With CY21 Q4 earnings season having concluded in early March, Fusion Worldwide has reviewed semiconductor manufacturers’ quarterly earnings call transcripts to gain perspective on the following:
The table below provides a summary of key takeaways:
MANUFACTURER |
REPORT SUMMARY |
onsemi |
Onsemi is planning to increase the efficiency of its fab network by expanding both capacity for products and its strategic markets. This strategy is anticipated to achieve cost benefits and meet current supply/demand imbalance in the semiconductor industry. Onsemi also noted the following:
|
Intel Corporation |
Intel announced further plans to continue its expansion by investing in new fabs to meet customer demand.
Observes 2021 included two recurring themes: high demand and supply constraints.
Anticipates robust growth in data center and network and edge markets in 2022.
Demand has been tempered by supply chain constraints, such as substrate, component and silicon shortages, which is limiting the shipment of finished systems.
To navigate the supply constraints, Intel has signed long-term agreements with foundry partners and substrate and equipment suppliers. |
Seagate Technology |
In 2021, Seagate experienced a record-high demand from cloud customers, driven by its 18 terabyte nearline products. Hard drives (HDDs) are critical in the data center ecosystem, which in part has contributed to the continued demand Seagate has experienced across its product lines. Supply pressures amid COVID-19 and other related events have been seen to cause mass disruption to shipment plans. In particular, the disturbances have limited capacity and contribute to shortages. To ramp up production to meet demand, Seagate intends to expand its manufacturing and cost benefits efforts.
|
Western Digital Corporation (WD) |
The current complex state of the supply chain has affected Western Digital’s ability to build and ship products. It anticipates the disruptions will subside when the supply chain normalizes, which is dependent on its hard drive (HDD) gross margins in 2022. Technology innovation in the digital market is expected to strengthen storage demand.
For WD’s Flash business, demand was driven by season strength in mobile and consumer sectors.
|
Microchip |
Due to the imbalance between supply and demand, Microchip experienced its highest unsupported backlog in its history in December 2021.
|
QUALCOMM |
Qualcomm notes that demand has been strong across all its technologies and has exceeded supply. The ongoing supply chain disruptions have not eased the imbalance. As a solution, Qualcomm stated its capacity expansion and sourcing initiatives will help improve its supply in 2022. |
Silicon Labs |
Silicon Labs increased pricing across all its product lines, which was in response to existing and anticipated manufacturing cost increases. While Silicon Labs stated its inventory balance was below its target level in 2021, it anticipates higher output in 2022 as a result of capacity expansion. |
STMicroelectronics |
To meet ongoing demand, STMicro plans to increase its production capacity to support its strategic initiatives in 2022. STMicro observed it saw strong demand in the industrial sector in high-end and consumer industrial products. This in part is driven by increased electrification and digitalization in the end market.
|
Vishay Intertechnology |
In 2021, Vishay maximized its production output by expanding its critical manufacturing capacities and setting measurable targets to accelerate growth. This was applied across all global market segments according to the manufacturer's earnings call. Vishay mentions that inflationary pressures impact the costs. The following sectors were large growth drivers in 2021:
Vishay intends to meet supply and demand by balancing its in-house and foundry wafer manufacturing.
|
Taiwan Semiconductor Manufacturing Company (TSMC) |
TSMC anticipates 2022 growth will be due to demand for its advanced and specialty technologies including:
In 2021, supply security was a challenge across the supply chain TSMC notes in its earnings call.
Also, there has been a higher demand for silicon, which is applied in end devices for automotive, PCs, servers, networking and smartphones. This is likely to carry from 2021 into 2022. A major hurdle going into 2022 is the cost challenges in manufacturing:
|
AMD |
In 2021, AMD’s business was driven by the strong demand it saw in premium notebooks and higher-end desktop CPUs. AMD will focus on meeting demand by securing capacity in 2022. |
Texas Instruments Incorporated |
In 2022, Texas Instruments plans to continue to expand its internal manufacturing initiatives. This includes building additional factories to increase its control amid supply chain disruptions. |
Allegro MicroSystems |
Allegro’s initiative to diversify its supply chain minimized the impact of major supply chain delays in 2021. Main sectors accounted for were automotive and industrial.
As seen in 2021, orders continue to outpace supply in 2022 Securing additional capacity will be a key initiative in 2022, particularly as TSMC ramps up its wafer production. Previous capacity constraints are in part due to COVID-19’s impact on Allegro’s Malaysia facilities. An additional constraint factor is industry-wide supply and demand imbalances of wafer supply. Allegro anticipates demand will continue to exceed supply into the near future according to its earnings call. |
Cirrus Logic, Inc. |
Cirrus intends to drive diversification in its product line in 2022. This includes investment in new technologies, such as sensing and power and battery systems. This is in addition to its existing audio and mixed-signal businesses. |
Nvidia |
Strong demand has been driven by emerging technologies for hybrid work environment builds, 3D design, AI, and rendering. Additional business growth seen in Nvidia’s networking products applied for computing, supercomputing, enterprise, and storage. Nvidia plans to improve its capacity to meet customer demand in the coming quarters. |
Analog Devices, Inc. (ADI) |
Analog Devices, Inc. expanded its capacity to meet demand. This included internal manufacturing capacity investments in the US and Europe.
ADI is seeing Industry 4.0 technologies impacting overall business with sensing, edge, processing, and connectivity adding to demand for advanced parts. Some of the higher-demand segments include automotive and communications. |
Applied Materials, Inc. |
Applied Materials’ state-of-the-art logistics service center in Austin, Texas is on track and will open in 2022 as a part of ongoing strategies for improved global infrastructure. Unmet demand for wafer fabrication equipment is continuing into 2022 from the previous year. The essential importance of silicon is evident in how it drives system level, power, performance, and cost improvements that will be highly valuable in digital transformation and pioneering the metaverse.
|
Infineon Technologies |
Target applications for manufacturing capacities and inventory include automotive, industrial, data center and IoT are not predicted to reach supply/demand equilibrium anytime soon. Underlying structural demand is healthy and Infineon is fully booked for 2022. Profitability levels for the December quarter:
Return to office push and platform updates from processor vendors has led to prolonged demand from cloud operators and hyperscalers. |
II-VI Incorporated |
II-VI Incorporated's constraints were linked to COVID-19 and supply issues, resulting in profits beneath the high-end of revenue guidance.
Legacy and new supply lines will increase supply of ICs.
The new year marks the beginning of a multi-year upgrade of U.S. cable TV infrastructure, which is a long-term contract that will power growth based on large fiber-deep initiatives. |
Monolithic Power Systems |
Highlights for 2021 included:
|
NXP Semiconductors |
Strong demand throughout 2022 is anticipated and likely better than earlier predictions. Saw a 700-basis point advancement derived from enhanced factory loadings, elevated revenue and positive leverage on operating expenses. Customer demand is forecasted to overtake improving supply as the inventory across all end markets remains very low. |
Broadcom |
Recovery in enterprise IT spending continued to accelerate enterprise demand.
Inventory in supply for Broadcom and its customers remains lean, with lead times staying extended and unchanged. Semiconductor backlog at the close of Q1 continued to grow double-digits compared to the prior quarter. Networking revenue of $1.9 billion was up 33% year-on-year and represented 32% of semiconductor revenue.
Strong growth has continued in Qumran family of products due to investments in 5G backhaul by telco operators worldwide.
Storage connectivity revenue was $801 million, growth accelerated to 32% year-on-year, representing 14% of semiconductor revenue. |
Marvell Technology |
The acquisition of Innovium adds cloud-optimized switches to Marvell’s feature-rich enterprise and carrier switch portfolio.
Demand continues to be higher than supply, results have been continuously expanding lead times. Industry has turned to active electrical cables to solve issues with short-reach connections.
5G technology rollout and product ramps at multiple gas station customers was a key benefit that led to collaboration with Dell on a new suite of telecom solutions. Includes:
Q4 revenue was driven by SSD controllers, utilized in consumer-oriented platforms like game consoles. Revenue grew well-above long-term target models for the fourth quarter and fiscal year 2022. |