Nov 8, 2023 2:37:44 PM

From the Source’s Mouth is Fusion Worldwide’s analysis of semiconductor manufacturers’ quarterly earnings call transcripts. This report provides insights into upcoming demand, capacity, and supply trends based on market information directly from the source.  

  • AMD noted inventory levels in the PC market have normalized, with demand returning to seasonal patterns and increasing client revenue. 
  • Samsung plans to make additional cuts in DRAM and NAND production, with NAND seeing the more significant reductions. 
  • Silicon carbide (SiC) was top of mind for onsemi and Wolfspeed. Onsemi targets a 25% market share by year-end, while Wolfspeed became the only pure-play vertically integrated SiC company. 
  • Lattice forecasts that automotive and industrial markets will soften moving into 2024. MPS also noted volatility in the automotive market due to inconsistencies in the advanced driver assist system (ADAS) business. 
  • Hitachi and Seagate highlighted concerns with demand from China’s market, but Seagate highlighted positive demand in orders for video and image application technologies. 
  • Benchmark and STM forecast a decline in industrial due to softening demand in international markets. 

From the Source’s Mouth is updated throughout the quarter. The table below summarizes key takeaways from Q3 earnings calls, which began on October 18th and runs through December 8th, 2023.


Advanced Micro Devices, Inc. (AMD) October 31, 2023

Key Takeaways:

  • Q3 Revenue was $5.8B 
  • Profits Increased 8% QOQ, Driven by Client and Data Segments. 
  • Strong Demand Recorded for 4th Gen EPYC and Ryzen 7000 Processors. 
  • Data Center and Client Segments are Forecasted to Increase in Profits, While Gaming and Embedded Will Decline. 

Q3 was a significant quarter for AI product development, as AMD achieved multiple milestones for AI hardware and software road maps. 

  • More than 50 notebook designs powered by Ryzen AI are now on the market. 
  • AMD is working closely with Microsoft to use on-chip AI Engines and enable the biggest advances in the Windows user experience in over 20 years. 
  • Numerous hyperscale customers are deploying the Instinct MI300 accelerators, supported by the latest ROCm software suite, growing the adoption of an open hardware-agnostic software ecosystem. 

Results by segment were as follows: 

  • Data center profits were flat YOY but up 21% QOQ thanks to both the 3rd and 4th Gen EPYC processor families recording record quarterly server processor revenue.  
  • Client revenue increased 42% YOY and 46% QOQ, thanks to sales of the Ryzen 7000 processors as inventory levels in the PC market normalized and demand returned to seasonal patterns. Revenue from the latest generation of client CPUs more than doubled. 
  • Gaming revenue declined 8% YOY and 5% QOQ as lower semi-custom revenue was partially offset by increased sales of Radeon GPUs. Overall revenue for this console generation continues to track significantly higher than the prior generation based on strong demand for Microsoft and Sony consoles. Gaming graphics revenue grew both YOY and QOQ. 
  • Embedded revenue decreased 5% YOY and 15% QOQ as lead times normalized, and customers focused on reducing inventory levels. Despite the decline, AMD sees strong growth opportunities for Embedded business based on significant design win traction and our broad and differentiated portfolio of embedded FPGAs, CPUs, GPUs and adaptive SoCs. However, this segment is expected to decline sequentially, as customers continue to work through inventory in the first half of 2024. 

Other market highlights were as follows. 

  • Cloud demand was mixed this quarter. EPYC CPU revenue grew by double-digit percentage points QOQ thanks to hyperscale deployment of EPYC processors. 
  • Server CPU revenue share was boosted by 4th Gen EPYC CPU revenue growing over 50% QOQ, representing most server processor profits and unit shipments. 
  • Nearly 100 new AMD-powered cloud instances launched in the quarter from Amazon, Google, Microsoft, Oracle, Tencent, and others. This included multiple general instances that deliver leadership performance for general purpose, HPC, bare metal, and memory-optimized workloads.  
  • The majority of enterprise demand remained soft, however, the performance of Genoa products boosted enterprise revenue by double-digit growth QOQ. 
  • The firm closed multiple new wins with leading automotive, aerospace, financial services, pharmaceutical, and technology customers, and the number of enterprise customers actively testing EPYC platforms on-premises increased significantly QOQ. 

On the hardware side of AMD’s business, the MI300A and MI300X accelerators are progressing and exceeding expectations performance-wise. Production shipments of Instinct MI300A APUs started earlier this month. Shipments of the Instinct MI300x GPU accelerators to lead cloud and OEM customers will begin before year-end. 

On the software side, AMD further expanded its AI software ecosystem. Based on the progress made with AI roadmap execution and commitments from cloud customers, AMD expects Data Center GPU revenue to be approximately $400 million in the fourth quarter and exceed $2 billion in 2024 as revenue ramps up throughout the year. 

Revenue for Q4 will be $6.1B, up 9% YOY and 5% QOQ. A few notes on the outlook for Q4 and 2024: 

  • AMD is well positioned to benefit from the PC market returning to seasonal patterns, as well as forecasts that the company will gain a profitable share in the premium and commercial portions of the market. 
  • Data center and client segments will increase YOY and QOQ by double-digit percentages. 
  • Gaming and embedded segments will decline YOY and QOQ by double-digit percentages. 


Samsung Electronics Co October 31, 2023

Key Takeaways:

  • Q3 Revenue was $49.88B. 
  • Main Drivers in Q3 Were New Smartphone Models and Sales of Premium Display Products. 
  • NAND and DRAM Production Adjustments Will Continue, With Heavier Reductions Impacting NAND. 
  • Component Demand Forecasted to Improve Within PC and Mobile. 

Overall, the memory market somewhat recovered sequentially this quarter. Samsung stated the following regarding the general health of this segment. 

  • The rising adoption of high-density products for PC and mobile offset weakness in conventional server sales. 
  • Purchase inquiries increased after the industry-wide production cuts. 
  • HBM and DDR5 sales expanded in Q3. 
  • Legacy product inventory levels are still high, and Samsung plans to further reduce production to reach a better equilibrium between supply and demand. 
  • Server demand is still sluggish for conventional servers as IT investments remain limited. However, AI-oriented, high-density, high-end product trends remain strong. Customers have consequently been seeking to secure more component inventory as the market is cognizant of the industry reaching the bottom of this cycle. 

Samsung’s S.LSI business, the company’s only fables division focused on next-generation semiconductor solutions, had sluggish demand due to economic downturn and inflation. Similar results were also recorded in Samsung’s foundry business. Notes on developments in this market: 

  • Demand was slow for mid- and low-priced smartphones. 
  • Completed the development of E2400, which improves CPU, GPU and NPU performances. 
  • Stagnant line utilization following delayed recovery of market conditions had a major impact on foundry profits, particularly for mobile applications. However, advanced and mature node demand was strong and led to an increase in orders from new customers. 
  • CapEx is concentrated on generative AI and supporting rising purchasing activity. 
  • The backlog from design wins, especially on HPC, reached a new quarterly high. 

Display Company saw a QOQ increase after an uptick in seasonal demand and new products launched by major smartphone makers. 

Meanwhile, in the DS division, PC and mobile are expected to improve as customer inventories have normalized.  

Packaging is also seeing an increase in attention as multiple domestic and overseas HPC customers have submitted more orders, including requests for one-stop turnkey services encompassing logic, HBM, and 2.5D interposer. Mass production and further expansion for these products is expected to begin in 2024. 

The outlook for Q4 is as follows: 

  • Considering the normalization of the industry inventory level, expect the recovery trend in the memory market to accelerate. 
  • In PC and mobile applications, amid normalized and finished goods inventory, component demand is likely to improve. This is thanks to the effect of peak seasonality, including year-end promotion and launches of new smartphones by major mobile customers. 
  • Expect to see a positive demand effect coming from the trends of high-density penetration for both speech and mobile devices, which has been accelerating more than forecasted. 
  • Plan to proactively address the rising demand for new interfaces, such as DDR5, LPDR5X, PCI Gen 5, and UFS 4.0.  
  • For DRAM, the high-end trends in the flagship and high-end segments are expected to continue due to the spread of on-device AI. Smaller reductions are planned for DRAM. 
  • For NAND, the trends toward high density based on price elasticity are expected to vary. Further reductions in NAND will be implemented. 


ON Semiconductor Corporation (onsemi) October 30, 2023

Key Takeaways:

  • Q3 Revenue was $2.18B. 
  • Automotive and Industrial Achieved Record Revenue, Driven by Silicon and Silicon Carbide Demand. 
  • Softening Demand Amongst Tier 1 Customers in Europe is Leading to Cautious Forecasts for Q4. 
  • Q4 Revenue will be Between $1.95B - $2.05B. 

Onsemi’s expansion in silicon carbide (SiC) boosted results this quarter as three of the companies’ factories had record output in Q3. Commentary on SiC included: 

  • Onsemi expects to have more than a 25% share of the SiC market by the end of the year. 
  • Onsemi is already producing over 50% of its own substrates internally,  one quarter ahead of schedule. Despite plans to transition furnaces for 200-millimeter production next year, the company will maintain this level of production through 2024. 
  • EV traction is the fastest part of the SiC business, with 70% QOQ growth recorded this quarter. 

In addition to onsemi’s success in SiC, the company is the #1 in automotive image sensors and in industrial scanning. Design activity for this quarter has surpassed all of 2022, which will be a long-term driver for profits as 40% of image sensing revenue comes from new products. 

Similar to onsemi’s broad-based competition, the industrial end market has seen more weakness over the last quarter. However, onsemi noted a few strengths unique to its product portfolio. 

  • Renewable energy and energy storage have performed well and are not forecasted to slow. 
  • Medical has also seen an uptick in demand, which is specifically stemming from accessibility of the continuous glucose and hearing aid developments. 

On the topic of inventory digestion, Tier 1s in Europe are still struggling with excess supply. This is driven by end-user demand and high inflation rates. On the SiC side of the business, outlooks for 2024 forecast that revenue will be flat or slightly down.  


Lattice Semiconductor October 30, 2023

Key Takeaways:

  • Revenue was $192.17M, up 1% QOQ and 11% YOY. 
  • The Sequential Increase in Revenue was Driven by Communications and Computing. 
  • Industrial and Automotive Markets are Expected to Soften in Q4. 
  • Q4 Revenue will be in the Range of $166M - $186M. 

Despite macroeconomic challenges this quarter, revenue in the communications and computing market increased 6% sequentially. A few notes on this end market: 

  • Growth in data center servers for general purpose and AI-optimized applications boosted results this quarter. 
  • This trend will continue into Q4, although slightly offset by softer demand in 5G telecom infrastructure. 

In industrial and automotive, revenue declined 5% sequentially but did increase 28% YOY. 

  • Softness in this market was the result of broader industry trends and is expected to continue into Q4. 
  • However, long-term industrial and automotive will be a growth driver, particularly within automation and robotics as well as advanced driver assist systems (ADAS) and infotainment systems. 

Lattice is in the midst of its largest product portfolio expansion in its history. Some of the newest devices include: 

  • The industry’s first FPGA in its class with integrated USB functionality, applicable to many use cases. 
  • The new Lattice Avant platform, which creates new greenfield revenue opportunities. There will be 2 Avant device family launches in early December. 
  • There are also plans to share details about additions to the company’s software portfolio at the developer’s conference taking place in December. 

Forecasts for next quarter are leaning towards the following trends: 

  • Softening demand in industrial and automotive, largely localized to Asian markets. In terms of lead times, there isn’t much difference between the two segments, but there is more focus on industrial because it holds a larger portion of Lattice’s business. 
  • Communication and computing results will likely be flat to down sequentially. 
  • There is mounting interest in Edge AI applications in client devices, which Lattice is already working to support through further engagement with new customers.


Wolfspeed, Inc October 30, 2023

Key Takeaways:

  • Q3 Revenue was $197.4M. 
  • Wolfspeed Became the Only Pure-Play Vertically Integrated Silicon Carbide Company. 
  • Achieved Record 150-Millimeter Wafer Revenue. 
  • Forecasts Strong Automotive Demand, Especially from EV. 

Wolfspeed announced that they would sell their RF business, making them the only pure-play vertically integrated silicon carbide (SiC) company in the world. Some additional highlights from Q3: 

  • On track to achieve 20% utilization at Mohawk Valey Fab in June of 2024. 
  • Working closely with tool vendors to ensure that ramp-up at the Mohawk Valley Fab is sustainable, as silicon carbide technology is complex by nature. 
  • Recorded a new record for 150-millimeter wafer revenue.  

Based on Q3 results, Wolfspeed expects to be the top SiC device supplier for years to come, as it will take some time for the competition to reach the company’s level of scale and product mix. 

A few notes on Wolfspeed’s business outlook: 

  • The increase in production in Mohawk Valley will be partially offset by ongoing softer demand for industrial and energy products, primarily in China and the broader Asia markets. 
  • Automotive demand will remain strong judging by the $2.2B design-ins recorded last quarter. Most of these projects were in the automotive end market with major OEMs and Tier 1s. 
  • The EV industry will remain an important vertical for Wolfspeed, as silicon carbide will enable longer range, faster charging, and lower system costs, which are all key to the success of the transition to EVs.


Monolithic Power Systems, Inc (MPS) October 30, 2023

Key Takeaways:

  • Q3 Revenue was $474.9M, down 4.1% YOY but up 7.6% QOQ. 
  • Enterprise Data, Storage and Computing Demand Expanded Sequentially. 
  • Automotive, Industrial, and Communications Declined Sequentially. 
  • Long-Term Forecasting Remains a Challenge. 

Following patterns set out in previous quarters, overall customer ordering patterns remained inconsistent as requests to delay deliveries persisted. As it stands, end customers are unwilling to commit beyond a certain window and expect lead times under 10 weeks for delivery. This situation continues to make forecasting beyond the next quarter a challenge due to the lack of short-term visibility.  

By end market, MPS recorded the following: 

  • Enterprise Data increased 106.2% QOQ thanks to sequential growth in both GPU and CPU program sales. 
  • Storage and Computing business increased 3.9% QOQ after a rise in commercial notebook sales. 
  • Consumer fell 4.3% QOQ due to declines in TV and home appliance sales, offsetting higher gaming and monitor sales. 
  • Communications dipped 5.1% QOQ because of lower infrastructure sales. 
  • Automotive declined 8.8% QOQ following a drop in advanced driver assist systems (ADAS) and digital cockpit sales. 
  • Industrial experienced a 15.3% decrease because of falling security and industrial meter application sales. 

While MPS does not usually provide outlooks by end market, the company did note that most will experience weakness in demand outside of the boost coming from AI. Automotive may not see much change, but due to the inconsistencies in ADAS business, this is subject to change. 

Q4 revenue will be in the range of $442M - $462M. 


Hitachi  October 27, 2023

Key Takeaways:

  • Q3 Revenue was $17.64B, up 13% YOY. 
  • Digital Systems and Services, Hitachi Energy, and Railway Systems all saw Order Numbers Increase 
  • Delayed Investments from Semiconductor Customers Caused Headwinds for Several Markets. 

Declining profit in Connective Industries due to semiconductor-related customer investment restraints was offset by increased profits in Digital Systems and Services, as well as Green Energy and Mobility. Overall, all of Hitachi’s business segments saw improved results this quarter. 

In Digital Systems and Services, revenue was 7% higher YOY thanks to strong demand in Front Business, IT Services, Services and Platforms, and GlobalLogic. Regarding business dynamics: 

  • Orders increased by 15% YOY. 
  • Large-scale system renewal projects helped boost Front Business profits. 
  • Security, cloud-related services, and services for manufacturing and distribution had a positive impact on IT Services results. 
  • Growth of GlobalLogic, FX impact, recovery of storage sales, and an uptick in domestic cloud services drove Service and Platform demand. 

Green Energy and Mobility expanded by 30% YOY, with orders rising by 31%. Nuclear Energy, Hitachi Energy, and Railways System profits all increased, with Hitachi Energy Expanding 35% and Railway Systems expanding 29%. 

Connective Industries’ revenue rose 1% YOY, mainly based off of sales in Building Systems and digital solutions and products in industrial markets. For the entire business division, orders increased by 4%. A note on the individual performance of the segments in this business: 

  • Building Systems, Industrial Digital, Water and Environment, and Industrial Products all increased. 
  • Smart Life and Ecofriendly Systems, as well as Measurement and Analysts Systems, both declined. Respectively, these declines were driven by weak domestic demand and lower sales of semiconductor manufacturing equipment. 

Since China is Hitachi’s main market for Building Systems, there are some concerns that revenue will be impacted by declining demand. In Hitachi’s other verticals, the company expects to see improvements through year-end. 


Seagate Technology Holdings October 26, 2023

Key Takeaways:

  • Q3 Revenue was $1.45B. 
  • The U.S. Cloud Market Has Rebounded as Order Volume Increased in Q3. 
  • China’s Recovery Continues to Be Volatile Compared to the U.S., but Demand for Video and Image Applications was a Bright Spot.  
  • Higher Seasonal Demand in the Consumer Market Will Drive Q4 Legacy Business. 

Seagate’s earnings results were impacted by softer demand than anticipated in legacy markets this quarter, along with the ongoing cloud inventory correction and weak economic trends in China. These developments resulted in constrained short-term demand for hard drives. 

Commentary on the Q3 landscape, moving into Q4 expectations: 

  • The recovery in China is volatile and challenging to navigate, but Seagate hopes to see cloud inventory consumption match the trends currently happening in the U.S. 
  • The one exception to the lagging markets in China was technology --video and image applications were strong both in China and globally. 
  • AI-related spending is still a near-term priority. Several cloud customers have stated that investments in traditional servers and other IT hardware will likely resume in the upcoming quarters. 
  • Seagate’s Video, Image, and Analytics (VIA) market results were driven by public and private investments in smart city and smart security projects. Seagate’s technology will be key in evolving these systems from basic monitoring tools to incorporating advances like high-definition AI cameras. 

With respect to the movements in the cloud market, activity is beginning to show signs of picking up. 

  • In mass capacity, the high-capacity nearline products are experiencing an uptick in orders from U.S. cloud customers as inventories have been depleted. Seagate is confident that demand will improve further moving into 2024 as cost optimization efforts in this market are nearing an end. 
  • While the U.S. is seeing order volume increase, global cloud customers are still hesitant as they work through heightened inventories. 
  • Even with the macro headwinds, Seagate expects that its larger cap HRAM HDs will diverge from negative trends and drive growth through year-end. 
  • Qualification and ramp-up plans for 30-plus terabyte products are on track, with high-volume ramps beginning to take shape.  

Revenue for the next quarter is expected to be $1.55B. Seagate anticipates the following. 

  • Mass capacity sales will increase slightly, supported by demand for nearline products from both cloud and enterprise customers. 
  • There will be softer sequential demand in the VIA market. 
  • Within the legacy business, projections indicate higher seasonal demand from the consumer market. 
  • Non-HDD revenue will be flat. 


Benchmark Electronics, Inc October 26, 2023

Key Takeaways:

  • Q3 Revenue was $720M. 
  • Despite the Semiconductor Capital Equipment Industry Bottoming Earlier This Year, Revenue is Expected to Remain Flat Through the New Year. 
  • The Aerospace and Defense Industry is on Track to Increase From Q4 Into 2024 Based on Strong Demand Trends. 
  • Delayed Project Deployments Will Cause a Decline in Infrastructure Revenue. 

Aerospace and defense had the best performance this quarter. Revenue increased by 20% YOY thanks to commercial aerospace defense programs ramping up and improvements in supply availability.  

The results for Benchmark’s other market segments were as follows: 

  • Medical revenue increased 8% YOY, fueled by ample supply, allowing Benchmark to fully meet demand. 
  • Industrial revenue increased 9% YOY based on new customer programs in energy efficiency.  
  • Next-generation communications revenue increased 20% YOY, driven by expanding broadband infrastructure programs. 
  • Semi-cap revenue decreased 10% YOY, which proved to be better than industry estimates, which predicted the wafer fab equipment market would decline by 20% or more in 2023. 
  • Advanced computing revenue decreased by 30% YOY. Benchmark completed a significant high-performance computing (HPC) project at the beginning of 2023, so there was a brief pause in Q3, as reflected by the decline. However, a new HPC program will be launched this quarter, which will improve Q4 results. 

Due to current market conditions, customers in certain verticals are moderating forecasts for Q4 and early 2024. Some notes on demand trends by sector: 

  •  Medical will soften as customers begin to rebalance inventories going into year-end.  
  • Semi-cap reportedly bottomed earlier this year, but revenue is expected to be flat through at least the first half of 2024 based on public commentary from Benchmark customers. 
  • Within aerospace and defense, commercial aerospace has improved over the last few quarters. Benchmark forecasts that its engineering services will continue to grow revenue in this market. Additionally,  defense is robust, and numerous supply chain improvements support that. 
  • Industrial revenue will likely decline sequentially due to softening demand in international markets. 
  • Next-generation communications will decline in Q4, thanks to ongoing headwinds from deployment delays. This trend began in Q3 due to macroeconomic sensitivity amongst key customers. 


STMicroelectronics (STM) October 26, 2023

Key Takeaways:

  • RF Communication Demand Supported Microcontroller and Digital IC Revenue. 
  • Automotive and Power Discrete Subgroups Had Double Digit Growth. 
  • Personal Compute Revenue was Lower Than Expected, Reflecting Weak Demand. 
  • Revenue for Q4 Will Be $4.3B. 

Q3 results were at the midpoint of STM’s business outlook range. The results by product group were: 

  • Automotive and Discrete Group (ADG) revenue increased 29.6% YOY thanks to double-digit growth in automotive and power discrete subgroups. 
  • Microcontrollers and Digital ICs Group (MDG) revenue increased 2.8% YOY due to RF communication, but results for all other subgroups in microcontrollers were flat. 
  • IP Multimedia Subsystem (IMS) revenue fell 28.3%. 
  • Analog, MEMS, and Sensors (AMS) revenue decreased as expected because of the lower revenue in personal electronics. 

STM continues to expand its offerings, with production starting for the company’s new gallium nitride transistors, which simplify the design of high-efficiency power commercial systems. Other initiatives this past quarter included: 

  • Introduction of new STGAAP products, specifically designed for power GaN transistors based on STM’s unique IP and advanced BCD technology. 
  • Increased engagements in silicon carbide (SiC), adding four new customers and ten projects since last quarter. Wins here ranged from electrical vehicle applications, such as onboard chargers, to power modules in solar power systems. STM is on track for SiC product revenue to reach $1.2B this year. 
  • Continued design-win momentum in car digitalization, with the later generation of automotive microcontrollers, called Stellar, across key applications. 
  • Announced new ecosystem tools for the STM32 family to support STM’s strategic focus on embedded processing. Also expanded engagements with customers to deploy edge AI for more use cases. 
  • In RF communications, STM is expanding its collaboration with SpaceX’s Starlink. Starlink’s next generation of products leverages STM’s BiCMOS9 processes and highly differentiated packaging technology. 

Guidance for Q4 indicates that net revenue will grow about 7.3% YOY, but the industrial end market in Asia had a lower level of orders at the end of Q3 than expected. This translated to less backlog for Q4, so revenue is subject to change depending on how STM’s end markets perform. 


Renesas Electronics Corporation October 26, 2023

Key Takeaways:

  • Q3 Revenue was $2.52B, Down 2.1% YOY, and Up 2.9% QOQ. 
  • Renesas to Increase Inventory Levels to Capture Short-Term Demand. 
  • IGBT Availability May Fluctuate in Q4 as Support Focuses on Select European and U.S. Customers. 
  • DDR5 Drives Cloud Related Demand. 

Order lead times shrank this quarter alongside channel inventory. Due an uptick in short-term orders, Renesas plans to increase inventory levels to capture those opportunities. A few notes on inventory by end market and channel QOQ: 

  • In-house automotive inventory levels have declined. 
  • In-house industrial infrastructure inventory levels were flat. 
  • Sales channel inventory levels increased across all end markets by over 9 weeks. 

For finished products, Renesas is reportedly shipping based on demand, which was lower than expected in Q3.  

Renesas said the following regarding automotive: 

  • The U.S. automotive strike has yet to have a significant impact, according to the data, but Renesas anticipates a decline in Q4 or next year. 
  • Automotive customers in Europe are tightly controlling inventory. Since many tier-one customers are concentrated here, the region may significantly decline. Japan and China’s automotive businesses are expected to trend slightly upwards. 
  • Capacity conditions have kept Renesas from expanding sales of power products, mainly IGBTs. There may be some fluctuations in availability in Q4 for IGBTs due to the company focusing on select customers in Europe and the U.S. Availability will depend on sales and competitiveness. 

Additionally, DDR5 demand has fueled robust growth in cloud-related products. Customers are still digesting DDR4 inventories, but overall, cloud data center growth is expected to continue. For the PC market, the overall trend is pointing towards recovery, but this will be affected by seasonality and may not hold.


Intel Corporation October 26, 2023

Key Takeaways:

  • Q3 Revenue was $14.2B, Up 9% QOQ. 
  • FPGAs Entering a Period of Inventory Burn. 
  • Client Computing Revenue Increased 16% QOQ Thanks to Commercial and Gaming. 
  • Network and Edge Markets Show Signs of Recovery, But Network is Still Navigating Persistent Weakness. 

Revenue for all of Intel’s major lines of business exceeded expectations:  

  • Client Computing Group (CCG) increased 16% QOQ, driven by customer’s inventories reaching healthy levels and stronger average selling prices (ASPs). Commercial and gaming products had the strongest demand in this segment. 
  • Data Center and AI (DCAI) revenue surpassed forecasts despite continued unit TAM softness. Xeon business increased sequentially. Even with a sequential revenue decline, DCAI returned to profitability thanks to better ASPs, reduced factory underload charges, and spending discipline.  
  • Network and Edge (NEX) revenue increased 6% QOQ with edge markets showing signs of demand recovery. Alternatively, network and telecom markets are still navigating elevated inventory and weak demand. Server revenue did increase modestly QOQ. 
  • Mobileye increased its FY 2023 outlook thanks to strong Q3 performance. Also, Intel added TSMC as a minority investor in IMS nano fabrication. 
  • Foundry Services grew 4x YOY and increased 34% QOQ thanks to increased packaging revenue and higher IMS tool sales. 

Intel continues to plan for new AI products and applications, stating that Xeon’s strength will support moderate sequential growth for DCAI.  

FPGA business underwent a period of rapid growth and tight supply this year. However, this market is now entering a cycle of inventory burn -- so demand will be lower.  

Key operational milestones for the quarter: 

  • Intel 7 produced nearly 150 million units of Alder Lake, Raptor Lake, and Sapphire Rapids. In addition, Emerald Rapids has been released and began shipping this month. 
  • Intel 3 is on track to be ready for manufacturing by year end, which will support Sierra Forest and Granite Rapids production. 
  • Intel 4 began initial shipments of Meteor Lake and is ramping up to manufacture the most productive fleet of EUV tools in the industry. 

Q4 revenue is projected to be between $14.6B - $15.6B.  


Flex Ltd. October 25, 2023

Key Takeaways:

  • Q3 Revenue Was $7.5B. 
  • Flex is Pivoting to Focus on Next Gen Mobility, Cloud, and Digital Health.  
  • Renewables Business Grew Despite Soft Demand in Residential Solar. 
  • Revenue for Next Quarter Will be Between $6.5B - $6.9B. 

Overall, Flex manages six markets, but the company is shifting its priorities to focus on next gen mobility, cloud, and digital health. Within the Cloud market, Flex noted: 

  • Expansion in the cloud market was offset by the pressures in communication, enterprise IT, and consumer markets.  
  • Cloud is expected to grow 20% each year based on the ability to manufacture vertically integrated data center racks and critical power systems for the data center. 
  • As many manufacturers have reported, growth has been driven by generative AI capability expansion.  

Expansion in the cloud market was offset by the pressures in communication, enterprise IT, and consumer markets. Related to these segments, Flex noted: 

  • Original forecasts for the consumer market predicted less of a decline, but overall predictions for the year now show that consumer will fall a total of 25%. 
  • Inventory digestion continued to plague the communication infrastructure market, leading to an overall decline of 10% for 2023.

For the next six months, Flex foresees next-gen mobility, cloud, and health solutions as the strongest markets. While the automotive industry has delivered strong results, but there may still be an impact from the on-going automotive strike in the U.S. Flex is consequently cautious in regard to overall growth for automotive. 


Celestica Inc October 25, 2023 

Key Takeaways:

  • Q3 Revenue Was $2.04B, Up 6% YOY. 
  • Significant Proprietary Compute Demand will be a Major Driver in 2024. 
  • Aerospace and Defense, Plus Healthcare, Had Strong Demand in Q3. 
  • Q4 Revenue Will be Between $2B - $2.15B.

Q3 revenue was at the high end of the guidance provided in Q2, with both of the company’s most prominent segments increasing YOY. However, advanced technology solutions (ATS) also experienced helpful tailwinds from new program ramps and robust aerospace demand. 

By segment, Celestica recorded the following results: 

  • Advanced technology solutions (ATS) revenue fell 1% QOQ but increased 12% YOY. 
  • Connectivity and cloud solutions (CCS) revenue increased 10% QOQ and 2% YOY. 
  • Connectivity and cloud solutions were supported by increased revenue from hardware platform solutions (HPS) customers.  
  • The Compute strength was offset by softness in Communications revenue fell by 10% YOY and the market will remain soft through2023 while resuming growth in 2024. 
  • Enterprise revenue increased by 20% YOY. 

Some key developments:  

  • Hyperscale customers drove strong demand for Celestica’s primary compute products and made significant investments in data center capacity. 
  • Observers suggest that the industry may be in the early days of positive a long-term secular trend, accompanied by a major hardware upgrade cycle to support AI applications and the resulting increase in data center traffic. 

Within the HPS segment, revenue should increase due to robust network demand as some of Celestica’s hyperscalers have begun increasing their networking gear orders. Further notes on demand: 

  • Celestica believes we are nearing the end of the inventory burn that has characterized many segments throughout 2023 with at least one customer beginning to expand inventory instead of reducing it. 
  • Expect networking to pull through the slump thanks to higher demand for proprietary compute products as well as the ramp-up of new 800G platforms in the second half of 2024. 
  • Aerospace and defense (A&D) business continues to be strong, with a healthy backlog. Most challenges in this vertical stem from tool availability. Overall, A&D grew over 30% YOY. This momentum is expected to continue in 2024. 
  • Additionally, Celestica has seen solid growth in HealthTech, which was supported by ramping up new programs in surgical instruments and imaging devices. 

When asked about macro-conditions impacting the greater industry, Celestica stated that the company is not feeling the effects of those conditions due to the following reasons.  

  • In particular Celestica has less exposure to the consumer markets, which have taken a hit this year in terms of demand. Consequently, revenue results have fallen for other companies more involved in this industry. 
  • A limited impact from interest rate hikes as projects are not highly subject to these fluctuations. 

Celestica did report some headwinds: 

  • Industrial is slowing down incrementally due to decreasing activity in the EV chargers. However, EV Chargers represent only 2% of Celestica’s product catalog. 
  • Capital equipment was impacted by the continued soft demand across the broader wafer fab equipment market, compounded by highly complex US-China trade restrictions affecting the wider semiconductor industry. Underlying market demand in capital equipment will be flat YOY. 


Teradyne, Inc. October 26, 2023

Key Takeaways:

  • Q3 Revenue was $704M, Q4 is Expected to be Between $640M - $700M. 
  • Robotics Exceeded Expectations to Increase 10% YOY, Revenue Returning to 2022 levels. 
  • Memory Set to Recover in 2024 Due to HBM, DDR5, and LPDDR5. 
  • Uncertain Smartphone Demand Makes Mobility is Most Unpredictable Market due to Uncertainty in Smartphone Demand 

Q3 sales were at the high end of guidance, with robotics exceeding expectations despite supply constraints. Compute, automotive and industrial analog segments are expected to in comparison to 2022. Meanwhile, the weakest segment of the system on chip (SoC) test market is mobility. In memory test, high-speed DRAM demand remains high.  

By segment, Teradyne saw the following results: 

  • Semiconductor test was impacted by the mobility correction cycle. Shipments remained below historic levels.  
  • Memory test shipments fell due to the timing of shipments, but demand stayed strong, driven by LPDDR5 and HBM. Automotive test shipments were high in Q3.  
  • Wireless was muted due to weakness in the smartphone market and lack of new wireless standards. Production board test also softened. 

Within Teradyne’s System Test Group, defense and automotive will increase 10% YOY. However, other segments in this group were impacted by over-supply in HDD and softness in Mobility. 

Lead times continue to decrease as a result of supply and demand coming into balance. This trend will materialize further in Q4, but Q1 is when the company expects to see the lowest lead times and more book-ship variability. 

In terms of market recovery, Teradyne stated: 

  • Mobility is the biggest question mark because the rebound depends on smartphone unit growth and how quickly the industry can absorb idle test capacity. 
  • The Automotive Test market has sustained demand, channel inventories are stabilizing and there appears to be spots of weakness. However, the full-year market size for 2024 will not change significantly because of bullish forecasts driven by the cross-over from internal combustion to EV. 
  • Memory will grow thanks to HBM, DDR5, and LPDDR5 demand expanding to support AI and computing. Flash package test is expected to grow as well. 
  • Wireless business growth will depend on the handset industry, recovery in the PC market, and the rollout of Wi-Fi 7. The HDD supply-demand imbalance will continue into 2024 but HDD test will remain weak. System-level test will depend on smartphone unit growth in the near-term, but defense and aerospace will increase. 
  • Robotics’ operating model is built for the long-term, prioritizing product and support investments. The 10% YOY revenue increase recorded this quarter indicates positive momentum moving into 2024.


United Microelectronics Corp. (UMC) October 25, 2023

Key Takeaways:

  • Q3 Revenue was $1.76B. 
  • Computing and Communications Saw Highest Demand. 
  • Foundry Declined Significantly, but PCs and Smartphones have Stabilized. 
  • Automotive Is Still Grappling with Inventory Surplus, foreshadowing a Q4 Decline 

Results this quarter were driven by strength in Computing and Communication. By end market, LCD controllers, Wi-Fi, Codec, and Touch IC controllers propelled Computing. Shipments in Communication also increased, thanks to demand for RF front-end IC and networking chips. A few additional notes on demand: 

  • Regionally, Asia has maintained the largest portion of UMC’s business at around 58%, growing 2% sequentially.  
  • Japan declined by 2%.  
  • European and North American business was flat.

Subsequently, the Chinese PC Chinese segment will be flat. Expect a higher-than-expected inventory buildup for automotive, which is leading forecasts to expect a decline in revenue in Q4.  


MaxLinear, Inc (MXL) October 25, 2023

Key Takeaways: 

  • Revenue was $135.5M, Down 26% QOQ and 53% YOY. 
  • Infrastructure was a highlight, particularly wireless., pulling in $50M this quarter.  
  • Typical Lead Times Have Normalized and Average 16 – 18 Weeks. 
  • Channel Inventory Correction is Ongoing and Significantly Impacting Broadband and Wi-Fi Markets. 

The Q3 results and Q4 outlook reflect the ongoing channel inventory correction. 

 A few notes on the infrastructure market. 

  • YOY infrastructure increased 40%. For Q3 revenue totaled $50M. 
  • Key Q3 demand drivers were products for the expanding 5G global rollout, including: new millimeter wave backhaul technologies, multi-band, hybrid millimeter wave, and microwave backhaul radios. 
  • Despite long term strength, revenue is expected to dip in Q4. 

In high-speed optical data center interconnect, the ongoing adoption of AI for cloud applications is driving design win activity. MXL made the following comments related to AI. 

  • MXL has ongoing qualifications in multiple hyperscale enterprise opportunities, which the company will be ramping up in mid-2024. 
  • The company announced a new product that will enable best-in-class power consumption for optical transceivers and active optical cables for datacenters, AI, and machine learning platforms, and high-performance computing applications.

Some highlights for the connectivity market: 

  • MXL forecasts strong early revenue results for 2024 based on robust design activity for the company’s Wi-Fi 7.  
  • Additions to the company’s portfolio of Ethernet connectivity products have opened their addressable market by 300M through 2027.
  • MXL’s new ethernet connectivity products address the needs of both the enterprise and server message block (SMB) switch markets, as well as the gateway and router markets. 

Within the broadband market, the near-term demand environment is challenging, but long-term outlooks are solid as the industry will be migrating from legacy DSL and older PON technologies to 10-gigabit PON fiber access. Commentary surrounding forward thinking statements:  

  • Solid product innovation and execution in Wi-Fi, fiber broadband, access gateways, Ethernet and wireless infrastructure is positioning MXL well across a number of exciting emerging markets. 
  • Connectivity and industrial multi-market revenue will increase, while broadband and infrastructure will be down QOQ. 
  • Total revenue will be between $115M - $135M


Texas Instruments Inc. (TI) October 24, 2023 

Key Takeaways: 

  • Total Revenue Was $4.5B, Flat QOQ and Down 14% YOY. 
  • Automotive Growth Persisted, While the Industrial Market Fell in the Mid-Single Digits Sequentially.  
  • Communications Fell 50% YOY, due to the Choppy Nature of Market. 
  • Despite Carrying Heightened Inventory Levels, TI Continues to Invest in CapEx. 

Due to increased inventory, Texas Instruments (TI) lowered factory starts this quarter. This decision impacted the quarterly outlook because of additional charges added to the company’s income statement. By market, TI saw the following results: 

  • Industrial dropped in the mid-single digit range QOQ, with weakness across nearly all sectors. YOY industrial decreased in the mid-teen percentage range.  
  • Automotive was up in the mid-single digits QOQ. YOY automotive increased by 20%. 
  • Personal electronics was up about 20% QOQ. YOY personal electronics fell 30%. 
  • Communications equipment was down in the upper teen range QOQ. This segment fell by 50% YOY, attributed to the standard choppiness of this particular market. 
  • Enterprise systems increased in the upper single digit range QOQ. Enterprise systems fell 40% YOY. 

Shifting forecasts and pervasive oversupply challenges resulted in TI slowing down fab starts and chip production this past quarter. However, TI is confident that they can navigate the situation as the vast majority of their 80,000 products sell to a wide range of customers. This diversity, combined with a long shelf life, is why they are comfortable holding higher inventory levels -- they believe it will move quickly once demand rebounds across different customer bases. 

Now that TI is carrying larger inventory levels, lead times are coming down and normalizing compared to the years prior. There are still pockets of hot spots where lead times are longer, but the company’s flexible manufacturing plans will ease pressure on these products. 

On a regional basis, Chinese market demand remained weak, including in the industrial market where there were expectations of a rebound. The only region that saw an increase was Japan. 

TI stated that the company continues to operate in a weak environment in general, so results will be flat QOQ. However, despite the weakness in demand, TI will not adjust production capacity, as they expect a turnaround in Q4 or early 2024. 


Taiwan Semiconductor Manufacturing Co. (TSMC)October 19, 2023

Key Takeaways:

  • Total Revenue was $17.3B, a Sequential Increase of 13.7%. These results were Supported By Demand for 3-Nanometer and 5-Nanometer Technology. 
  • Customer Inventory Adjustments Continue to Cause Headwinds. 
  • Early Signs of Stabilization Are Appearing in PCs and Smartphones. 
  • Automotive Revenue Decreased by 24% Due to Customer’s Entering Inventory Adjustment Mode. 

A higher capacity utilization rate and more favorable exchange rate pushed gross margins higher, although these strong results were offset by the initial ramp-up of TSMC’s 3-nanometer technology. This ramp-up will support the growth of the semiconductor industry in the future, despite customers remaining cautious in inventory control at the moment. The fabless semiconductor industry has continuously reduced its inventory this quarter, but persistent macroeconomic concerns and slow recovery in China have remained an issue. TSMC’s revenue breakdown by technology this quarter: 

  • 3-nanometer contributed 6% of wafer revenue, with N3 demand coming from customers using the technology for HPC and smartphone applications.  
  • 5-nanometer contributed 37% of wafer revenue, with N5 demand driven by AI and smartphone customers. 
  • 7-nanometer contributed 16% of wafer revenue. N7 was impacted by a decline in demand from smartphone customers not using this technology, as one major customer delayed their product introduction. TSMC expects to backfill N7 demand through demand from consumer, telecommunication, and connectivity customers. 
  • Advanced technologies, defined as below 7-nanometer, accounted for 59% of wafer revenue. 

Overall revenue was broken down into five major categories: 

  • HPC increased 6% QOQ to account for 42% of total revenue. 
  • Smartphone increased 33% to account for 29% of total revenue. 
  • IoT increased 24% to account for 9% of total revenue. 
  • Automotive decreased by 24% to account for 5% of total revenue. 
  • DCE decreased by 1% to account for 2% of total revenue. 

While AI-related demand continued to be strong, it was not strong enough to offset the overall cyclicality of TSMC’s business. However, TSMC still believes that HPC will be its most robust market and growth contributor over the next several years. TSMC has also identified the consumer industry, mainly smartphone, as the second largest segment of their business. 

The decline in the automotive market was driven by the industry entering inventory adjustment mode in the second half of the year. However, activity should pick back up again in 2024 thanks to electric vehicles and the implementation of more functionality. 

In terms of expansion, TSMC continues to widen its global footprint. Highlights: 

  • Announced a specialty technology fab in Dresden, Germany, focusing on automotive and industrial applications. Construction is scheduled to begin in the second half of 2024, with production beginning in late 2027. 
  • The Phoenix, Arizona lab is progressing well on infrastructure, utilization, equipment installation, and personnel. TSMC is on target to deliver volume production of N4 process technology in the first half of 2025. 
  • Built a specialty fab in Japan, utilizing 12- and 16-nanometer and 22- and 28-nanometer process technologies. Volume production is on track for late 2024. 
  • Received an extension from the U.S. Bureau of Industry and Security to continue operations in Nanjing. 


ASML Holding October 18, 2023 

Key Takeaways:

  • Shipped 10 EUV Systems in Q3 and Achieved $6.7B in Revenue.  
  • Net System Bookings Were Driven By Logic (80%) and Memory (20%). 
  • Bookings Were Lower Than Previous Quarters, But Backlog Remains Extensive. 
  • Recovery Cycle for Semiconductor Industry Predicted to Begin in 2024. 

ASML's two primary business segments, EUV and DUV sales, were driven by Logic customers, who accounted for 80% of net system bookings. For the EUV side of the business, ASML had the following updates: 

  • Shipped a total of 10 systems. 
  • Customers continue to delay productivity and performance upgrades. 
  • EUV revenue expanded by 25% YOY. 

For DUV updates, ASML stated: 

  • DUV is expected to grow by 55% YOY by year-end, an increase from the 50% forecasted last quarter. 
  • Growth will be driven by immersion revenue. 
  • China's demand for DUV is robust. However, customers in China have received fewer systems than were ordered due to processing time. 
  • Most shipments for Chinese customers this year were from orders booked in 2022. However, supply is catching up to demand, thus the increase in lithography machines for mature and mid-critical nodes.  

Concerning China, ASML is complying with the latest U.S. export control regulations. There may be a mid to long-term impact on the regional split of ASML's business. 

ASML's remaining business segment, the installed base, had slightly lower results. Tailwinds were the result of market uncertainty and lower utilization rates. Revenue in the installed base business will consequently decline by about 5% YOY for 2023. Some of the key factors that will drive future success for ASML: 

  • Secular growth drivers in semiconductor end markets, notably the energy transition, electrification, and AI. 
  • China is especially hungry for renewable energy, with over 50% of all worldwide investments in renewable energy coming from China. Demand for semiconductors shows no signs of slowing as solar, wind, and EV manufacturing continue their buildout. 
  • Expanding application segments are increasing the need for lithography due to future technologies' need for advanced and mature nodes. 

2025 is expected to be a significant year of growth. In addition, existing fabs will add capacity, aided by the continued recovery cycle. ASML's predictions included: 

  • A cyclical upturn will begin in 2024 and last well into 2025. However, ASML note is a chance for demand to pull back in the back half of 2024.  
  • The memory market will begin its recovery by the end of 2023, although the intensity of the recovery remains uncertain. 
  • More than 50% of ASML's 2025 forecasted demand stems from new fabs and expansion in Europe, the U.S., and Asia. 


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