The World Semiconductor Trade Statistics (WSTS) released its latest semiconductor market forecast for August 2022, estimating that the global semiconductor market growth rate will be revised downward from 16.3% to 13.9% this year, with the market size reaching US$633.238 billion, down 2.0% from the original estimate of US$646.456 billion, due to the weak demand for consumer electronics terminals, resulting in falling memory prices and shrinking output value, and the slowdown in memory market growth. In 2023, the market growth rate will be revised down from 5.1% to 4.6% and the market size will reach $662.36 billion, down 2.5% from the original estimate of $679.65 billion, but the overall market size will continue to reach a record high this year and next.

With the oversupply of dynamic random access memory (DRAM) and storage type flash memory (NAND Flash), prices have fallen and will continue to fall in the second half of this year. Next year, the annual growth rate of the global memory market will be revised downward to 0.6%. This wave of forecast revisions also includes microprocessors (MPU), microcontrollers (MCU) and other microcomponent market growth rate, from the original expected 11.4% down to 5.9%, next year's growth rate from 5.3% down to 3.6%. However, WSTS reversed the annual growth rate of the analog components market in 2022, from 19.2% to 21.9%, and next year's growth rate was revised upward from 5.7% to 6.4%.

WSTS said that the semiconductor market still has a chance to exceed US$600 billion (about NT$17.8 trillion) this year. The main types of chips are expected to see double-digit annual growth, of which, the output value of logic IC is expected to grow by about 24.1%, analog IC by about 21.9%, sensor by about 16.6% and optoelectronics by about 0.2%. From a regional perspective, Asia Pacific is expected to grow by 10.5%, the Americas by 23.5%, Europe by 14%, and Japan by 14.2%.

IC Insights predicts that with the increase in 5G cell phone shipments and related infrastructure in place, the communications industry will account for the majority of analog IC sales in 2022, with wireless communications applications accounting for 91% of overall analog communications sales and wired communications applications accounting for 9%. As the battery-powered systems of cell phones, notebooks and various mobile devices require such chips to regulate power to avoid overheating during device operation and extend battery life, plus these chips also have communication interfaces, display backlights and other adjustment functions, the overall market demand is still quite large.

Mixed analog digital ICs, the analog chip market "4 most"

IC market can be divided into four major products: analog, logic, memory and micro components, the shortage of chips in the past two years, the most shortage of analog and power management chips. ITRI Electronics and Optoelectronic Systems Research Institute Director Shih-Chieh Chang pointed out that today there is no pure digital IC or analog IC, mostly mixed and analog digital IC, but there is still a pure memory IC, such as Flash, Dram, can only distinguish the digital-oriented design IC, to process micro-shrink to achieve area, speed, power optimization and other benefits, but also contains a large number of analog pulse, transmission, power regulation, etc. Non-digital-oriented design ICs (analog ICs) require high precision, low noise and other quality, and also rely on a large number of digital circuits to achieve algorithm correction.

Zhang shijie explained that the current industrial applications are mostly "small amount and high specification", which is a typical analog chip market. "High specification" refers to the characteristics of accuracy, large voltage range, very high speed (RF), very low power consumption, low noise, etc. As smart manufacturing grows at a compound annual growth rate of 10% per year, industrial applications are the market that "needs" analog chips the most. Since various machines have unique smart manufacturing specifications and characteristics, coupled with a small number of diverse process requirements, it is bound to drive chip demand and growth.

In the automotive industry, the semiconductor-based Advanced Driver Assistance Systems (ADAS) will have a compound annual growth rate of 20% in the next five years; electric vehicles will continue to grow at an annual penetration rate of 2%; the annual output value of automotive chips is about $60 billion, with a compound annual growth rate of 10%, so electric vehicles are the "most growing" market. Take the fast-growing electric car as an example, an electric car is conservatively estimated to require 500-1,500 chips, and even the new Ford Focus electric car requires up to 3,000 chips. As the demand for electric vehicles climbs year by year, it is bound to drive the demand for batteries, switches, control circuits, radar, light up and other sensing needs, as well as the growth of a series of chips.

Communication field has 1.5 billion cell phone demand each year, the market size is stable, about 30 billion U.S. dollars of analog (RF front-end, power) chip output value, is also the "most stable" market; PC/NB class market has about 300 million units shipped each year, with the introduction of new IO specifications, the demand for analog chips for peripheral products up to 10 billion U.S. dollars, called the "smallest soldier to achieve great success" of the market.

In addition, a large number of low-orbiting satellites deployed and continue to increase rapidly, the ground application of diversified expansion, from the current fixed ground station, and gradually expand to the vehicle, personal devices to satellite IoT devices, as the ground receiving station more and more, whether it is vehicle or personal devices need analog chips, unlimited potential, worthy of attention.

Top 10 analog chip suppliers occupy half of the world

IC Insights released the top 10 analog chip suppliers sales, market share ranking, 2020 and 2021 is not much difference, the top three are DEI (TI), ADI (ADI), Skyworks (Skyworks).

TI's analog chips will account for 75% of the business in 2020, with sales of $10.886 billion, an annual increase of 9%, and a market share of 19%, of which about half of the process is 12-inch wafers. DEI has built a new 12-inch (300mm) semiconductor fab in Sherman, Texas, and expects to put it into operation in 2025. The new fab will join the existing 12-inch fabs, including DMOS6 in Dallas, Texas, RFAB1 and RFAB2 in Richardson, Texas, and Lehi in Utah. The LFAB in Lehi, Utah is expected to go into production in early 2023.

ADI (ADI) market share of about 9%, after the acquisition of Linear in 2017, access to new markets such as current sensors, high current for the cloud, the proportion of revenue is mainly industrial (about 53%), followed by communications (about 21%), automotive (about 14%), and consumer electronics (about 11%). Sijiaxun (Skyworks) benefits from the growth of demand for wireless communication products, as well as 5G, Wi-Fi 6 technology upgrades, market share of 7%.

Europe's three major suppliers Infineon (Infineon), STMicroelectronics (ST), NXP (NXP) global market share in 2020 total 17%, of which, Infineon benefit from the automotive, power and other sensor demand heating up, better performance than STMicroelectronics and NXP. As for Maxim (Maxim) has been acquired by ADI (ADI).

ON Semiconductor (ONSemi) in the development of power semiconductors second only to Infineon (Infineon) and DEI (TI), products include power components, sensors and power management, end-use applications cover automotive, medical, consumer electronics, industrial, communications and cloud areas, and automotive (about 37%) as the bulk of the industrial second (about 28%). Microchip technology (Microchip) products are mainly used in automotive, military, aerospace, communications, computer, manufacturing and consumer electronics and other fields. Japanese IDM major Renesas Electronics (Renesas) from 2021 to maintain the fab-light (fab-light) strategy to expand outsourcing foundry to improve the supply of microcontrollers (MCU) and power semiconductors, hoping to increase the supply of MCU by 50% by 2023.

Gartner statistics, in 2020 the global automotive semiconductor output value of about $ 37.4 billion (about NT $ 1.05 trillion), of which, Infineon, NXP, Renesas, DEI and STMicroelectronics 5 IDM that accounted for 43%, especially Infineon market share of 11.6%, as the leading automotive semiconductor.

Zhang Shijie observed that the world's top 10 analog chip IDM companies have a strong application system support of the home country, such as the U.S. system - defense industry, Europe, Japan - automotive industry. The U.S. system factory in space, military industry support, in the specification, the operating environment of the ultimate development, and the product export control, to maintain their own advantages and the downstream attraction force.

European and Japanese factories use their strong automotive industry energy, from development to safety regulations, to exclude foreign competition, and also accumulate chip development to the whole vehicle system engineering energy. However, analog chips attach importance to specifications, from the process, design, assembly must be optimized together, test also need to rely on self-test procedures, IDM to a certain extent must be vertically integrated, to South Korea, for example, South Korea Hyundai (HYUNDAI) global growth is rapid, gradually replicate the European and Japanese automotive IC strategy.

Looking ahead to the second half of 2022 or 2023, what other indicators can be observed for the future trend of analog chips?

Zhang Shijie pointed out that the recent market value of Supermicro Semiconductor (AMD) has surpassed the leading Intel (Intel), AMD's success has led to new opportunities, representing the advancement of Moore's Law, there are other multiple progress programs to be discovered and challenged, multi-chip heterogeneous integration has the opportunity to find the sweet spot in performance and cost. Analog chips are specification-oriented and do not follow Moore's Law, and in the past, they have made clear product differentiation with digital chips. "Through heterogeneous integration, it is possible to integrate multi-state chips to achieve system and packaging units, which will be the future product trend.

In addition, world-class chip manufacturers such as Apple, Supermicro, Intel, Qualcomm, MediaTek (MTK), etc. have integrated multiple chips through various vertical and horizontal emissions for high-performance computing, the future can pay close attention to the development of these major manufacturers, and keep abreast of the latest integration process of power management IC (PMIC), IO chip (IOIC).