From the Source's Mouth | Q4 2022

MANUFACTURER

REPORT SUMMARY

Earnings Call Release Date

Marvell Technology

Total revenue for the quarter was $1.42 billion, a 6% increase year over year and an 8% decline sequentially. The sequential decline stemmed from the storage product segment within Marvell’s data center end market. Carrier, consumer and automotive industrial revenue all grew sequentially. Meanwhile, enterprise networking declined slightly. 

Data center revenue totaled $498 million for the quarter, a sequential decline of 13% and a year-over-year decline of 13%. However, the total revenue was higher than expected due to a strong showing in PAM DSPs and data center switch orders. Storage represented most of the decrease as customers adjusted their inventory levels in a challenging macroeconomic environment. Forecasts indicate this trend will continue in the short term.  

Guidance indicates data center revenue will decline around 15% sequentially in the next quarter. Production has been delayed for key design wins, contributing to weaker revenue forecasts. However, AI and its other applications are projected to be demand drivers that will help offset future weaknesses for other data center products. 

Carrier infrastructure revenue was $275 million this quarter, an increase of 14% year over year and only 1% sequentially. There are opportunities to expand revenue in the future thanks to demand related to 5G adoption and products. Marvell is expected to continue developing its 5G product portfolio. 

Forecasts predict that carrier infrastructure will have significant growth within the wireless business. Thanks to global 5G deployments, wireless revenue is expected to increase by about 25% sequentially. 

In enterprise networking, revenue totaled $366 million, a 39% increase year over year and a decline of 3%. The increase is thanks to Marvell’s growing share of merchant products and increased content. Meanwhile, the fall came from lower channel inventory for rate merchant products, including additional cuts in China. 

Reductions in enterprise network channels and customer inventory will continue throughout the coming quarter. The ramp-up of custom ASICs will partially offset the decline in revenue from these inventory adjustments, but overall enterprise networking revenue will likely decline in the high-single digits. 

Automotive and industrial end market revenue expanded by 25% yearly to $99 million. Consumer revenue declined by 3% year over year and grew by only 1% sequentially. Declining demand for legacy printer ASICs and HDD controllers contributed to the dip in revenue but was buoyed by consumer SSD controller orders. 

Automotive revenue is expected to increase, while industrial business will likely decline in the next quarter. Overall revenue for both markets combined will decline sequentially but increase minimally year over year. Consumer forecasts indicate a sequential decline of about 10%. 

Total revenue for the year will be $13 billion, plus or minus 5%. The supply crunch will continue to influence revenue totals during Q1, and forecasts show that revenue will dip 8% sequentially and 10% year over year overall. However, 5G and custom ASICs will be areas with solid sequential growth. In addition, recovery is expected in automotive revenue, with the turnaround primarily scheduled in the second half of the year. Finally, Marvell will continue to target the growing AI industry, which should bolster data center revenue, which has struggled over the past several quarters.

Broadcom Inc

Revenue totaled $8.9 billion, a 16% increase year over year. Revenue from semiconductor solutions increased 21% year over year to reach $7.1 billion. Infrastructure spending increased during the quarter, especially for service providers, while hyperscale and enterprise stayed steady. 

The semiconductor solutions segment represented 80% of total revenue for the quarter, up 21% year over year, to total $7.1 billion. By end market, networking revenue represented 31% of semiconductor revenue, server storage connectivity was 18%, broadband was 17% and wireless was 29%. 

Networking revenue was $2.3 billion. In this market, power is still a looming obstacle for hyperscale bandwidth. However, Broadcom’s switch business has increased thanks to hyperscale customers using the technology in AI networks. Thanks to the growing demand, the AI market has been identified as a key revenue driver. Due to this trend, Broadcom is investing in the next generation of lossless, low latency ethernet fabric to manage the work involved in AI services. 

Server storage connectivity revenue expanded to $1.3 billion and is forecasted to increase moderately quarter over quarter. Broadband revenue increased to $1.2 billion, and predictions show this segment will slightly increase by 10%. Wireless also increased to $2.1 billion but is expected to decrease sequentially in the next quarter.  

Industrial resale totals were $229 million, a decrease of 4% year over year. This decrease was caused by weak demand in China but offset by more robust demand in renewable energy and medical markets. This pattern will continue, and revenue will likely decrease slightly in the next quarter. 

Infrastructure software revenue was $1.8 billion, a 1% decrease year over year but represented 20% of total revenue. However, core software did grow by 5% year over year.  

Fiscal 2023 bookings are strong, and lead times are, on average, mostly at 50 weeks. There has been minimal impact from customers requesting to push out deliveries, but the number of these requests is marginal. The amount of inventory on Broadcom’s books is about 80 days. 

Forecasts for the next quarter indicate revenue will be about $8.7 billion. The acquisition of VMware should conclude within fiscal 2023, which will support continued growth and innovation.

Ambarella Inc

Total revenue for Q4 was $83.3 million, which was flat compared to the prior quarter and a decrease of 8% year over year—in addition, days of inventory dropped from 124 to 116. This change shows that inventory days are still high but moving in the right direction.  

Two logistics and ODM companies accounted for about 10% of Q4 revenue. Ambarella’s fulfillment partner in Taiwan, WT Microelectronics, which services multiple customers in Asia, represented 50% of revenue. Chicony, an original design manufacturer for IoT customers, accounted for 11% of revenue. 

Results for the fiscal year 2023 showed that revenue increased by 1.7% to $337.6 million. Slightly less than 75% of total revenue came from IoT, but this was a minor decline year over year. Alternatively, automotive revenue increased by more than 10%, making up about 25% of total revenue. Sequentially, both IoT and automotive revenue were flat. The decrease in IoT revenue was the result of customers making inventory corrections throughout the quarter. 

The degree of end demand is healthy for the first quarter of the fiscal year 2024. However, customers are still trying to reduce their inventories, so bookings have slowed, and requests to delay backlog shipments have increased. According to forecasts, revenue will be between $60 - $64 million.

NVIDIA

Total revenue for the quarter was $6.05 billion, a decrease of 21% year over year but an increase of 2% sequentially. Revenue for the year totaled $27 billion, flat compared to 2021.  

Data center revenue increased 6% from the previous quarter to $3.62 billion. Partnerships with Deutsche Bank and Dell Technology contributed to this 11% increase. One of the major goals that these companies hope to achieve by partnering with NVIDIA is improved AI applications for financial services. 

Gaming revenue decreased by 16% compared to the prior quarter. Total revenue was $1.83 billion, a 46% decline year over year. Despite economic uncertainty and hesitant customer buying behavior, NVIDIA was able to launch several products. This included the GeForce RTX 40 series for laptops, which delivers a significant increase in performance and power efficiency. Additionally, NVIDIA signed a 10-year agreement with Microsoft to develop their Xbox PC game lineup. This portfolio will expand once Microsoft’s acquisition of Activision concludes. 

Professional visualization revenue was $226 million, down 56% year over year and up 13% sequentially. To serve customers in this market, NVIDIA partnered with Lockheed Martin to develop a system that will monitor global weather and environmental conditions. In addition, Mercedes-Benz will employ NVIDIA Omniverse to build new manufacturing and assembly facilities.  

Automotive and embedded profits reached a record $294 million this quarter, an increase of 135% year over year and 17% sequentially. NVIDIA partnered with Foxconn to broaden automated and autonomous vehicle platform technology with products like NVIDIA DRIVE Orin and DRIVE Hyperion.  

NVIDIA has also expanded its product portfolio for AI applications with updates to the NVIDIA Isaac Sim robotics simulation tool. This tool allows for building and testing virtual robots in practical settings.  

Forecasts indicate that revenue for fiscal 2024 will be around $6.5 billion, plus or minus 2%. Sequential growth will be supported by NVIDIA’s four major market platforms and improvements in data center and gaming. 

Analog Devices Inc. (ADI)

Overall revenue for the quarter was $3.25 billion. Revenue grew 21% year over year, and Analog Devices achieved record revenue in industrial and automotive end markets. Macro uncertainty influenced demand this quarter and is expected to continue. However, demand remains strong for industrial and automotive products. This is thanks to ongoing expansion in critical verticals, like automation and electrification.  

Analog Devices is using long-term strategies and investing heavily in research and development to support capacity growth in the future. This will increase their operational flexibility and create more modern, sustainable fabs. 

The industrial market represents over half of ADI’s total revenue. Customers continuously update their facilities with better automation and connectivity for greater output and efficiency. ADI’s systems help customers reduce design time and improve manufacturing connectivity. 

The instrumentation and test business has thrived, particularly within connectivity, AI-assisted computing, electrification, and medical applications. As the technological requirements for these industries continue to become more complex, their reliance on ADI will similarly expand. 

Thirdly, the electrification market is the strongest and fastest-growing area. Consumers have consistently demonstrated a desire for a more sustainable future, driving substantial expansion in electrical grid infrastructure. Industrial and automotive companies are investing heavily in battery production for products like electric vehicles. The primary goal for these factories will be manufacturing higher-density batteries, which will increase demand for ADI’s formation and test solutions. 

Overall, revenue results for the quarter showed that industrial represented 52% of revenue, automotive was 22%, communications were 15%, and consumer was 11%. Consumer was the only market to see a decline and was down 5% year over year and 14% sequentially. All other end markets increased year over year and sequentially. 

Revenue for the next quarter will be around $3.2 billion, plus or minus $100 million. Sequential growth in industrial and automotive markets is expected. However, a sequential decline is likely in the communications and consumer markets. 

GlobalFoundries Inc.

Total revenue for the quarter was $2.1 billion, a 14% increase year over year. The average selling price (ASP) per wafer increased by around 20% year over year, stemming from long-term customer agreements with better pricing, plus continued diversification of the companies’ product portfolio. This helped to offset headwinds in smart mobile device and home and industrial IoT, as well as communications infrastructure and data center sales.  

Wafer revenue from GlobalFoundries end market customers accounted for 88% of total Q4 revenue. Whereas non-wafer revenue, including profits from radicals, non-recurring engineering, expedite fees and other verticals accounted for 12% of total quarterly revenue. 

By end market, smart mobile devices represented 39% of total revenue for the quarter. This was a 7% decline year over year, driven by a drop in sales of low to mid-tier smartphone segments. However, the decline was offset by growth in RF transceiver, audio and specialty power products. 

Home and industrial IoT revenue increased by 64% year over year to represent a total of 20% of Q4’s total revenue. This growth was supported by expansion in key applications like smart cards for digital payments and wireless connectivity. 

Automotive revenue expanded by 24% year over year to represent 5% of total quarterly revenue. This was powered by a ramp up in automotive processing, sensing and vehicle infrastructure technologies.  

Communications infrastructure and data center revenue grew 27% year over year to account for 18% of total quarterly revenue. This was supported by an increase in demand for network infrastructure and data center processing. Personal compute revenue was flat year over year and comprised 5% of total revenue for Q4. 

Looking at 2022 as a whole, smart mobile device revenue grew 11%, handset revenue declined 8%, home and industrial IoT revenue grew 69%, automotive revenue grew 30%, communications infrastructure and data center grew 43% and personal compute revenue declined 38%. Overall, home and industrial IoT grew the fastest. 

In addition, the sale of GlobalFoundries’ East Fishkill facility to Onsemi concluded at the end of the quarter. 

Total revenue for the year was $8.1 billion, up 23% year over year and an increase of around $1.5 billion quarter over quarter. 300-millimeter equivalent wafer shipments increased by 4% year over year and totaled $2.5 million in revenue. 

Expectations for Q1 demand and revenue in the smart mobile device market are low, as customers will still be working through inflated inventories. However, sequential growth is expected in the second half of 2023. Aerospace and defense clients are projected to support demand for next generation analog and mixed signal technology, so growth is expected in the home and industrial IoT end market. Automotive will remain strong and forecasts indicate that 2023 automotive revenue will reach around $1 billion. Alternatively, communications infrastructure and data center, as well as personal compute end markets, will see demand decline. 

Total revenue for Q1 2023 will be in the range of $1.81 - $1.85 billion. Non-wafer revenue will account for about 12% of total revenue. For the full year, CapEx will be approximately $2.25 billion. 

Lattice Semiconductor Corporation

Total revenue for Q4 was $176 million, an increase of 2% sequentially and 24% year over year. Total revenue for 2022 was $660.4 million, up 21% from the year prior.  

This quarter marks the 11th consecutive quarter of sequential growth for Lattice Semiconductor. By end market, communications and computing revenue grew by 26% this year. The industrial and automotive market expanded by 41%. Alternatively, revenue for the consumer end market declined by 3% and only accounted for 7% of overall revenue for 2022. 

Communications and computing, as well as industrial and automotive end markets, will continue to present long-term growth opportunities. Revenue drivers for communications and computing include content expansion and data center server orders, plus 5G wireless infrastructure and data center networking. The goal for the industrial and automotive market will be growing across multiple applications, such as automation and robotics, as well as automotive ADAs and infotainment systems. 

New products will further support these markets, including, but not limited to, the Lattice Nexus portfolio and the Avant platform. In addition, the fifth device family for Nexus, the MachXO5-NX, is on course to enter production within the first half of this year. Although the exact timeline has yet to be announced, two additional device families are planned for 2023.  

Interest in and demand for the Avant platform is increasing, as it offers up to two and a half times lower power with two times faster performance. It is also six times smaller than FPGA devices from Lattice’s competitors. 

Forecasts indicate that revenue for the first quarter of 2023 will be approximately $175 - $185 million.

Coherent Corp.

This was Coherent Corp.’s first quarter with over $1 billion in revenue, with a total of $1.37 billion. Lead times for some strategic components improved during the quarter but lingering shortages are still affecting supply. These constraints had an impact of $67 million.  

Approximately 44% of revenue came from networking, while 29% came from lasers and 27% came from materials business. 34% of revenue came from industrial, 13% from electronics, and 9% from instrumentation. In the communications market, customer demand was focused on telecom and cable TV infrastructure. Telecom is forecasted to accelerate faster than datacom, but both markets will see strong double digit growth year-over-year.  

For data center customers, hyperscale growth is expected in the second half of the year. Datacom business saw record revenue and ethernet transceiver revenue for cloud applications grew at twice the market growth rate. This is forecasted to continue in the new year. Alternatively, industrial revenue declined slightly year over year but strong demand for products that underpin EUV will drive revenue moving forward.  

As demand for electric vehicles accelerates, the demand for silicon carbide will similarly expand. Silicon carbide power devices are a must for the electric vehicle charging industry, which is forecasted to grow as customers look for lower-cost, fast charging, compact solutions. Analysts project that demand will outstrip supply for many years ahead, leading to sustained bottlenecks that few suppliers will be able to break. There was also an uptick in demand in the electronics market.  

Investments in semiconductor laser fabs are ongoing in the United States and Europe, as well as assembly and testing facilities throughout Southeast Asia.  

For the upcoming quarter, revenue will be around $1.32 - $1.37 billion. Full year revenue is forecasted to be approximately $5.35 - $5.55 billion. 

Renesas Electronics Corporation

Total revenue was JPY 391.3 billion, or around $2.9 billion. Year over year revenue increased by 24.5%, but only increased by 1% sequentially. Automotive revenue grew by 4.1% sequentially, industrial infrastructure IoT decreased by 3.5%. The dip in industrial infrastructure revenue was the result of weakened demand in PC and mobile sales.  

For 2023, revenue is expected to be in the range of JPY 355 billion, or about $2.6 billion, which represents a 2.4% increase year over year and sequential decreased of 9.3%. Sequentially, Renesas is expecting to see a decline for the first quarter due to increased costs for production, foundry business, raw materials and utilities.  

Monolithic Power Systems (MPS)

Revenue for the quarter was $460 million, down 7.1% sequentially but up 36.7% year over year. On a year over year basis, quarterly revenue expanded for most categories. Automotive revenue increased by 72.8%, enterprise data was up 69%, storage and computing was up 55%, communications was up 40.1%, industrial revenue increased by 13.3% but consumer revenue went down 20.1%. 

For the fiscal year, by market segment, enterprise data was up 116.1%, storage and computing revenue up 76.8%, communication revenue up 53.2%, automotive revenue up 46.8%, industrial revenue up 18.6% and consumer revenue up 13.2%, demonstrating broad-based full year 2022 revenue improvement.  

Enterprise data revenue was $251.4 million thanks to strong sales in power management solutions for cloud-based CPU and GPU server applications. Storage and computing revenue was $452.6 million due to robust orders for storage applications and enterprise notebooks. Communications grew to $251.5 million, thanks to improved demand for products with 5G and satellite communications infrastructure applications. Automotive revenue was $300 million. MPS increased sales of highly integrated applications supporting automated driver assistance systems, the digital cockpit and connectivity. Industrial revenue was $218.2 million thanks to sales in applications for smart meters and industrial automation. Totals for consumer revenue reached $319.5 million with a strong showing in home applications and smart TVs. 

In 2023 revenue is forecasted to be in the range of $440 - $460 million for the first quarter. 

Vishay

Q4 revenue totaled $855 million, barely missing the end of Vishay’s guidance due to manufacturing disruptions. Distribution inventory concluded with a total of 19 weeks, down from 16 weeks in the quarter prior. CapEx for the year was $325.3 million, an increase of $106.9 million compared to 2021.  

Automotive was amongst the largest market by revenue but decreased by 6.4% versus the quarter prior. This was the result of recovery from Q3, mostly in MOSFET production capacity coming from the Shanghai facility. Automotive customers were also focused on absorbing inventory, so there was less business from automotive OEMs. 

In 2023 Vishay is focused on diversifying manufacturing by building factories in new areas. CapEx will be around $385 million, with most of capacity expansion focused on projects outside of China. These projects include a new power inductor site and resistor expansion in Mexico, as well as diode manufacturing in Taiwan and a new MOSFET 12-inch fab in Germany. As of now, MOSFETs and resistors have lead times extending beyond a year and the hope is that lead times will feel some relief once these expansion projects are complete. In the meantime, Vishay is building strategic partnerships to subcontract production for commodity products and increase resources throughout the year.  

In addition, the acquisition of MaxPower is progressing and samples of 600-volt and 1200-volt planar technology MOSFETs will be available by Q3. Both voltages will be moved to production by Q1 2024. 

Diodes Incorporated

Total revenue for the quarter was $496.2 million, a 3.3% increase year over year and a 4.8% decrease sequentially. This was the result of demand softness in China and an anticipated labor shortage during Chinese New Year. Despite the decrease, revenue performance improved slightly compared to typical seasonality. Total inventory for the quarter increased from 113 days to about 117, while finished goods inventory days went down one day, sequentially, to 33. 

Industrial accounted for 28% of Diodes’ product revenue, computing was 23%, consumer 18%, communications 14% and the combination of industrial and automotive totaled 45%. Electrification was a key revenue for automotive. 

For the year, automotive end markets increased by 40% compared to 2021 results and accounted for 15% of product revenue in 2022. Enduring efforts in content expansion drove growth in the industrial and automotive end markets. Total revenue for 2022 was $2 billion, an increase of 10.8% sequentially.  

In Q1 of 2023 revenue should be approximately $467 million, give or take 3%. Overall demand is stable across all regions and is forecasted to remain so for automotive and industrial end markets. 

On Semiconductor Corporation (Onsemi)

Revenue for the quarter totaled $2,103.6 million, a 14% increase year over year. For 2022, revenue was $8.3 billion, an increase of 24% year over year. Automotive performed particularly well and revenue reached a record $989 million, a 54% increase year over year.  

During the quarter, automotive business increased by 54% year over year and 13% quarter over quarter to total 47% of onsemi’s total revenue. Industrial business increased 6% year over year to represent 26% of total revenue. Industrial business was supported by demand for energy infrastructure and medical applications. Silicon carbide remains a key revenue driver in both business segments. Customers like Volkswagen Group, Jaguar Land Rover, Hyundai Motor Group and Tesla have selected onsemi as a partner for silicon carbide products. 

Industrial business did see a quarterly decline of 10% but moving forward the potential for additional losses will be offset by strength in energy infrastructure and medical applications. This was already evidenced by quarterly revenue from energy infrastructure, which increased by 75% year over year and exceeded the forecasts that predicted only 60% growth. 

Industrial power increased 18% year over year, while intelligent sensing expanded 47% year over year. Power Solutions Group (PSG) revenue was $1 billion, representing a 10% increase year over year. Advanced Solutions Group (ASG) revenue increased by 8% year over year to $701 million. Intelligent Sensing Group (ISG) grew 44% year over year to a total of $354 million. 

Ownership of the 300-millimeter fab in East Fishkill was completed on December 31st and now enables further silicon power product manufacturing.  

Revenue for Q1 is forecasted to be in the range of $1.87 - $1.97 billion. Automotive will be the strongest market, while all other end markets are predicted to soften. 

In 2023 onsemi is dedicated to ramping up silicon carbide production to support long-term supply agreements. In the face of macroeconomic uncertainty, onsemi is still seeing potential for a robust long-term outlook and is forecasting a 38% year over year increase in the design win funnel.  

Microchip Technology Incorporated

Quarterly revenue was $2.17 billion, an increase of 4.6% sequentially and 23.4% year over year. Microchip had 152 days of inventory by the close of the quarter, an increase of 13 days compared to the quarter prior.  

Microcontroller net sales increased by 3.5% sequentially, up 25.6% year over year, to represent 56.3% of net sales for the quarter. Analog accounted for 28% of net sales, a 21.2% increase year over year. FPGA net sales set a new record but, alternatively, the consumer appliance end market business was not as strong and overall business in China declined. In response to this, Microchip is holding higher inventory or redirecting shipments to other areas that have more demand. This strategy will remain in place for the next quarter, increasing the inventory on Microchip’s balance sheet in the near-term. 

Supply constraints will continue to affect Microchip’s business in 2023. However, Microchip hopes to see lead times contract to 26 weeks or less by the second half of the year. Demand has been strong for industrial, automotive, aerospace and defense, data center and communication infrastructure end markets, which account for about 86% of net sales. The consumer market, which accounts for 14% of net sales, is softening slightly but is buoyed by a resilient demand for home appliances. The data end market may see headwinds this year. 

Most of Microchip’s supply relies on trailing edge capacity for their builds. Over the past two years this has been a major shortage area and remains constrained so there is still an imbalance between supply and demand.  

Microchip has decided not to move forward with building a 300-millimeter U.S. based fab for specializing trailing edge technologies. Instead, the company is focused on strengthening relationships with foundry suppliers. 

Net sales for the next quarter are predicted to see an increase of 1% - 4% sequentially. The order backlog remains strong and capacity improvements will continue to come online to support this backlog. Microchip is working closely with customers seeking to push out their backlog to achieve a healthy inventory position. 

Infineon Technologies

Total revenue was $4.31 billion for the quarter which was a decline of 5% sequentially. Automotive revenue totaled just over $2 billion, thanks to a slight weakening of the dollar. Demand for electric vehicles and ADAS trended positively.  

IPC revenue was $536 million and represented an 8% decline due to seasonally weaker demand in all application areas except for transport. The most affected areas of this segment were major home appliances, excluding heat pumps, which had insufficient supply to meet demand. Renewable energy and power infrastructure solutions had strong demand and resulted in a revenue total of EUR 144 million, or $154,369.44. PSS segment revenue reached over $1 million; an 11% decline due to lower consumer product demand. The CSS segment revenue increased to EUR 1,043 million, or $569,038,185.00. This growth was driven by demand for Bluetooth, payment cards, governmental identification and embedded SIMs. 

Auto appliance weakness is forecasted to continue, but this is balanced by a large backlog. Infineon is shifting manufacturing to more high demand markets, particularly renewable energies and related infrastructure.  

Forecasts for the upcoming quarter indicate sales will be in the range of EUR 3.9 billion, or $4.1 billion. ATV and IPC segments will grow in the mid-single-digit percentage range. CSS will remain stable while PSS will significantly decline thanks to weak market conditions.  

For the full 2023 fiscal year, revenue will be approximately EUR 15.5 billion (plus or minus EUR 500 million), or $16 billion. Investments will be focused on building a third manufacturing module on the Kulim site in Malaysia, a fourth manufacturing module in Dresden, Germany, and ongoing expansion of frontend manufacturing capacity in areas like Dresden, Germany and Villach, Austria. 

Qualcomm

Total revenue for the quarter was $9.46 billion. QCT revenue reached $7.9 billion, with $2.1 billion coming from combined automotive and IoT revenues. This was an increase of 15% year over year. EBT reached $2.2 billion, while QTL revenue was $1.5 billion. 

By segment, handset revenue was $5.8 billion, automotive was $456 million and IoT revenue was $1.7 billion. In handset, the Snapdragon 8 Gen 2 for Galaxy powers Samsung Galaxy S23 series became the fastest Snapdragon ever. Additionally, Qualcomm enabled the world’s first satellite-based, two way capable messaging solution for Android smartphones with the Snapdragon Satellite. RF front-end revenues have grown to become the top performer in handsets. 

For automotive, Qualcomm expanded its market reach into 2-wheelers via the latest infotainment and cloud connected digital services. In industrial IoT, Qualcomm now has one of the largest networks of manufacturing partners for tracking and logistics.   

In 2023 revenue is expected to be between $8.7 - $9.5 billion for the first quarter. 

SK Hynix Inc.

Revenue was affected by high inflation, elevated interest rates and a steep decline in consumer buying behavior which caused a decline in IT demand. As customers adjusted their inventories and cut costs, memory demand consequently suffered. SK Hynix struggled with heightened inventory levels and pricing competition, which caused a drop in DRAM and NAND prices. Revenue totaled KRW 7.70 trillion, or just over $6 million, down 30% sequentially and 38% year over year.  

DRAM bit shipment growth was flat sequentially, while NAND shipment growth was higher than expected and grew in the high single digits sequentially. This expansion was due to demand for mobile products and increased sales in data center SSDs. However, the rapid pace of price decline is similar to that seen in Q4 of 2008 and is causing a sequential deterioration of revenue. 

For the year, revenue was KRW 44.6 trillion, or just over $35 billion, which was KRW 1.7 trillion higher than 2021. The memory market saw demand significantly soften in the second half of the year, which caused companies to make cuts to CapEx and utilization rates. The impact of these moves resulted in an aggravated imbalance between supply and demand for memory semiconductors and forced companies to manage heightened inventory levels. However, thanks to the cost savings opportunities this has created, and rising memory usage, the growth momentum for this year is forecasted to be much stronger than it was in 2022. Recovery will likely be seen in the second half of the year. 

PC shipments are predicted to decline, while DRAM content per PC will likely grow by more than 10%. Client SSD demand will expand by 20%. It will take until the latter half of 2023 for the mobile market to improve, especially after the more than 10% decline seen in the last year. Server demand is forecasted to have slow demand following economic downturn and inventory adjustments by CSPs. This could change with the mid-year launch of a new CPU that would increase demand for high-spec servers adopting DDR5. 

Due to the weakness predicted for the beginning of 2023, CapeEx is being reduced by over 50% from the total KRW 19 trillion of last year. Ramp up will continue for new products like DDR5, LPDDR5 and HBM3 as these will be key revenue drivers. Wafer production in DRAM and NAND will be lower in comparison to 2022. 

QORVO

Quarterly revenue totaled $743 million, which was $18 million higher than the midpoint of QORVO’s guidance. Automotive, broadband, defense and silicon carbide power device business was strong but oversupply and weak end market demand did impact performance.  

High Performance Analog (HPA) revenue was $155 million. Growth was recorded in defense and silicon carbide power devices, but inventory consumption in the 5G base station market combined with weak demand in consumer-facing markets like SSDs and battery powered tools offset that growth.  

Connectivity and Sensors Group (CSG) revenue was $97 million, down from last year’s total of $158 million. This was due to weakness in end market demand for Wi-Fi products and continued channel inventory consumption.  

Revenue for Advanced Cellular Group (ACG) was $481 million, down from $775 million last year. This was the result of lower smartphone unit sales and heightened Android inventory. 

Expectations for the next quarter are that revenue will be in the range of $600 - $640 million due to ongoing demand weakness across end markets and consumption of channel inventory. Sales to Android smartphone customers are forecasted to increase sequentially. 

Silicon Laboratories Inc

This was the first year that Silicon Laboratories surpassed $1 billion in revenue. Q4 revenue was $257 million, a year over year increase of 23%. Industrial and commercial business was $157 million, up 36% year over year and setting a new record. For industrial related applications, the strongest results were seen in connected equipment and smart meters.  

The home and life business declined sequentially to total $100 million, but this was still an 8% increase year over year. The largest sequential decline in Q4 was smart home products. Sales of products for life applications also declined, but only slightly. 81% of total quarterly revenue came from distribution sales. Sales in the Americas and APAC were both down sequentially compared to Q3. Europe saw the strongest performance.  

Revenue grew 42% in 2022 compared to fiscal 2021. Fiscal 2022 design win lifetime grew more than 50% across a broad range of applications  

For Q1, revenue is expected to be around $242 - $252 million. Long term prospects for home and life remain bullish, in spite of weakness in certain consumer oriented end markets. The healthcare space looks particularly strong with a double-digit increase forecasted on a quarterly and annual basis.  

Silicon Labs has also contributed more code than any other semiconductor company to Matter 1.0, a program that enables interoperability across major IoT ecosystems. This will increase demand for connected devices and create a simpler experience for developers and consumers. Currently, 87% of the products certified for Matter over thread are built using Silicon Labs’ SOCs. Matter will be a major revenue and growth driver for Silicon Labs and the overall industry.  

Hitachi

Revenue for the quarter was ¥8,108.7 billion, a year over year increase of 10%. Overall demand was strong, particularly for Digital and Green Energy and Mobility sectors. Orders increased for digital systems and services, Hitachi energy, railway systems and building systems. The total amount of orders for the year was substantial, so moving forward there will be a reactionary decline as customers work through their inventory and assess their needs. Digital Systems and Services performed the best for the year and quarter, with Green Energy and Mobility coming in at a close second. 

For the fiscal year 2022, revenue forecasts increased 1% to ¥10,550.0 billion. Moving forward, there will likely be headwinds from fiscal 2023 interest rates, which are predicted to increase and will have an impact on pricing. Shortages previously affected the automobile segment and will continue to do so for logic, analog and discrete semiconductors. Other factors that may influence pricing are material costs, which have been high for electrical steel sheets. 

The rising costs for electricity have affected manufacturing in Japan, as well as factory operations in Ukraine and Russia. While concerns around these costs were heightened at first, the impact has been minor.  

By market, revenue increased by 32% in North America, 18% in India and 21% in Europe. China only saw a 5% revenue increase. Japan’s market similarly struggled, showcasing how growth in both markets is currently sluggish.  

MaxLinear

Total quarterly revenue was $290.6 million, an increase of 2% sequentially and 17% year over year. Operating expenses for the quarter were $122.2 million, or 42% of net revenue. For the year, net revenue was $1.1 billion, up 26% from last year. Net cash flow provided by operating activities was $388.7 million in 2022, compared to net cash flow provided by operating activities of $168.2 million in 2021.   

Wi-Fi business saw considerable growth both sequentially and year over year. MaxLinear’s connectivity category practically doubled during Q4 year over year. Moving into the new year, MaxLinear’s business will be supported by developing technology leadership, accelerating design-wins, and expanding target markets like Wi-Fi, fiber access, wireless and optical infrastructure. In addition, the acquisition of Silicon Motion (SIMO) is ongoing and once complete, will add to MaxLinear’s product portfolio. 

For Q1 of 2023, revenue is expected to be in the range of $240 - $260 million. GAAP operating expenses will vary between $113 - $119 million. 

Melexis

Revenue for 2022 increased by 30% sequentially. For the quarter, revenue reached € 836 million ($245.93 million). Trends that supported Melexis’ growth included a strong U.S. dollar and favorable exchange rate, price inflation, a diverse product portfolio, increase in cap sales and content growth. 

Severely constrained supply greatly affected the company’s growth in 2022. This was offset by car electrification and an increase in demand for body chassis and safety applications. The current sensor product line saw revenue double throughout the year, driven by heightened demand in investor, onboard charging and DC/DC converter applications. Sales of embedded drivers also increased by about 50%. 

Q1 2023 sales are forecasted to be around € 225 - € 230 million ($245,784,375 - $251,327,900 million). Yearly revenue is expected to increase by 11 – 15%, with a gross profit margin of about 45% and operating margin around 26% at the midpoint. However, these numbers will depend on the exchange rate between the euro and U.S. dollar. CapEx will be about € 70 million ($76,466,250.00 million). 

Supply chain constraints will continue for innovative applications used in EVs and high-end vehicles. Other areas of supply and demand are starting to stabilize.

Western Digital

Total revenue for the quarter was $3.1 billion, a decrease of 17% sequentially and 36% year over year. By end market, cloud accounted for 36% of revenue, a decrease of 33% sequentially and 36% year over year. Declines in capacity enterprise drives sold to cloud customers and smart videos were balanced out by an increase in flash shipments. Nearline bit shipments totaled 61 exabytes, a decrease caused by inventory digestion.  

Client end markets were 35% of total revenue and came to $1.1 billion, an 11% decrease sequentially and a 41% dip year over year. This was the result of pricing pressure across flash products, which were offset by increased hard drive shipments, flash pricing pressure and lower client SSD shipments for PC applications.  

Consumer made up 26% of revenue, an increase of 17% sequentially and decrease of 25% year over year. Sequentially, the consumer end market was supported by a seasonal uptick in demand for retail hard drives and flash shipments. The year over year decline was caused by less retail hard drive shipments overall and pressure in flash pricing. 

By segment, revenue for HDD was $1.5 billion and flash was $1.7 billion. Sequentially, HDD was down 28% while flash only dipped by 4%. Year over year, HDD was 34% lower and flash was 37% lower. Total HDD exabyte shipments were down 35%, but flash bit shipments increased 20% sequentially. 

Western Digital has increased its liquidity and financial flexibility through the conclusion of a delayed draw term loan agreement with its lenders and began an agreement with Apollo Global Management and Elliot Investment Management for a convertible preferred investment. In 2023, HDD revenue is forecasted to increase moderately while nearline shipment and ASP growth will decrease sequentially. 

Gross capital expenditure has decreased to $2.3 billion. Western Digital is focused on reducing quarterly operating expenses by over $100 million, compared to six months prior. Revenue for the upcoming quarter will be in the range of $2.6 - $2.8 billion. Operating expenses will be around $600 - $620 million.

Advanced Micro Devices (AMD)

Q4 revenue was $5.6 billion with a gross margin of 43%. Operating income was $1.2 billion, while operating losses for the quarter totaled $149 million thanks to the process of writing off the initial costs of intangible assets from the acquisition of Xilinx. Total revenue for the year was $23.6 billion. Year over year quarterly revenue increased by 16%, primarily due to expansion across embedded and data center segments but was offset by decreased revenue in client and gaming.  

By segment, data center revenue was $1.7 billion, a 42% increase year over year that was driven by robust sales in EPYC server processors. Client revenue was $903 million, a 51% decrease year over year resulting from a weak PC market, reduced processor shipments and inventory corrections throughout the PC supply chain. Gaming revenue dipped 7% year over year to $1.6 billion thanks to lower gaming graphics sales. However, this was balanced out by higher semi-custom product revenue. Embedded revenue grew by $1.3 billion year over year to a total of $1.4 billion because of the addition of Xilinx’s embedded revenue. 

In November, AMD announced the availability of 4th Gen AMD EPYC CPUs, delivering leadership performance and energy efficiency. The latest AMD EPYC processors, built on the “Zen 4” core, deliver next-generation architecture, technology, and features to power the modern data center. Cloud service providers like Google Cloud, Microsoft and Oracle Cloud infrastructure announced planned solutions leveraging the performance and security features of 4th Gen AMD EPYC CPUs.  

In December, AMD unveiled the new Alveo X3 series network cards, the first AMD network cards designed with screened FPGAs and optimized specifically for low latency trading. In addition, the Radeon RX 7900 series graphics cards launched in December. These are the world’s first gaming graphics cards to feature an advanced AMD chiplet design, delivered exceptional performance and energy efficiency to power high framerate 4K and higher resolution gaming in the most demanding titles. 

At CES 2023, AMD delivered a keynote speech that included several announcements for the year and product reveals. This included a preview of the world’s first integrated data center CPU and GPU, the AMD Instinct™ MI300, the industry-leading AMD Alveo™ V70 AI Accelerator for AI interface workloads, and the first medical imaging library through AMD Vitis™. These software libraries accelerate premium medical imaging on AMD Versal™ SoC devices with AI Engines to deliver healthcare providers and their patients high-quality, low-latency imaging.

Samsung Electronics

Profits for Q4 fell by nearly 70% to $57.22 billion. This decrease was caused by a weak global economy and depressed demand for consumer electronics products and computer memory chips. Operating profits fell 69% year over year to $3.5 billion. This was the lowest quarterly profit since Q3 of 2014. 

Samsung thrived for the first two years of the pandemic thanks to its dual strength in parts and finished products, benefiting from robust demand for PCs, TVs and chips powering computer servers as the virus forced millions to work from home. However, it has been harder for the company to weather the economic shock unleashed by Russia’s war on Ukraine, which disrupted industrial supply chains and left major economies grappling with higher inflation and slower growth.  

The company’s profit from its bread-and-butter semiconductor business came to $219 million for the last quarter, down significantly from $7.1 billion it got a year earlier. Chip prices fell sharply amid weakened demand as clients adjusted their inventories in face of “deepening uncertainties” in the global economy, a problem that the company says will likely extend into Q1 of 2023. Samsung also expects demand for its smartphones and TVs to fall further in the first quarter amid the global economic downturn.  

For 2023, Samsung will not drastically cut capital spending on semiconductors this year (unlike most of their competitors), they will lower short-term production via line maintenance, equipment adjustment and continuing to produce more advanced chips. Additionally, because of the current state of the market Samsung has delayed the unveiling of the newest Galaxy S smartphone.

Allegro MicroSystems

Q4 revenue was $248.79 million. Sales improved by 5% sequentially and 33% year over year. Strength in e-mobility and industrial markets were driving factors. Lead times are improving for customers as Allegro’s overall backlog is solid and the past due backlog is declining. 

Automotive business sales increased 8% sequentially and 80% year over year. Automotive sales for the quarter totaled $170 million. A major demand trend in this market was e-mobility, including the continued EV demand and implementation of ADAS feature sets. E-Mobility applications accounted for 43% of Allegro’s quarterly automotive sales, with sensing and power products being major contributors. Industrial business sales grew 6% sequentially and 60% year over year. Total revenue for industrial sales was $51 million. Trends in this market focused on clean energy and industrial automation end markets. Other sales reached $28 million. 

For product lines, magnetic sensor sales were $154 million and power products were $95 million. Sequentially product line sales represented an increase of 10% and a decrease of 3%, respectfully. 

Moving forward, the automotive market is positioned to grow significantly. Global auto production is forecasted to be in the range of 83 million units, an 8% increase compared to fiscal 2022. This is predicted to grow another 4% in fiscal 2024. EV production is likely to increase by 50% in fiscal 2023 and an additional 30% in fiscal 2024. Demand in industrial markets is also projected to continue its upward trajectory. Other markets, including consumer applications, have seen demand soften as expected and there are no exact predictions on when this will turn around. 

To reduce past due order backlog and reduce lead times, Allegro will continue to build wafer and die banks throughout the upcoming quarter. Upcoming revenue for the quarter will be between $260 - $270 million with sales for the year increasing 26%.

NXP Semiconductors

Q4 revenue was $12 million above the midpoint guidance and reached $3.31 billion. This was a 9% increase year over year. For the year, revenue increased 19% year over year to a total of $13.21 billion. Around 14% of revenue growth came from increased pricing. 

By end market, automotive revenue was $6.88 billion for the year, a 25% increase year over year. For the quarter, automotive revenue was up 17%, when compared to the year prior, and reached $1.81 billion. Industrial and IoT yearly revenue was $2.71 billion, a 13% increase year over year. For the quarter, industrial and IoT revenue was down 8% to $605 billion. Mobiles' yearly total was $1.61 billion, a 14% increase year over year. Quarterly profits came to $408 million, up 9% year over year. The final end market, communication infrastructure and other, rose by 15% year over year to $2 billion. Quarterly, total revenue expanded 8% year over year to $494 million. 

Within the automotive segment, NXP is the top producer of radar solutions, radar RF transceivers and radar processes. To that end, NXP unveiled the industry’s first 28-nanometer RF CMOS radar one-chip IC family for next-generation ADAS and autonomous driving systems. 

For the first quarter of 2023, revenue will be down 4%, compared to the first quarter of 2022, to be around $3 billion. For trends, automotive is expected to expand, while mobile, industrial and IoT will decrease. Communication infrastructure and other are expected to be flat in terms of growth. 

Automotive and core industrial business will continue to see supply constraint in certain areas. Supply and demand in consumer IoT and mobile segments will be contingent on cyclical rebound. In communications infrastructure supply will improve alongside stifled demand. For 5G base station markets, growth will hinge on build-out, particularly in India. Weak demand for consumer-oriented products and customer inventory correct will continue to be an issue in 2023. 

NXP will continue to limit the amount of inventory in the market, while keeping a larger amount of supply on their balance sheet so that they can be flexible should demand change.

STMicroelectronics (STM)

Overall revenue for the quarter was $4.42B while the yearly total was $16.3B. Quarterly net revenue increased by 2.4%. The strongest verticals were automotive and industrial. Automotive grew 51% quarterly and accounted for 33% of total yearly revenue, while industrial was up 34% quarterly and accounted for 29% of total revenues in 2022. For the quarter, communication equipment and computer peripherals grew 19% and personal electronics grew 2%. 

By commodity group, silicon carbide for automotive and industrial reached a revenue total of $700 million in 2022. In automotive sensors, business continued to increase in inertial sensors and grew 40% year over year. For industrial applications sensors grew 50% year over year. 

A highlight for the year was the introduction of 80 new industrial analog products. 

Looking ahead to 2023, net revenues are forecasted to be about $4.2 at the midpoint, with gross margin around 48% at the midpoint. Yearly revenue will be in the range of $16.8B - $17.8B, a growth rate of 4 – 10% yearly. STM intends to invest $4B in CapEx, with 80% of the funds directed towards increasing 300-millimeter wafer fabs and silicon carbide manufacturing capacity. The remainder of the CapEx budget will be used in R&D, laboratories, manufacturing maintenance and efficiency, and corporate sustainability initiatives.

Intel

Macro headwinds that started in Q2 of 2022 continued to negatively affect revenue for Q4, which totaled $14.4B, down 8% sequentially. CCG revenue was $6.6B, a 36% decline year over year. NEX quarterly revenue declined 1% to $2.1 billion. AXG revenue increased 34% sequentially to $247 million. Mobileye revenue reached $565 million, a 26% sequential increase. IFS revenue was $319 million, up 87% sequentially.  

In product launches news, the Intel 7 is now at the stage of high-volume manufacturing for client and server. Additionally, Intel 4 and 3 became Intel’s first nodes deploying EUV. Intel 4 is now ready for manufacturing and ramp up for Meteor Lake is expected in the second half of 2023. Meanwhile, the successful launch of the fourth gen Xeon scalable CPU and Xeon CPU MAX series, otherwise known as Sapphire Rapids and Sapphire Rapids HBM, showed Intel’s commitment to strengthening their product portfolio in the beginning of the year. The next performance core addition to the Xeon product line, the Granite Rapids, is currently scheduled to launch in 2024. The Sierra Forest, Intel’s first efficient core product, will go live the same year. 

Overall, all segments were weakened in 2022. The macro headwinds that affected 2022 are expected to continue through the first half of 2023. Additional trends that will have a negative impact include rising interest rates, geopolitical tensions in Europe, and the continued impact of COVID-19. The PC market continues to struggle with heightened inventory that it is working to absorb. However, broad-based markets like industrial, auto and infrastructure demand trends were strong despite suffering from macro volatility.  

In 2023, the semi market ex-memory is predicted to decline in the low to mid-single digits.  

Intel has increased the projected life of certain production machinery and equipment from five to eight years, effective Q1 2023. This is expected to positively contribute to revenue. Forecasts indicate overall revenue for Q1 will be in the range of $10.5B - $11.5B.  FY 2023 operating expenses should fall under $20 billion, an approximately 10% decrease year over year. 

Seagate

Total quarterly revenue was $1.89B. Mass capacity sales dipped 10% sequentially, to a total of $1.2B. Legacy market revenue was up 8% sequentially to $421 million. Quarter over quarter, hard disk drive shipments were down 5%. Revenue for HDD declined 6% to $1.7B and non-HDD business was down 15% to $244 million.  

When the quarter ended in December, Seagate’s liquidity level was around $2.5B. Inventory was significantly reduced from $400 million in the quarter prior to approximately $1.2B. 

For 2023, Q1 revenue is forecasted to be in the range of $2B, plus or minus $150 million. If forecasts are proven correct, this would be a 6% increase quarter over quarter at the midpoint. 

Wolfspeed

Revenue totaled $216 million for the quarter; a 10% sequential decline compared to the previous quarter. Lower yields on the taller 150-millimeter bulls and less output in the Durham fabs, due to supply chain challenges, affected Wolfspeed’s gross margins. Non-GAAP gross margins declined by 180 basis points, year over year, to 33.6%. 

Positive quarterly trends were heightened demand in the electric vehicle (EV) industry. EV sales exceeded 65% year over year globally and represented 10% of Wolfspeed’s portfolio in 2022. Overwhelming demand has been a challenge to navigate, but pressure was eased by partnerships with Jaguar Land Rover and Mercedes Benz which provided better insight into their customer bases’ demand. 

Demand for power devices was also extremely robust and supply grew to 48%. Alternatively, demand was weaker for RF products thanks to recession related headwinds and reduced demand for 5G products. 

Wolfspeed has announced expanded agreements with leading suppliers of silicon carbide materials. Currently the Durham crystal growth operation is the largest silicon carbide materials factory and supplies the entirety of the company’s device business. It also accounts for a significant share of the merchant market. Despite this, additional partnerships with other companies are still necessary to satisfy the intense growth in demand for both captive and merchant wafers. 

Mohawk Valley, a first of its kind fab, is on target to meet revenue goals in the second half of 2023. This fab’s purpose is producing next generation silicon carbide power devices. It has entered the final stages prior to scaling production and is one of the company’s top priorities. Mohawk Valley, as well as a soon to be announced additional fab, will be supported in the long term by partnerships with the John Palmour Manufacturing Center.  

The target revenue total for the upcoming quarter are around $210 - $230 million with the non-GAAP gross margin forecasted to be about 32% - 34%.  

Teradyne

Q4 sales totaled $732 million, a 22% decline year over year. Lower sales in storage tests due to weaker HDD end market demand was slightly offset by higher defense, aerospace and production board tests. Revenue from LitePoint was $40 million, down 23% year over year, because of weaker cellular and Wi-Fi demand. Industrial automotive revenue sank to $110 million, down 2% from 2021. 

Sales for the 2022 were $3.155B, making this year the second-highest revenue earning year in company history. However, it was a 15% decrease compared to last year due to reduced demand in SOC testing for mobility and compute verticals in particular. The SOC market was down $4.6 billion this year and memory was similarly low. Industrial automation expanded 7% financially, thanks to major headwinds from a beneficial foreign exchange rate.  

For 2023, the downturn in semiconductor test equipment is predicted to continue. The market size for SOC producers will likely transfer to 3-nanometer demand, which could alleviate headwinds. Technology transitions in the memory test market are still key demand drivers. Despite this, capacity buying will be reduced this year as technology-driven replacement demand is a challenging end market for memory customers. The memory test market will likely see flat to slightly decreased demand. Storage test market demand will also be weak since the HDD end market is still working to absorb excess capacity. The same can be said for wireless test demand, which will be soft on lower smartphone shipments. There will be a dip in demand in advance of the Wi-Fi 7 transition, which is set to begin in 2024. 

Outlooks for industrial automation will likely suffer from growth headwinds in the first half of 2023. Predictions for far reaching demand, stretching into 2026, show that end markets like AI and cloud computing, mobile processing and automotive, including ADAS and EV, will drive increased semiconductor adoption and chip complexity. AI in particular will speed up the timeline for new semi fab nodes and packaging technologies, such as 3-nanometer, chiplets and gates all around. 

In the midterm, there will be a ramp up for Wi-Fi 7 and expansion for IWB-enabled devices for both precision location tracking and security. 

ASML

Total revenue for the quarter was $7.02B. Net sales for Q4 equaled $6.4B, gross margin was 51.5% and net income reached $1.8B. Quarterly net bookings for the quarter were $6.3B, with EUV contributing $3.4B. Net sales for the year were $21.2B, a gross margin of 50.5%, and net income equaled $5.6B.  

2023 net sales will likely grow over 25% in comparison to last year. Net sales for Q1 2023 are forecasted to be in the range of $6.1 – $6.5B with a gross margin between 49% - 50%. Uncertainty is still plaguing the market due to inflation, rising interest rates, the risk of recession and geopolitical developments related to export controls. Demand for ASML systems is still robust, which is clear in the extent of order lead times and the strategic nature of lithography investments. 

Texas Instruments (TI)

Total quarterly revenue was $4.7 billion, an 11% decrease sequentially and a 3% decrease year over year. Capital expenditures reached $1B during this quarter. Demand suffered in most end markets, excluding automotive, as customers continued to adjust their inventories.  

Year over year, analog revenue declined by 5%, embedded processing grew 10%, while the miscellaneous ‘other’ segment declined 11%.  

By end market, industry was down 10%, automotive was up by mid-single digits, personal electronics dipped in the mid-teens, while both communications equipment and enterprise systems were down 20% each. 

For the year, industrial end markets accounted for 40% of total revenue. Automotive end markets made up 25%, personal electronics made up 20%, communications equipment was 7%, enterprise systems were 6% and other was 2%. The highest category was industrial and automotive, combined, which made up 65% of the year’s entire revenue. 

The CHIPs Act helped TI accrue around $350 million in long-term assets this quarter, which is in addition to the $50 million amassed during Q3. This, combined with the 25% investment tax credit for funds directed towards U.S. factories, will eventually be reflected in income statements as lower depreciation and result in increased cash benefits in the future. 

Forecasts for the next quarter indicate that revenue will be in the range of $4.17B - $4.53B. Investments will be focused on manufacturing, technology, continued diversification of T.I.’s product portfolio and expanding the company’s customer base.  

Upcoming trends include increased demand for analog and embedded technologies as industrial and automotive customers continue to improve connectivity and efficiency in their end products. Chip content per application will follow this uptrend and steadily escalate moving forward. 

United Microelectronics (UMC)

Overall revenue for the quarter was TWD 67.84B, or $2.22B USD, with the gross margin rate sitting at 42.9%. The most significant change came from the North American market, which grew to 30% of total revenue, compared to 23% in the quarter prior.  

For the year, revenue increased by 31% to TWD 27.87B. Asia represented 51% of total revenue, while the U.S. came in at around 24%. 

By commodity group, 22/28 nanometer represented the largest amount of Q4 revenue and reached 28%. 40 nanometer represented 17% and legacy 8-inch of 0.25 and above declined the most. Yearly, 20/28 nanometer represented 24% of revenue for the entirety of 2022. Year over year, 20/28 nanometer revenue grew an impressive 56%, largely thanks to their strong performance in OLED display drivers and image signal processors. 

By vertical, communication is still the largest market and represented 45% of total revenue. Automotive continued its upward trajectory and represented 18% of total revenue. Consumer was 26% of yearly revenue, while communication stayed at 45%. Meanwhile, the automotive segment grew the most in 2022 and increased 82% year over year to account for 9% of total sales. 

Due to the significant slowdown recorded across most end markets, and inventory correction in the semiconductor industry, wafer shipments fell 14.8% quarter over quarter. Utilization rates went from Q3’s total of 100%, down to 90% in Q4. Average selling prices increased slightly throughout Q4 due to ongoing product mix optimization efforts. 

Moving into 2023, automotive will continue to be a key growth catalyst, driven by the long-term demand for vehicle electrification and automation. The effects of global economic headwinds will be felt throughout the first quarter of 2023 as customers continue to absorb higher than normal inventory levels. Order visibility is forecasted to remain low. To navigate this situation, UMC is enacting strict cost control measures and pushing off capital expenditures where feasible. The cash based CapeEx budget is currently set at $3B but may be adjusted according to macro conditions and market demand. 

For the first quarter of 2023, foreign exchange revenue is expected to see a decrease in revenue of around 3 – 4%. Capacity utilization rates will likely drop to 70% and wafer shipments are predicted to decline between 17 – 19%. Smartphone and PC consumer markets will still be undergoing inventory digestion, so demand will be soft through the first half of 2023. However, general demand for semiconductors will help UMC’s foundry business remain strong. If there is any shrinkage, it will be in the low single digit or mid-single digit range.

Taiwan Semiconductor Manufacturing (TSMC)

Overall revenue for the quarter was $20.59B, a 2% increase quarter over quarter that was boosted by a more favorable foreign exchange rate. By vertical, HPC increased 10% quarter over quarter to account for 42% of Q4 revenue and automotive increased by 10% to account for 6% of total quarterly revenue. Smartphone decreased 4% to a total of 38%, IoT decreased 11% to account for 8%, and DCE decreased by 23% to account for 2% of the quarter’s revenue. 

By commodity group, 32% of wafer revenue in Q4 came from 5-nanometer process technology and 22% came from 7-nanometer. The largest group was advanced technologies (7-nanometer and below), which accounted for 54%. Overall revenue for the year increased by 33.5% to $76B. 5-nanometer made up 26% of 2022’s wafer revenue, 7-nanometer was 27% and advanced technologies accounted for 25%. 

Capacity utilization for N7 and N6 is expected to be lower in the first half of 2023 in comparison to the past three years. This is the result of end market weakness in smartphone, PC, and delays in customer’s product schedules. However, the N3 will be running at 100% capacity throughout 2023. In terms of capacity expansion, TSMC is working towards building up manufacturing sites outside of Taiwan. Currently, there are two advanced semiconductor fabs under construction in the United States. 

Q1 revenue for 2023 will be in the range of $16.7B - $17.5B, with operating margins between 41.5% and 43.5%.