Unlike digital chips, the development of analog chips does not mainly depend on industrial process iterations. Usually, the product life cycle is longer and the price fluctuation is small. This characteristic determines that the fluctuation performance of analog chips will be slightly better than that of digital chips. It is believed that in the down cycle, analog chips may be a product type that recovers relatively early
Analog chip manufacturers performed well in the first quarter of 2023
In the relatively sluggish chip performance at the end of last year, the performance of analog chip and power chip manufacturers was relatively stable. Since this year, the simulated track still shows the obvious anti-stress characteristics
According to the latest data from Omdia, in the first quarter of 2023, the global semiconductor industry revenue will be US$120.5 billion, a 9% decrease from the fourth quarter of last year, which is the fifth consecutive quarter of decline and the longest since 2002. A continuous decline. The top ten companies in 23 years are: Intel, Samsung, Qualcomm, Broadcom, AMD, Nvidia, Infineon, Apple, TI, STMicroelectronics
In Omdia’s previously released 2022 global semiconductor company sales ranking analysis, the top ten are Samsung Electronics, Intel, Qualcomm, SK Hynix, Broadcom, Micron, AMD, Nvidia, TI and MediaTek
Comparing these two rankings, it can be seen that memory chip companies have been greatly affected by the market downturn. Micron and SK Hynix were not even seen in this year's Q1 list.
The major analog chip makers performed relatively better, with Infineon and STMicroelectronics rising to seventh and tenth respectively. From this point of view, among the top ten companies in Q1 this year, analog chip manufacturers accounted for nearly one-third
Analog Chip Market Situation
According to the general functions, analog chips can be divided into two categories: power management chips and signal chain chips.
Power management chips include voltage regulator products, battery management products, LED drivers, AC/DC controllers, etc., involving industrial control, automotive electronics, network equipment, consumer electronics, mobile communications, smart home appliances and many other fields
Signal chain chips include linear products, converter products and interface products, which are widely used in industry, communication, medical industries, etc.
TI, ADI, Infineon, Onsemi, STM, NXP, etc. In Q1 this year, the revenue of many analog chip companies has entered a year-on-year negative growth, and their forecasts for the future are also very pessimistic. However, judging from the recent Q2 performance reports released by various companies, the analog market seems to be slowly improving, and the performance of many companies has increased on a quarter-on-quarter basis.
WSTS forecast data shows that the analog chip market will continue to grow against the trend in 2023, and the global market sales this year are expected to increase by 1.56%, reaching 90.952 billion US dollars. Due to the wide variety of analog chips, the longer update iteration cycle makes analog manufacturers less impacted by the market
Analog Chip Manufacturers Are Still Continuing to Build Capacity
Although the demand for orders continues to decline in the first half of 2023, many major analog chip manufacturers are still continuing to build capacity
In February of this year, Texas Instruments released its capital management plan for the next few years. From 2023 to 2026, Texas Instruments will spend about US$5 billion a year on chip manufacturing, and will spend 10 percent of its total revenue in 2027 and beyond. % to 15% as capex
STMicroelectronics previously said that its capital expenditure plan for 2023 will reach US$4 billion, exceeding US$1.8 billion in 2021 and US$3.52 billion in 2022. STMicroelectronics starts production at its Norrkoping, Sweden plant in July 2021, producing the first batch of 200mm (8-inch) silicon carbide (SIC) wafers
In May of this year, Infineon built a new plant in Dresden, Germany. The investment in this plant reached 5 billion euros, which is also the largest single investment in Infineon's history.
Judging from the disclosed second-quarter financial reports, the capital expenditures of NXP, ADI, and TI during the period reached 200 million, 284 million, and 1.446 billion US dollars respectively. From the trend point of view, many analog manufacturers have significantly increased capital expenditures in recent years, and will continue to push up investment in 2023.
The increase in investment despite the poor situation of the analog chip market is because for major manufacturers, responding to future development needs and maintaining a leading position are the top priorities. In the past, the semiconductor industry usually experienced a cycle of “expansion—increase in demand—increase in capacity—overcapacity—decrease in price—stop expanding capacity”, and after stopping the expansion of capacity, it would face shortages and start a new one. cycle, this phenomenon will always exist in the semiconductor industry
TI has repeatedly won the market through "counter-cyclical expansion". In a seller’s market where supply exceeds demand, buyers buy chips from various manufacturers; while in a housing market where supply exceeds demand, orders will flock more to leading manufacturers with higher prices, more abundant products, and greater production capacity
Well-known analog chip manufacturers mostly use the IDM model. The advantage of this model is that it can integrate internal technical advantages, accumulate process experience, collaborate in design and manufacturing, and achieve rapid product iteration. IDM can reduce costs, obtain higher product added value and so on. It can be seen that in the field of analog chips with a wide range of product categories and complex applications, expansion of production will actually help well-known manufacturers to stabilize their positions
Two Major Drivers of Q3 Analog Chips
Automobiles are the next explosive point
Analog chips are an important part of the car's cockpit, powertrain, and body areas. With the accelerated development of electric vehicles, the value of analog chips has increased. Open industry space. In 2022, the global automotive-specific analog chip market will increase by 17% to US$13.8 billion, the fastest growing downstream market for analog chips
The rapid growth of global sales of new energy vehicles supports the steady increase in demand for automotive analog chips. In all levels of vehicles from A to E, electrification has greatly increased the demand for single-vehicle analog chips. Driven by the trend of electrification and intelligentization of automobiles, it is expected that the demand for semiconductors in the global automotive field will maintain rapid growth, which will become the main factor driving the growth of demand for analog chips
NXP and Infineon's Q2 operating income increased instead of falling this year, which also benefited from the automotive business. NXP said that in the second quarter, automotive chip revenue increased by 9% year-on-year and 2% quarter-on-quarter to $1.866 billion, better than analysts' expectations of $1.85 billion. According to the financial report, automotive chips accounted for 58.6% and 56.6% of NXP's total revenue in the first quarter and the second quarter, respectively.
Infineon's automotive business has revenue of 2.080 billion euros in Q2 this year, a year-on-year increase of 40% and a quarter-on-quarter increase of 11%, breaking through the quarterly turnover of 2 billion euros
AI creates a lot of demand
In the recent fiery ChatGPT, the first to benefit at the order level is the computing chip market dominated by Nvidia, but there is also a certain demand for the analog chip market.
When providing more intelligent functions, digital technology has made a great contribution to reducing power consumption and cost. It conforms to the evolution of Moore's law. In the future, there will be more and more processing that relies on pure digital logic.
However, the world we live in is analog, and from sensor inputs to actual signals transmitted through wires or air, analog technology will always be there and will always be important. It can correctly restore the digital signals represented by "1" and "0" to the analog signals that people can hear, see, feel or perceive
Whether it is the shrinking size of smart devices, increasing smart functions, high-quality sound quality, high-definition images, etc., these are not only the products of advanced manufacturing technology and high-performance digital processing technology, but also the continuous innovation of analog technology. the results
Growth in analog chips for power management, sensing and connectivity will accelerate as AI becomes more widely used
