Intel, Samsung & more earnings; post-lockdown letdown for consumer-related spending; impact of export restrictions; memory sector woes.
Although most companies reported revenue growth, this latest round of chip industry earnings releases reflected a few major themes:
- Lower future quarter guidance to varying degrees, due to the recent U.S. export restrictions related to China;
- Negative impact of the inflationary environment on cornerstone consumer electronics;
- Mostly stable demand for chips used in data center and AI-related products;
- Go-forward reductions in future capital spending, particular among memory makers, and
- More favorable overall market conditions in mid/late 2023 expected for most companies
Memory
Of particular note, memory manufacturer SK hynix’s revenue and profits declined due to “unprecedented deterioration” for DRAM and NAND, signaling it would reduce investments by 50% (year-over-year) in 2023. Micron’s announced revenue versus the prior year fell almost 20%, and 2023 capital spending will be cut by 30% overall, with a 50% cut on wafer-fab equipment.
Foundries
Foundry revenue was mixed. Intel was down 20% compared to the same period in 2021. TSMC’s revenue grew 36%, UMC’s 35%, and Samsung Foundry revenue was the highest ever (not separately broken out). While Samsung plans to increase capital expenditures this year, focusing on its logic chipmaking business, TSMC is cutting its capital spending by about 10% this year. Intel announced $3B in costs reductions in 2023, growing to $8 billion to $10 billion in annualized reductions and efficiencies by the end of 2025. All the major foundries continue to expand their their technology portfolios.
Below are the recent chip industry financial announcements, as well as revenue for some of their largest customers.
| Company | Quarter | Revenue | Revenue Change vs Prior Year & Other Info |
| Advantest (Oct 27) |
Second | 138.9B yen (sales)
~US$ .95B |
52% revenue increase
2022 outlook remains unchanged Solid tester demand continues in auto/industrial/data centers |
| ASE Group (Oct 27) |
Third | NT$188,626M
~US$ 5.9B |
31% revenue increase driven by strong growth in Electronics Manufacturing Services group |
| ASML (Oct 19) |
Third | €5.8B net sales
~ US $5.8B |
10% increase net sales
Expect “fairly limited” impact of China export restrictions Record quarterly net bookings of €8.9B, including €3.8B of EUV 0.33 NA systems & EUV 0.55 NA systems |
| ASM (Oct 25) |
Third | €610M
~US $611M |
33% revenue increase
“Expect the new export restrictions will affect more than 40% of our sales in China” |
| Cadence (Oct 24) |
Third | US $903M | 20% revenue increase
Q4 revenue outlook: Expect impact of US trade restrictions to be “limited and manageable” |
| IBM (Oct 19) |
Third | US $14.1B | 15% revenue increase (constant currency), driven by infrastructure & cloud revenue |
| Intel (Oct 27) |
Third | US $15.3B | 20% revenue decrease , with foundry services down 2%
$3B in restructuring charges in 2023 |
| JCET (Oct 27) |
Third | RMB 9.18B
~US $1.27B |
13.4% increase, driven by high-density system level packaging, large size flip chip technology & FOWLP technology |
| KLA (Oct 26) |
First | US $2.72B | 31% revenue increase, mostly driven by wafer inspection, patterning and services
Will be impacted by China export regulations, but long term financial target remain intact |
| Lam Research | First | US $5.07B | 18% revenue increase
Will be impacted by China export restrictions |
| Onto Innovation (Oct 27) |
Third | US $254M | 27% revenue increase |
| Micron (9/29) |
Fourth | US $6.64B | 20% revenue decrease
50% wafer fab equipment capex cut |
| Renesas (Oct 26) |
Third | 387.1B yen
~US $2.65B |
50% revenue increase, driven by growth in industrial/infrastructure/IoT segment |
| Samsung Electronics (Oct 27) |
Third | KRW 76.78 trillion
~US $54B |
4% increase
Foundry business specifically posted record revenue on improving yields in advanced nodes |
| SK hynix (Oct 25) |
Third | KRW 10.98 trillion
~US $7.7B |
7% revenue decrease
Sluggish demand DRAM & NAND products Slashing investments by 50% next year |
| STMicroelectronics (Oct 27) |
Third | US 4.32B | 35% revenue increase driven by automotive & microcontroller groups |
| Texas Instruments (Oct 26) |
Third | US $5.24B | 13% revenue increase
4th quarter revenue outlook $4.4-4.8B |
| TSMC (10/13) |
Third | US $20.23B | 36% revenue increase (US$ based)
Wafer revenue: 5nm =28% 7nm=26% of total Q4 revenue expected to be US $19.9-20.7B |
| UMC (Oct 26) |
Third | NT$75.39B
~US$2.38B |
35% revenue increase
Fab capacity remained fully utilized Despite softening demand in consumer end markets, strengths in certain wireless comms areas drove further expansion in the 22/28nm business |
| Western Digital (Oct 27) |
First | US $3.74 billion | 26% revenue decrease
Cloud, client & consumer divisions all down |
Find the latest chip industry stock prices here, along with other recent business news.
Linda Christensen
Linda Christensen is vice president of operations and a contributing writer at Semiconductor Engineering.
