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    A Chip Industry for All Seasons


    Seasonal demand for semiconductors appears for now to be a thing of the pre-pandemic past as heavy demand for memory devices translated into unforeseen gains for the global chip industry during the traditionally slow first quarter.

    Market forecaster Omdia reported this week that semiconductor revenues rose a modest but unexpected 0.5 percent over the previous quarter during the three months ending March 31. The gains mark only the third time chip makers have logged first quarter revenue growth since 2002.

    Leading the way were memory makers Samsung Electronics, SK Hynix and Micron Technology. Micron recorded a hefty 9.7-percent quarterly gain, according to Omdia’s Semiconductor Competitive Landscape survey.

    Overall, the memory sector registered a 6.2-percent quarterly gain on the strength of heavy demand for DRAM, which accounts for more than half of all memory revenues. Omdia said DRAM revenue jumped 9.1 percent from the previous quarter, reaching $95.8 billion.

    “Despite the traditional low-demand season in the first quarter, both quantity and price increased as demand continued to be solid across all applications,” said Lino Jeng, Omdia’s principal chip analyst.

    “In the case of legacy DRAM products, prices increased by double digits, which led Taiwanese companies to record positive sales growth,” Jeng added. “In addition, because of increased purchasing due to concerns over supply shortages within the year, prices have risen in all applications, leading to improved earnings for major DRAM companies.”

    Moreover, Omdia expects IC sales growth to continue during the second quarter along with a “deepening supply shortage.”

    Meanwhile, the non-memory segment of the global chip industry also outperformed seasonal patterns by 3.5 percentage points on a quarterly basis. Omdia said the pandemic and resulting chip shortages lifted average selling prices for most components, fueling positive quarterly growth well beyond the traditional minus-4.7 percent historical average for the first quarter.

    Intel Still Leads

    Despite a nearly 4-percent decline in quarterly revenues, Intel remains the world’s largest chip maker, largely a function of its continuing dominance in enterprise data centers. Media darlings such as AMD and Nvidia continue to chip away at the x86 architecture’s hold on enterprise servers, for example, but continue to fall well short in terms of market share, Omdia confirms.

    For how long Intel maintains its led is uncertain. Analysts note that only Intel, Samsung and Taiwan Semiconductor Manufacturing Co. possess the ability to fabricate advanced FinFET devices. After several years of process technology stumbles, observers note that CEO Pat Gelsinger appears willing to take more risks to revive Intel’s chips fortunes.

    The key is the ability to design and build high-performance cores based on leading-edge FinFET technology, says Risto Puhakka, president of VLSI Research. Despite a growing emphasis by other U.S. chip makers on “relaxed” chip nodes, Puhakka said the winners will be chip makers able to design and scale chip production at the bleeding edge.

    “It’s going to be the screamers,” Puhakka said. “So far, Moore’s Law beats anything else that’s been proposed.”

    As the U.S. attempts to revive its chip manufacturing prowess, upstarts like SkyWater Technology argue there’s plenty of room in the chip market for larger geometries and smaller wafer sizes. “Intel is trying to decide whether they’re going to be a product company or a services company,” asserts SkyWater CEO Thomas Sonderman.

    Based on recent moves, including a $20 billion foundry expansion plan, it appears Intel’s Gelsinger is betting on products—the higher the performance, the better.

    Source: eetimes.com