Application processors and other device sales for 5G smartphones act as a robust driver.

IC Insights recently released it August Update to the 2020 McClean Report that included the first of a two-part analysis on the global IC foundry market.  IC Insights defines a pure-play foundry as a company that does not offer a significant amount of IC products of its own design, but instead focuses on producing ICs for other companies.  Examples of pure-play foundries include TSMC, GlobalFoundries, UMC, and SMIC.  Integrated device manufacturer (IDM) foundries are defined as those companies that offer foundry services in addition to manufacturing their own ICs.  Examples of IDM foundries are Samsung and Intel.

Driven by growing demand for application processors and other telecomm device sales into 5G smartphones, the pure play foundry market is on pace to expand by a strong 19% this year, after declining 1% in 2019 (Figure 1). IC Insights forecasts 200 million 5G smartphone handsets will be shipped in 2020 (although some forecasts expect 250 million units), up from only about 20 million units in 2019.

Figure 1

(more…)

Potentially the largest acquisition in semiconductor history faces plenty of obstacles.

After nearly two months of negotiations and press reports that a blockbuster deal was in the works, Nvidia this week announced a $40 billion agreement to buy ARM—the leading supplier of processor intellectual property (IP)—from financially struggling SoftBank in Japan.  If approved, the deal would be the largest semiconductor acquisition in history, provided the additional $5 billion cash/stock payment is included for the business achieving financial targets.  The acquisition, which is expected to take 18 months to complete (around March 2022), would top Avago’s 2015 deal to buy Broadcom for $37 billion, and SoftBank’s $32 billion purchase of ARM in 2016 (Figure 1).

ARM’s technology licenses and services generated $1.8 billion of revenue in 2019 and a little over $1.0 billion in the first half of 2020, but SoftBank decided to sell the business to help it climb out of huge losses from investments in technology startups.  As part of the transaction, SoftBank is expected to take a stake in Nvidia (under 10% of its total stock)

(more…)