Daily News

1.CATL Looks To Mexico For Battery Factories To Supply Tesla And Ford

China’s Contemporary Amperex Technology Co. (CATL) is reportedly looking at a minimum of two locations for future battery factories in Mexico. Reports claim that the upcoming facilities will be built to provide batteries for both Tesla and Ford.

While most global automakers are now moving forward with EVs, Tesla is still the global leader, and Ford is considered by many – including Tesla CEO Elon Musk – as an emerging leader in the segment.

According to a report by Automotive News, CATL is looking at a site in the city of Ciudad Juarez in Chihuahua. It's also reportedly considering Saltillo, Coahuila, as a second option. 

The people who shared the details said CATL may spend up to $5 billion on the Mexico-based battery project. They also noted that the battery manufacturer may decide to split the investment between Mexico and the US, with one future battery factory in each country.

The China-based battery maker currently controls over 30 percent of the electric car battery business across the globe. It has been looking at the potential for a US battery factory for a number of years.

2.Tower Semiconductor and Cadence Expand Collaboration to Accelerate Automotive IC Development

Cadence Design Systems, Inc. (Nasdaq: CDNS) and Tower Semiconductor (NASDAQ/TASE: TSEM), the leading foundry of high-value analog semiconductor solutions, announced a collaboration to advance automotive and mobile IC development. 

Through the collaboration, the companies are developing a new, comprehensive automotive reference design flow using the Cadence® Virtuoso® Design Platform and Spectre® Simulation Platform to provide customers with a faster design cycle, maintaining comprehensive design verification for advanced automotive IC product development.

The unique design challenges and analysis characteristics of automotive ICs require a carefully crafted combination of technologies and methodologies in order to satisfy the demanding ISO 26262 specification. 

By working to combine Cadence and Tower technologies, mutual customers can meet automotive design goals and achieve a faster path to ISO 26262 certification.

3.MediaTek reduces wafer throughput

Due to the weak demand for consumer electronics such as smartphones and large-size TVs, MediaTek recently decided to increase its destocking efforts, including reducing the number of wafer foundries outside TSMC. The reduced orders have not been cancelled, but the production has been delayed.

At the same time, the packaging and testing factory is required to cooperate with the adjustment of the production process, including suspending the production of the old product packaging and testing, and temporarily depositing the wafer inventory in the packaging and testing factory. The packaging and testing of new products reduces production and prolongs the delivery time.

Although TSMC's production capacity remained tight in the second half of the year, other foundries have faced pressure from customers to reduce orders for consumer electronics chips. According to industry news, in order to reduce inventory, MediaTek has begun to adjust the wafer casting in the second quarter. Although based on the consideration of long-term contracts or cost adjustment, there is no action to cancel the casting, including the request of TSMC in May. 

Other foundries should reduce the production volume first. Originally, the wafer production should be in the second quarter, but for orders that did not enter the production schedule, the production and shipment will be delayed.

The packaging and testing industry pointed out that MediaTek has deposited the wafers into its inventory (wafer bank) in the second quarter. Although the orders at the packaging and testing plant have decreased, but the magnitude is not large, it has begun to strongly demand the packaging and testing plant to reduce the production load before the end of August. Including the old product packaging and testing production is suspended first, the wafer inventory is first deposited in the packaging and testing plant, and the production and delivery time will be notified later. 

That is to say, the number of packaging and testing completed and shipped from now until the end of August can be changed to complete packaging, testing and shipment from now until September or October.

4.Samsung Electro-Mechanics: The potential of IC substrates far exceeds that of foundries, and the demand for FC-BGA has surged

According to Korean media reports, Samsung Electro-Mechanics plans to start mass production of FC-BGAs for servers in South Korea in the third quarter.

Samsung Electro-Mechanics announced that the company's semiconductor substrate production has continued to increase, from 495,000 square meters in 2019 to 703,000 square meters in 2021, equivalent to 100 football fields. Due to the continuous shortage of substrates, the company's production rate is approaching 100%.

As more and more large technology companies begin to join the ranks of self-developed chips, this will undoubtedly lead to a surge in demand. According to data, the market size of FC-BGA will grow by more than 10% every year in the next five years, and the market value will rise from US$11.3 billion to US$17 billion in 2026.

"In terms of future projected growth rates, the semiconductor packaging substrate market is expected to expand faster than the chip, foundry or chip packaging market," said Ahn Jung-hoon, director of Samsung Electro-Mechanics. Although the semiconductor substrate market is smaller than foundry, Growth potential is far greater than foundry.

Over the past two years, Samsung Electro-Mechanics has spent nearly 2 trillion won to expand its three FC-BGA plants in Busan, Sejong and Vietnam.

To enter new market segments and meet growing demand, Samsung Electro-Mechanics announced last December that it would invest 1.3 trillion won to produce FC-BGA substrates at its Vietnam manufacturing plant.

In June this year, Samsung Electronics once again announced that it will invest an additional 300 billion won in the construction of FC-BGA production facilities.

Samsung Electro-Mechanics said that it will continue to expand the production of high-end products, aiming to become the third largest manufacturer of semiconductor substrates, second only to the Japanese factory Ibiden and Shin-Opto.

5.Global IT equipment spending will shrink in 2022, and the server market will grow

Research firm Gartner recently updated its full-year IT market outlook for 2022, predicting that total global IT spending will grow by 3% this year to $4.5 trillion, but IT equipment spending will shrink to 767.8 billion US dollars, down 5% year-on-year.

However, Gartner pointed out that the growth rate of enterprise cloud computing spending is expected to reach 22.1% this year, further accelerating from 18.4% last year, which also drives the demand for server hardware.

It is expected that server hardware spending will increase by 16.6% this year, and the overall spending on data center systems is also expected to achieve a growth rate of 11.1% this year, ranking first among several major business segments.