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Covid 19 impact on the Semi-Conductor world : D&R Review

This report collects all News/articles that have been published in major journals or media platforms. It ranges the impact on Foundries, semiconductor market, chip industry as well as in specific hot areas such as 5G ,Data server...

Grenoble, France, Apr. 09, 2020 – 

Impact on Foundry

Samsung unlikely to move 3nm to volume production until 2022
Digitimes.com, April 6
Samsung Foundry, the foundry operations of Samsung Electronics, has set its goal of moving its advanced 3nm process technology to volume production as early as 2021. But they will probably have to reschedule it to 2022, because of the coronavirus issue.

TSMC postpones trial production of the 3nm process
Gizchina, April 3
Due to the COVID-19 pandemic ravaging the world, TSMC has postponed its 3nm (nanometer) trial production. The company had to postpone the trial production after the pandemic affected its logistics and equipment supply chain. The company says that the June installation schedule will be extended to October

TSMC may revise 2020 outlook
Digitimes.com, March 25
TSMC will likely revise its sales outlook, if the outbreak fails to be under control by June, despite its advanced technology leadership.

Foundry Revenue Estimated to Grow by 30% YoY in 1Q20, while COVID-19 Pandemic May Hinder Future Market Demand, Says TrendForce
TrendForce, March 23
The foundry industry benefitted from the previous quarter's order fulfillment and client stock-up demands. According to TrendForce, the foundry industry's revenue in 1Q20 is estimated to increase by 30% YoY, which is meant to demonstrate an overall optimism for the semiconductor industry to make a recovery in 2020. However, as the pandemic multiplies across Europe and the United States, its effects will most certainly make a dent in the economy as well, in turn contracting the global market's purchasing powers. The economic implications of the pandemic on foundry revenue may be increasingly likely to surface in 2Q20, serving as a test for the industry's strategic capabilities regarding product planning and risk assessment.

Impact on Semiconductor Industry

COVID-19 to significantly impact semiconductor market in 2020
EETimes Asia, Apr 1
There is nearly an 80% chance for significant contraction in worldwide semiconductor revenues in 2020, instead of a previously expected minor overall growth of 2%. There is still a one-in-five chance that a fast, strong bounce back from COVID-19 in 2020 is possible. On a global level, the COVID-19 crisis is just beginning, with too many variables to immediately craft a single forecast in response. The impact to technology supply chains in China are significant, but the timing of the recovery is uncertain. the most likely outcome for this event will be a year-over-year revenue growth rate of -6% for the worldwide semiconductor market in 2020.

Covid-19 knocks $55bn off semiconductor revenue in 2020 ...
Gartner, March 30
Gartner revised the prediction for 2020 revenue down by more than 11% – wiping $55bn from the revenue. With half the world in lockdown, and the other half heading that way, few consumers are looking to spend cash on fancy electronics, which means less revenue for semiconductor companies. A 12.5% growth was expected in 2020, but now the semiconductor revenue is going to drop by almost 1%. That figure would be a lot worse if memory wasn't so much in demand – if memory are taken out of the equation then the market will decline by 6.1%, and the impact is going to last for years to come.

First the Entity List, now COVID-19, the semiconductor segment is picking up bruises
Telecoms, March 30
Analysis of 3 month change in share price of semiconductor companies ( Xilinx, Qualcomm, Analog Devices ,...). The only two who have escaped the last three months without too much damage are AMD and Nvidia. These are two companies who serve the gaming segment, which is proving incredibly popular in these times of self-isolation. Looking around the industry, impact to Samsung has been minimal as much of its supply chain remains outside China, but the same cannot be said for its rivals. The Chinese manufacturers would have struggled, though companies like Apple have also suffered. Apple has been relatively quiet so far, though the fact that Foxconn, one of Apple's most important suppliers, reported a 23.7% fall in profit this week suggests there is less demand from the iGiant.

Why the Semiconductor Industry Must Stay Up and Running as We Confront COVID-19
SIA, March 25
Semiconductors underpin vital sectors of the economy, including health care and medical devices, telecommunications, energy, finance, transportation, agriculture, and manufacturing. They are the key components of the technologies that control critical infrastructure, such as water systems, the energy grid, and communication networks. They also underpin the IT systems that enable remote work and access to essential services across every domain, including medicine, finance, education, government, food distribution, and more. Ensuring the continuity of semiconductor and related supply chains is necessary to support the even greater range of services that will be digitized in the coming weeks and months.

Semiconductor Recovery in 2020?
SemiWiki , March 24
The near-term outlook for the semiconductor market is uncertain due to the COVID-19 outbreak. Of the eight top companies providing 1Q 2020 revenue guidance, six expect a revenue decline versus 4Q 2019, ranging from -3% from Texas Instruments to -14.3% from STMicroelectronics. Qualcomm expects a 4.4% increase in revenue and Infineon expects 5.0%, however both these companies mentioned concerns over the coronavirus (COVID-19). Semiconductor market forecasts for 2020 vary widely. Objective Analysis expects 2020 change of "at best zero" based on continuing memory weakness. At the other extreme, Future Horizons is calling for a minimum of 10% growth, with 15% possible. Other forecasts are in the range of 3% to 8%. Semiconductor Intelligence has lowered of 2020 forecast from 10% in December 2019 to 7.0% based primarily on COVID-19 concerns.

IDC: COVID to leave US$26B impact on semiconductor market
IT Brief, March 23
A new IDC report states that the COVID-19 virus will have a serious impact on the semiconductor market, on top of the PC market, the smartphone market, and global IT spending. The impact will likely be close to US$26 billion.

Semiconductor COVID-19 Update!
SemiWiki , March 22
Over 150 companies have reported earning hit due to COVID-19 many of which are semiconductor and electronics companies. Mobile phone sales in February are reported to have collapsed -38% yoy dropping from 99.2million a year ago to only 61.8million in Feb 2020. With so many people working from home there are many warnings out about the dangers of hackers seeking to take advantage and infiltrate companies during this outbreak. At Cisco the numbers of security support requests to support remote workforces have jumped 10x in the last few weeks.

5 Semiconductor Stocks Set for Rebound Post Coronavirus
Finance Yahoo, March 18
Moreover, the coronavirus outbreak has, surprisingly, opened up newer avenues of growth for semiconductor companies. Shift in consumer preference for Internet-based services, thanks to increasing social distancing, will likely spur demand for smartphones, laptops and peripheral accessories. Furthermore, the growing demand for hardware that facilitates work-from-home setting is a key catalyst.

COVID-19 To Have Significant Effect on Worldwide Semiconductor Market in 2020, According to IDC
IDC, March 18
A new International Data Corporation (IDC) report, Impact of COVID-19 on the Worldwide Semiconductor Market Forecast (IDC #US46115520), provides IDC's view on the impact the COVID-19 virus will have on the semiconductor market. The report provides a framework to evaluate the market impact through four scenarios that assess the range of possible outcomes. Each scenario is based on varying assumptions and severity of the impact to business for technology suppliers. For each scenario, a range of critical factors are assessed with a resulting updated forecast, presented with leading indicators to help clients navigate this emergency.



Impact on Chip Market and IC designers

Global chip sales hampered as coronavirus spread in China
MarketWatch April 3, 2020
Global chip sales momentum stalled in February due a falloff in demand from China as the COVID-19 pandemic spread, according to the Semiconductor Industry Association late Friday. While worldwide February sales rose 5% to $34.5 billion from a year ago, they declined 2.4% from January's sales of $35.4 billion, with sales from China falling 7.5% from January.

Stop, Cut or Maintain European Chip Production Amid Covid-19
EETimes March 24
As of March 17th, France imposed strict containment rules, compelling most companies to embrace remote working and take necessary measures to preserve the health and safety of their employees. STMicroelectronics then announced it was adjusting the organization of its front-end and back-end manufacturing operations at its French plants. These temporary measures could concern up to 50 percent of its manufacturing staff.

How Covid-19 will impact the 2020 global chip market
EENews, March 19
IDC now believes there is an 80 percent chance of significant contraction in semiconductor revenues in 2020 instead of its previous expected growth of 2 percent. But that still leaves a 20 percent chance, that a strong bounce back from Covid-19 is possible in 2020. In IDC's most likely scenario, the supply chain will start to recover in 3Q20 with lockdown's quarantines and travel bans being lifted. The result will be a loss of about $25.8 billion of chip revenue from the market. In the short term, there will be lower component availability but also lower demand, IDC said.

Global Top 10 IC Designers' 2019 Revenues Drop by 4.1% YoY, as Industry Growth to Face Challenges from COVID-19 Pandemic in 2020, Says TrendForce
TrendForce, March 17
Regarding the IC design industry's outlook in 2020, despite the seemingly improved trade relations between China and the U.S., the latter government has not put an end to its Entity List policy. In addition, the COVID-19 pandemic is now a global threat, which will certainly affect the public's purchasing demand for consumer electronics. Should the Entity List policy continue to exert its influence on the industry, market leader Broadcom is expected to struggle in the short run as it attempts to make a recovery in terms of semiconductor revenue. On the other hand, although Qualcomm is projected to once again be a part of Apple's supply chain in 2020, the pandemic has not been effectively contained, in turn affecting the sales performance of iPhones and by extension Qualcomm's chip revenue. As well, NVIDIA has revised down its fiscal 1Q21 revenue outlook in light of the pandemic's impact. Given that the pandemic has already exerted its influence over the IC design industry in 1H20, the overall industry is unlikely to recover in 2020.

Impact on Server and storage

Worldwide Server and Enterprise Storage Systems Markets Will Decline in 2020, Impacted by the COVID-19 Pandemic, According to IDC
IDC, March 27
End user spending on IT infrastructure (server and enterprise storage systems) will decline in 2020 as a result of the widespread coronavirus pandemic. According to the International Data Corporation Worldwide Quarterly Server Tracker and Worldwide Quarterly Enterprise Storage Systems Tracker, under the current probable scenario server market revenues will decline 3.4% year over year to $88.6 billion and external enterprise storage systems (ESS) revenues will decline 5.5% to $28.7 billion in 2020. The server market is expected to decline 11.0% in Q1 and 8.9% in Q2 and then return to growth in the second half of the year. The external ESS market is forecast to decline 7.3% in Q1 and 12.4% in Q2 before returning to slight growth by the end of 2020 with further recovery expected in 2021. In the longer term both markets will return to growth. The server market is expected to deliver a compound annual growth rate (CAGR) of 4.9% over the 2019-2024 forecast period with revenues reaching $116.6 billion in 2024. Meanwhile the external ESS market will see a five-year CAGR of 1.3% growing to $32.4 billion in 2024.

Impact on Electronic and global high tech industry

TrendForce Presents Latest Analysis (Updated March 2020) of COVID-19 Pandemic's Impact on Global High-Tech Industries
TrendForce, March 30
Impact on end product shipment forecast : TV: TrendForce has reduced its projection of global TV shipment for 1Q20 to 44.6 million units, down by 8.6% from the pre-COVID-19 prediction of 48.8 million units.. Notebook Computers: TrendForce has decreased its projected 1Q20 notebook shipment from the pre-pandemic level of 35 million units to 27.9 million units, down by 20.3%. Smartphones: The total worldwide smartphone production volume in 2020 is now projected to reach 1.29 billion units, a drop of 7.8% from 2019. The downward correction is attributed to the recession that follows the pandemic as well as the downgrade in shipments (sell-ins) in Europe and North America, which are now the most hard-hit regions of the world. Automobiles Owing to the pandemic's impact and the recent stock market crash triggered by the Russia-Saudi Arabia oil price war, characteristics peculiar to the automobile industry, namely the need for customers to make purchase in person and the high retail price of automobiles, are expected to result in deferred or even eliminated market demand. As such, global auto sales in 1Q20 are expected to decline by 24% YoY. Because many countries other than China are still experiencing peak pandemic activity, their auto markets will likely face considerable impact from the pandemic as well, in turn deferring most of the market demand to 2H20.


Impact on 5G

5G Rollout Will Slow as Standards Work is Suspended
EETimes March 26,
The 5G rollout will grind to a slower pace with a decision by the 3GPP to suspend work on some crucial parts of the specification due to the impact of the novel coronavirus.

Covid-19 Impacts MLCC, Resistor, Smartphone and 5G Supplies
EPSNews, March 24
Covid-19 impacts on the Vietnam and India facilities. The similarities between Vietnamese and Indian manufacturing markets are that they focus on the smartphone industry supply chain. India focuses on the assembly and production of mobile phone terminal products, while Vietnam focuses on the manufacturing of key components. If both of these Southeast Asian countries close down, global smartphone production capacity will be hit hard, and the 5G mobile phone popularization process be slowed down, ESMChina reports.

Impact on IT

Cloud IT Infrastructure Spending Grew 12.4% in the Fourth Quarter, Bringing Total 2019 Growth into Positive Territory, According to IDC
IDC, April 02
IDC's forecast for 2020, after taking into consideration the repercussions of the COVID-19 pandemic and its ensuing economic crisis, is for $69.2 billion in cloud IT infrastructure spending, a 3.6% predicted annual increase over 2019. Non-cloud IT infrastructure spending is expected to decline 9.2% to $61.4 billion in 2020. Together, overall IT infrastructure spending is expected to decline 2.9% to 130.6 billion. The COVID-19 pandemic represents a severe threat to global growth. Prior to the outbreak the expected global real GDP growth was to be lackluster 2.3% (at market exchange rates) in 2020. The emergence of the epidemic in China is a game changer and the expected growth for 2020 is now -0.2%, the slowest rate since the global financial crisis.

IDC Expects Worldwide IT Spending to Decline by 2.7% in 2020 as COVID-19 Drives Down Forecasts
IDC, April 02
Worldwide IT spending is now expected to decline 2.7% in constant currency terms this year as COVID-19 impacts the global economy and forces many organizations around the world to respond with contingency planning and spending cuts in the short term. In line with previous economic recessions, IT spending on hardware, software, and IT services is likely to decline by more than real GDP overall, as commercial IT buyers and consumers implement rapid cuts to capital spending in line with declining revenues, profits, market valuations, and employee headcounts.

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