DELIVERCHIP（HK）LIMITED— 18 March: This Week’s News

Contents

I. ASE: Advanced packaging revenue expected to rise by at least US$250 million this year

II. Lei Jun responds to the car price war: Confident of breaking into the market, fully prepared

III. Raimondo: US chip supply chain ‘overly concentrated’ in a few countries and regions

IV. Amid concerns over the chip market, Renesas Electronics postpones pay rises and continues with redundancies

01

ASE: Advanced Packaging Revenue Expected to Rise by at Least US$250 Million This Year

ASE Holding recently announced consolidated revenue of NT$39.751 billion for February 2024, down 16.12 per cent from January and 0.6 per cent lower than the same period last year, marking a three-year low for a single month.

Of this total, revenue from packaging, testing and materials stood at NT$23.291 billion, down 6.4 per cent from January but up 0.5 per cent year-on-year.

Semiconductor Manufacturing International Corporation’s cumulative revenue for January to February this year totalled NT$87.141 billion, an increase of 2.38 per cent compared with the same period last year.

ASE stated that it is optimistic about the growth momentum of advanced packaging this year. High-end technologies currently attracting attention include 3D, 2.5D, Fan-Out, SIP, CPO and the ‘oS’ (on substrate) variant of CoWoS. It is estimated that revenue from advanced packaging will increase by at least US$250 million this year, doubling compared to last year, and driving overall revenue growth.

It is understood that ASE has always maintained a close partnership with Apple. Recent reports suggest that ASE has secured a major contract for the advanced packaging of Apple’s next-generation M4 processor, making Apple ASE’s first major client in the advanced packaging sector, with revenue contributions set to begin in the second half of the year.

Previously, at the investor briefing on 1 February, ASE’s Chief Financial Officer, Dong Hongsi, anticipated that this year’s capital expenditure would increase by 40 per cent to 50 per cent compared to last year, reaching a record high. Of this, 65 per cent will be allocated to packaging—particularly advanced packaging projects—with over 60 per cent currently allocated to packaging and testing, and 30 per cent to electronic foundry services.

02

Lei Jun responds to the automotive price war: Confident of breaking into the market, fully prepared

Lei Jun, founder, chairman and CEO of Xiaomi, announced on 12 March that the launch event for the Xiaomi SU7 will take place on 28 March. Pre-orders will open simultaneously at 59 stores across 29 cities nationwide, with the first round of test drives commencing on 25 March. The official pricing of the Xiaomi SU7 is expected to be announced at that time.

He subsequently addressed industry concerns regarding “the current intense competition in the sector and whether Xiaomi has the confidence to break into the market”, ”, stating: “Of course we are confident, because we are Xiaomi Motors, and we are fully prepared.”

Lei Jun also noted that Xiaomi Motors’ journey from scratch differs significantly from that of Xiaomi smartphones 14 years ago, both in terms of the company’s stage of development and the expectations of its users. Xiaomi Motors needs to offer something distinctive, and the most important aspect of this is smart technology. I also believe this is what everyone truly expects from Xiaomi and from new energy vehicles.

03

Raimondo: US chip supply chain ‘overly concentrated’ in a few countries and regions

US Secretary of Commerce Gina Raimondo stated at a business forum in Manila, the Philippines, that the US hopes to help the Philippines double its semiconductor capacity to reduce the geographical concentration of the global chip supply chain.

“US companies have realised that our chip supply chain is overly concentrated in just a few countries and regions around the world. ” Gina Raimondo said, “Apart from geopolitical factors, given this level of concentration, you know the old saying: don’t put all your eggs in one basket. Why do we allow ourselves to purchase so many chips from just one or two countries or regions? That is why we need to diversify.”

Gina Raimondo did not provide any specific details on how the US would offer assistance, merely stating that it would be an attractive destination for US corporate clients. She added that the Philippines is rich in critical mineral resources, and that companies are looking internationally to improve the resilience of their supply chains.

04

Amid concerns over the chip market, Renesas Electronics postpones pay rises and continues with redundancies

Japanese automotive and industrial chip manufacturer Renesas Electronics has decided to postpone its regular pay rises scheduled for April to October this year.

Renesas Electronics reached an agreement with its trade unions in early March this year to postpone company-wide pay rises. The funds saved by Renesas through this measure will be channelled into future investments.

Renesas stated that the scale of redundancies both in Japan and overseas would be limited. Half of those affected by the redundancies are overseas employees, regardless of their position.

Automotive chips account for approximately 47 per cent of Renesas’ revenue, whilst industrial, infrastructure and Internet of Things (IoT) chips make up the remainder. As inventory adjustments in sectors such as industrial chips persist, Renesas is concerned that the profitability of its solutions will continue to deteriorate.

In its consolidated financial forecast released in February 2024, Renesas stated that, as the semiconductor industry is set to remain volatile in the short term, it is unlikely to provide reliable forecasts for the new financial year. The company merely expects consolidated revenue for the first quarter of 2024 to range between 337.5 billion and 352.5 billion yen, representing a decline of approximately 6 per cent year-on-year.

This news is sourced from the internet.