reduced power consumption, and smaller footprints. After incorporating EUV lithography at the 7nm node in 2018, the semiconductor industry will welcome yet another revolutionary process technology in 2022 – the 3nm node. More specifically, TSMC and Samsung are expected to announce their respective 3nm process technologies in 2H22. While the former will continue to adopt the FinFET architecture that it has been using since the 1Xnm node, Samsung will for the first time utilize its own implementation of GAAFET, called MBCFET (multi-bridge channel field-effect transistor) for its 3nm process technology.

In contrast with the FinFET architecture, in which the gate makes contact with the source/drain channel on three sides, the GAAFET architecture consists of a gate that surrounds the nanowire or nanosheet channel on four sides, thus increasing the surface area of contact. The GAAFET design significantly reduces leakage currents by giving the gate a greater degree of control over the channel. Regarding possible applications, the first batch of products mass produced at the 3nm node in 2H22 is expected to primarily be HPC and smartphone chips since these products place a relatively high demand on performance, power consumption, and chip compactness.

While DDR5 products gradually enter mass production, NAND Flash stacking technology will advance past 200 layers

The three dominant DRAM suppliers (Samsung, SK Hynix, and Micron) will not only gradually kick off mass production of next-gen DDR5 products, but also continue to increase the penetration rate of LPDDR5 in the smartphone market in response to demand for 5G smartphones. With memory speed in excess of 4800Mbps, DDR5 DRAM can massively improve computing performances via their fast speed and low power consumption. As Intel releases its new CPUs that support DDR5 memory, with Alder Lake for the PC segment, followed by Eagle Stream for the server segment, DDR5 is expected to account for about 10-15% of DRAM suppliers’ total bit output by the end of 2022. Regarding process technologies, Samsung and SK hynix will kick off mass production of 1 alpha nm products manufactured with EUV lithography. These products’ market shares will likely increase on a quarterly basis next year.

Turning to NAND Flash products, their stacking technologies have yet to reach a bottleneck. Hence, after 176L products entered mass production in 2021, suppliers will continue to migrate towards 200L and above in 2022, although these upcoming products’ chip densities will remain at 512Gb/1Tb. Regarding storage interfaces, the market share of PCIe Gen4 SSDs will likely skyrocket in the consumer PC segment next year. In the server segment, as Intel Eagle Stream CPUs, which support PCIe Gen 5, enter mass production, the enterprise SSD market will also see the release of products that support this interface. Compared to the previous generation, PCIe Gen 5 features double the data transfer rate at 32GT/s and an expanded storage capacity for mainstream products at 4/8TB in order to meet the HPC demand of servers and data centers. Additionally, the release of PCIe Gen 5 SSDs is expected to quickly raise the average data storage capacity per server unit.

Regarding the server market, flexible pricing schemes and diverse services offered by CSPs have directly propelled the cloud service demand of enterprises in the past two years. From the perspective of the server supply chain, the predominant business model has gradually transformed from traditional server brands to ODM Direct, meaning that traditional server brands will see fundamental, structural changes, such as providing colocation servers or full-service cloud migration support, in their business models. This shift also means that enterprise clients will come to rely on more flexible pricing schemes and diverse risk mitigation measures in response to an uncertain global environment. In particular, while the pandemic accelerated changes in work and everyday life in 2020, hyperscalers are expected to account for nearly 50% of total demand for servers in 2022. In addition, the growth in ODM Direct server shipment is expected to surpass 10% YoY as well.

Mobile network operators will undertake more trial projects for 5G SA network slicing and low-latency applications

Mobile network operators have been actively release 5G SA (standalone) networks as the core network powering various services around the world, in turn accelerating the build-out of base stations in major cities, diversifying their network services (via network slicing and edge computing), and delivering end-to-end networks with a high degree of quality assurance. Moving to 2022, applications that are at the intersection of 5G, massive IoT, and critical IoT will emerge in response to enterprise demand. These applications, including light switches, sensors, and thermostats used in smart factories, involve the combination of network endpoints and data transmission. In particular, critical IoT applications include smart grid automation, telemedicine, traffic safety, and industrial automation, whereas critical IoT use cases within the context of Industry 4.0 include asset tracking, predictive maintenance, FSM (field service management), and logistics optimization.

Now that the pandemic has forced enterprises to engage in digital transformation and brought changes to the general public’s lifestyles, the importance of 5G deployment has become increasingly apparent. Private 5G networks, openRAN, unlicensed spectrums, and mmWave developments have also generated a diverse ecosystem that ranges from traditional mobile network operators to other emerging service providers, including OTT media service providers, CSPs, social media, and online businesses. In the future, mobile network operators will likely actively expand their enterprise 5G applications. For instance, O2’s 5G-ENCODE project explores new business models in industrial 5G networks, while Vodafone is collaborating with the MFM (Midlands Future Mobility) consortium to test networks for autonomous vehicles.

Satellite operators will compete over the low-earth orbit satellite market, with 3GPP now supporting non-terrestrial networks

3GPP recently announced that Release 17 Protocol Coding Freeze will take place in 2022. Release 17 represents the first time 3GPP has incorporated NTN (non-terrestrial network) communications into its releases and therefore marks a significant milestone for both the mobile communications industry and the satellite communications industry. Prior to this, mobile communications and satellite communications had been two separate, independently developing industries. That is why companies working across the two industries in the upstream, midstream, and downstream supply were generally different as well. After 3GPP includes NTN in its upcoming release, the two industries are likely to generate more opportunities for collaboration and co-create brand new innovations. Regarding the deployment of LEO (low earth orbit) satellites, US-based SpaceX has applied to launch the highest number of satellites among all satellite operators. Other major operators include Amazon, UK-based OneWeb, Canada-based Telesat, etc. Region-wise, US operators account for more than 50% of all satellites launched. Not only do LEO satellites have the advantage of signal coverage that is unaffected by geographical features, such as mountainous regions, oceans, and deserts, but they are also able to synergize with the 5G network. The ability of LEO satellites, as part of the NTN, to enhance 5G communications makes them a crucial component in the 3GPP Release 17. TrendForce therefore forecasts an increase in global satellite revenue in 2022.

While smart factories are among the first to leverage digital twins, IoT technologies are expected to become the backbone of the metaverse

The new normal that emerged in the wake of the COVID-19 pandemic continues to propel demand for contactless devices and digital transformations. As part of this evolution, IoT development in 2022 will likely focus on CPS (cyber-physical systems), which combines 5G, edge computing, and AI technologies to extract and analyze valuable information from vast data streams for the purpose of smart automation and prediction. A current example of CPS applications is the digital twin, used for such verticals as smart manufacturing and smart cities; while CPS integration for the former facilitates design, testing, and manufacturing simulations, the latter make use of CPS to monitor significant assets and assist in policymaking. Now that industrial realities have become more complex, and the interplay between usage cases and equipment have increasingly demanded attention, digital twins will subsequently be deployed to a wider range of applications. Paired with 3D sensing, VR, and AR capabilities, IoT-based metaverse will likely emerge as a smart, complete, real-time, and safe mirror to the physical world, and the first application of IoT-based metaverse is expected to be smart factories. Ultimately, technological innovations in data collection (including visual, auditory, and environmental data via sensors), data analysis (via AI platform integration), and data integrity (via blockchains) will also emerge as a result of IoT development.

AR/VR equipment manufacturers aim to deliver fully immersive experiences via integration of additional sensors and AI processing

The COVID-19 pandemic has fundamentally changed the way people live and work. For enterprises, the pandemic not only accelerated their pace of digital transformation, but also increased their willingness to integrate emerging technologies into their existing operations. For instance, AR/VR adoption for applications such as virtual meetings, AR remote support, and virtual design has been on the rise recently. On the other hand, companies will likely focus on various remote interaction functionalities in virtual communities and online games as an important AR/VR market segment. TrendForce therefore believes that the AR/VR market will expand by a considerable margin in 2022 due to the falling retail prices of AR/VR hardware as well as the growing adoption of such hardware for various use cases. Furthermore, the market will also continue to pursue more realistic AR/VR effects, such as applications that feature more realistic images constructed by software tools or the creation of virtual responses from real-world data assisted by either AI processing or the integration of various sensors. For instance, eye-tracking functionalities will become an optional feature of consumer products released by Oculus and Sony. Apart from these examples, AR/VR solutions may even evolve to the point where they are able to provide partial haptic feedback to the user through controllers or other wearable devices in order to deepen user immersion.

A natural extension of autonomous driving technology, automated valet parking is set to resolve drivers’ pain points

As part of autonomous driving technology’s implementation aimed at improving everyday life, AVP (automated valet parking), an SAE level 4 driverless parking service, is expected to become an important optional function of high-end vehicles beginning in 2022. Relevant international standards are currently being drafted and are expected to facilitate the adoption of AVP going forward. However, since AVP systems differ according to vehicle specifications, they are subject to various restrictions related to driving conditions, including fixed/unfixed routes and private/public parking spaces, while parking lot conditions such as wireless network connectivity and the comprehensiveness of traffic markings can also affect the viability of AVP. The distance between people and the vehicle during AVP use, on the other hand, is governed by domestic laws. In view of automakers’ diverse technological roadmaps, AVP parking routes are generated by either local computing on the vehicle end or cloud computing, the latter of which requires sufficient network connectivity in order to function. The former is therefore expected to see usage in a wider variety of use cases. Alternatively, some vehicles may be equipped with both computing solutions. With other such factors as V2X and high-definition maps affecting the range of AVP applications, TrendForce expects an increasing number of different AVP solutions to be under development at the moment.

The third-generation semiconductor industry will move towards 8-inch wafers and new packaging technologies while expanding in production capacity

The gradual phasing out of ICE vehicles by various governments across the 2025-2050 period is set to both accelerate the pace of EV sales and increase the penetration rate of SiC and GaN devices/modules. Energy transition activities worldwide as well as the rapid growth of telecom applications such as 5G technology have also led to a persistent bull market for third-generation semiconductors, resulting in strong sales of SiC and Si substrates. However, as current efforts in substrate production and development are relatively limited, suppliers are able to ensure a steady yield of SiC and GaN substrates only by manufacturing them with 6-inch wafers. Such a limitation has, in turn, led to a long-term shortage in foundries’ and IDMs’ production capacities.

In response to this quandary, substrate suppliers, including Cree, II-VI, and Qromis, are now planning to not only expand their production capacities in 2022, but also migrate their SiC and GaN production to 8-inch wafers, in hopes that these plans will gradually alleviate the prevailing shortage in the third-generation semiconductor market. On the other hand, foundries such as TSMC and VIS are attempting to shift to 8-inch wafer fabrication for GaN on Si technology, while major IDM Infineon is releasing products based on the latest CoolSiC MOSFET, delivering trench designs that enable significant power efficiency for semiconductor devices. Finally, telecommunication component provider Qorvo has also released a new GaN MMIC copper flip chip packaging architecture for military applications.

2021-09-15

Revenue of Top 10 IC Design (Fabless) Companies Reaches US$29.8 Billion for 2Q21, Though Growth May Potentially Slow in 2H21, Says TrendForce

In view of the ongoing production capacity shortage in the semiconductor industry and the resultant price hike of chips, revenue of the top 10 IC design companies for 2Q21 reached US$29.8 billion, a 60.8% YoY increase, according to TrendForce‘s latest investigations. In particular, Taiwanese companies put up remarkable performances during this period, with both MediaTek and Novatek posting YoY growths of more than 95%. AMD, on the other hand, experienced a nearly 100% YoY revenue growth, the highest among the top 10.

TrendForce indicates that the ranking of the top five companies for 2Q21 remained unchanged from the previous quarter, although there were major changes in the 6th to 10th spots. More specifically, after finalizing its acquisition of Inphi, Marvell experienced a major revenue growth and leapfrogged Xilinx and Realtek in the rankings from 9th place in 1Q21 to 7th place in 2Q21.

Thanks to strong demand for major smartphone brands’ flagship and high-end 5G handsets, revenue leader Qualcomm’s processor and RF front-end businesses underwent remarkable growths, while its IoT business also benefitted from WFH and distance learning demands generated by the COVID-19 pandemic. Qualcomm’s revenue from its IoT business reached nearly US$1.4 billion, making IoT one of the major growth drivers for the company. For 2Q21, Qualcomm’s revenue reached US$6.47 billion, a 70.0% YoY increase. On the other hand, Nvidia’s revenues from gaming graphics cards and data center solutions each grew by 91.1% YoY and 46% YoY, respectively, in 2Q21. Strong demand from cryptocurrency miners for Nvidia’s high-end gaming graphics cards, along with the data center segment’s demand for Nvidia’s HPC products, propelled the company’s revenue for 2Q21 to US$5.84 billion, a 68.8% YoY growth, and secured the second place for Nvidia on the top 10 list.

Broadcom, which took third place on the top 10, attributed most of its revenue to wired connectivity and wireless products. Regarding wired connectivity products, the continued build-out of 5G base stations worldwide resulted in increasing demand for Broadcom’s high-speed Ethernet controller ICs, whereas for wireless products, the release of certain high-end 5G smartphones also created high demand for Broadcom’s Wi-Fi 6E chips. Similarly, Broadcom’s broadband and industrial solutions businesses both underwent double-digit growths in 2Q21, thereby driving the company’s revenue for 2Q21 to US$4.95 billion, a 19.2% YoY growth. Turning to AMD, the company’s revenue for 2Q21 reached US$3.85 billion, a staggering 99.3% YoY increase, owing to the following: first, the bullish gaming console market; second, massive earnings growths from enterprise, embedded, and semi-custom solutions; third, increased client adoption of AMD’s server CPUs (it should be noted that AMD’s server processor business grew by 183% YoY in 2Q21). AMD took fifth place in the top 10 list for 2Q21.

Regarding Taiwanese companies, MediaTek was able to sustain the momentum it gained in 1Q21 throughout 2Q21. MediaTek’s smartphone chip business, which generated the bulk of the company’s revenue, registered a 143% growth in 2Q21. At the same time, its revenues from other businesses also saw an overall double-digit growth. Hence, MediaTek posted a revenue of US$4.49 billion for 2Q21, a 98.8% YoY growth, and reached fourth place on the list. Finally, Novatek’s SoCs and display driver ICs both performed well in the market primarily due to its close partnerships with major foundries, including TSMC, UMC, and VIS. Revenue from display driver ICs, which had traditionally been Novatek’s primary revenue source, grew by 81% YoY in 2Q21.

Certain rumors in the end-devices markets indicate that demand will likely undergo a slowdown in 3Q21 and lead to decreased orders for certain components. However, given that foundries’ newly installed wafer capacities have yet to kick off mass production, the ongoing chip shortage is expected to persist for now. In addition, as some IC design companies’ client orders still remain unfulfilled, these companies’ revenues will likely experience further growths in 2H21, albeit to a relatively limited extent. It should also be pointed out that Marvell is expected to benefit from Inphi’s earnings for the next two quarters and increase its own revenue by more than 50% YoY in 2H21. Even so, Novatek’s sixth-place ranking is unlikely to be threatened by Marvell in the short run since Novatek will continue to benefit from the ongoing chip shortage and price hikes for the time being.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

2021-09-14

In View of the Upcoming Apple Event, TrendForce Presents Its Latest Estimates on Smartphone Production and Shipments of Other End Devices for 2021

Apple is set to unveil the successors to its current device lineups at this year’s fall product launch on September 14. Please see below for some of TrendForce‘s latest data pertaining to the global consumer electronics market:

  1. Although the tight supply of certain components due to complications resulting from the COVID-19 pandemic remains Apple’s primary production-related challenge, iPhone production will unlikely be drastically affected. Total iPhone production for 2021 is expected to reach 229.5 million units, a 15.6% YoY increase, with the upcoming iPhone 13 models accounting for about 37%-39% of Apple’s annual iPhone production. In addition, iPhones are also expected to account for about 77% of total annual production of 5G smartphones in 2021, making them the market leader in this segment and representing a drastic increase from 39% in 2020.
  2. Regarding technical specifications, the Pro model of iPhone 13 is expected to include 1TB storage capacity as an optional upgrade. Other improvements over previous models include the adoption of A15 processors manufactured with TSMC’s 5nm+ process technology. All four iPhone 13 models will feature flexible AMOLED + On-cell designs for their display panels, while the Pro series will also feature a 120Hz refresh rate as well as LTPO technology for reduced power consumption. Furthermore, all four models’ primary cameras will be equipped with sensor shift image stabilization. The Pro model, in particular, will have its ultra-wide camera upgraded to a 6P lens, with the addition of autofocus capability as well. Much like the iPhone 12, LiDAR functionality is available only for the Pro model of the iPhone 13 lineup.
  3. In view of the lackluster sales performances of the iPhone 12 mini, which reached EOL ahead of time, the iPhone 13 mini is expected to account for less than 10% of total iPhone 13 production, since Apple will focus its sales efforts on the other three models. TrendForce indicates that the global economy, markets, and personal incomes are all still experiencing the effects of the COVID-19 pandemic, which has also led to price hikes for electronic components and transportation services, thereby compounding Apple’s difficulties in setting retail prices for the new iPhone models. TrendForce expects Apple to continue the aggressive pricing strategy that it adopted for last year’s models in order to attract smartphone buyers, raise its revenue from services via increased handset sales, and make up for the aggressive prices via increased service revenue.

(Cover image source: Apple official website

2021-09-14

Apparent Oversupply of TV Panels Expected to Be Partially Addressed Via Panel Manufacturers’ Production Capacity Adjustments in 4Q21, Says TrendForce

Thanks to their continued capacity expansion and M&A efforts, Chinese panel manufacturers accounted for nearly 60% of the global supply of TV panels in 1H21, according to TrendForce’s latest investigations. These suppliers have not only managed to dominate their global competitors, but also become the key determinant of the supply and demand situation in the TV panel market. TrendForce believes that, while the TV panel market has started to experience a bearish trend, the industry must pay close attention to whether Chinese suppliers will eschew their previous strategy of maximum capacity utilization and instead turn to other options in order to maintain the health of the overall market. Taiwanese and Korean suppliers, on the other hand, have opted for a strategy that optimizes their existing operations by reallocating some of their production capacities from TV panels to other product categories such as IT panels. In addition to raising these suppliers’ competitiveness through better product differentiation, the reallocation of production capacity also alleviates the suppliers’ pressure of having to rely solely on TV products to expend their panel capacities.

Because the TV panel market’s out-of-balance supply and demand situation is unlikely to be resolved on its own, certain panel manufacturers have already begun assessing the feasibility of adjusting their production capacities for 4Q21. In particular, Gen 8.5 and Gen 10.5 production lines, which manufacture the majority of TV panels, play a key role in ensuring balance between the market’s supply and demand. While panel suppliers are expected to independently reduce their current capacity utilization rates, their new production lines will also gravitate towards a slowdown in panel output. Furthermore, ongoing issues with the supply of glass substrates will also constrain the capacity utilization rates of certain panel suppliers.

Taking the above considerations into account, TrendForce expects Gen 5 (and above) production lines to contribute to the supply of all display panels, measured by total panel area, by 2.5% less than previously expected for 4Q21. As well, in order to alleviate the pressure of excess production capacity for TV panels, panel suppliers will not only increase the share of 85-inch (and above) TV panels in their current output, but also reallocate some of their production capacities from TV panels to IT panels, including desktop monitor panels and notebook panels, both of which are currently in demand. These aforementioned assumptions would suggest that total TV panel input by area is expected to undergo a 2.1% QoQ decline for 4Q21. In particular, Gen 8.5 lines, which account for much of TV panel manufacturing, will experience the most noticeable capacity reduction at an 11.5% QoQ drop for 4Q21.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

2021-09-11

Chipbond and UMC will likely strengthen their product R&D and market penetration via strategic partnership

Leading driver IC OSAT company Chipbond and major foundry UMC announced on September 3 that the two companies established a strategic partnership via a stock swap, through which UMC (and its subsidiary UMC Capital) will hold 9.09% of Chipbond’s equity, while Chipbond will hold 0.62% of UMC’s equity. TrendForce believes that this strategic partnership will not only strengthen the two companies’ presence throughout all parts of the driver IC supply chain, but also kick-start a business model that involves the simultaneous development of RF front-end ICs and power devices in the third-generation semiconductor industry.

TrendForce further indicates that, although Chipbond has traditionally dominated the panel driver IC OSAT package and test industry along with ChipMOS, recent aggressive attempts at seizing market share by major OSAT companies from China have persuaded Chipbond to expand its business to other markets, such as PA (power amplifier) or electronic filter packaging, in order to diversity its previously specialized operations. The strategic partnership between Chipbond and UMC is also noteworthy because demand has been constantly growing in the third-generation semiconductor market.

Most of the predominant companies in the third-generation semiconductor industry are major IDMs based in Europe, the US, and Japan. As for foundries, they generally play the role of fulfilling excess client orders outsourced by IDMs whose capacities are fully loaded.

Regarding the technological competencies of foundries in the power devices industry, Taiwanese foundries (including TSMC, VIS, and EPISIL) possess the competitive advantage in terms of manufacturing processes, while WIN and AWSC are also among the most representative foundries in the RF front-end segment.

Although UMC slightly lags behind some of its other competitors in the aforementioned markets, its subsidiary Wavetek has been actively strengthening its competencies. For the RF front-end segment, Wavetek is making strides towards 5G PA manufacturing by leveraging its existing 4G PA successes. On the other hand, Wavetek is also in the midst of developing its own GaN on Si power devices.

It should be pointed out that the production of back-end components such as power devices and RF front-end remains relatively low in scale. Hence, in consideration of order volumes, profitability, and equipment costs, major OSAT companies such as ASE and Amkor generally are unwilling to fulfill package and test orders for these components, most of which subsequently fall to either foundries or IDMs.

For Chipbond, which is attempting to enter the power devices and RF front end markets, the aforementioned situation spells good news, as Chipbond has to compete with only mainstream foundries and IDMs. In spite of the relatively low volume of client orders, the room for profitability is still there. Second of all, by partnering with major upstream foundry UMC, Chipbond’s third-generation semiconductor packaging and testing capacities can be secured and stabilized.

On the whole, TrendForce believes that the strategic partnership between Chipbond and UMC can be said to result in a win-win situation with regards to both revenue and industrial integration, since Chipbond now receives an infusion of cash that can facilitate its R&D into third-generation semiconductor, while UMC on the other hand also benefits from the partnership as upstream IDMs may now be incentivized to input wafers at UMC’s fabs.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

(Image credit: UMC)

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