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BNA_G2_Semiconductor Industry, UMC, expected to attract more smartphone…

- - - - 1997
    - - Subsidiary of United Microelectronics (UMC)
    - - Hsinchu
    - - semiconductor chip design company/upstream
    - - Design wafers and entrust wafer foundries to produce them
    - - mobile phone manufacturers, consumer electronics manufacturers
  - - - :silhouettes:Major customers: BTC, Lite-On, Hitachi, Sony, LG
        
        :silhouette:Competitive Strategy: Defeat Japanese suppliers with low-price, highly integrated system-on-chip (SoC)
        
        Achievement
        
        Gain 50% market share in the CD market
        
        Successfully entered the DVD market and provided chips for Apex Digital
        
        Started researching the mobile phone market in 2001
  - - - Providing "turnkey" solutions
    - - Quickly achieve 14% global mobile phone market share
      - Reference designs are popular and cater to different market needs (e.g. 4-SIM phone in Brazil)
      - Help mobile phone manufacturers shorten time to market and reduce costs
  - - - Smartphone chips
    - - Bring high-end functionality to the low-cost market to challenge market leaders
    - - Chinese mobile phone manufacturers (e.g. Oppo, Xiaomi, ZTE)
    - - Become the leader in China’s mobile phone chip market, with a market share of nearly 40%
      - In the third quarter of 2020, it surpassed Qualcomm and became the world's largest smartphone chip supplier.
  - - - Potential political risks (e.g. Tsinghua Unigroup’s takeover attempt in 2015)
      - Fierce competition with market leaders such as Qualcomm
      - future developments
        
        The development of 5G, artificial intelligence, and the Internet of Things
        
        (Multi-Link Operation, MLO)" technology
        
        WIFI-7
        
        5G generative AI mobile chip
        
        Dimensity 9300
- - - - Export restrictions on textiles
      - Low value-added nature of the electronics industry
  - - - Government decided to develop the integrated circuit (IC) industry.
    - - Due to RCA's financial difficulties at the time
        
        RCA share its expertise to Taiwan engineers at a reasonable cost
    - - Acquire, introduce, and transfer new technologies to the private sector
        
        As a project manager
- - - - 63.8% of the world's semiconductors are manufactured in Taiwan.
      - The market share of high-end chips below 7 nanometers exceeds 70%.
    - - Semiconductors are the foundation of modern technology.
        
        Used in AI, IoT, 5G, cloud computing and other fields.
    - - Has a complete industrial cluster
        
        IC design, manufacturing, packaging, testing
        
        Advantage
        
        low cost
        
        high capacity
        
        flexible customization capability
        
        advanced technology
        
        Highly skilled talent
      - Geopolitical influence
        
        The US-China trade war and the pandemic have highlighted Taiwan's crucial position in the global supply chain.
      - International Cooperation
        
        Establishing a semiconductor ecosystem in collaboration with countries such as the United States, Europe, and Japan.
  - - - Midstream: IC manufacturing
        
        Process
        
        oxidation,
        
        etching
        
        ion implantation
        
        wafer foundry and memory IC manufacturer.
        
        :black_small_square:TSMC, UMC
      - Downstream: IC packaging and testing
        
        Packaging function
        
        protect the die, prevent pollution, enhance heat dissipation and electrical connection.
        
        Testing stage: wafer testing and IC finished product testing.
        
        :black_small_square:ASE Semiconductor, Licheng Technology.
      - Upstream: IC design
        
        :black_medium_square:Designing the circuit and specifications of the chip.
        
        :hammer_and_wrench:Use EDA (computer-aided design) to develop circuit layouts.
        
        Chip classification:
        
        memory IC,
        
        micro component IC
        
        analog IC,
        
        1 more item...
        
        :black_small_square:MediaTek, Realtek, Novatek.
    - - A clear division of labor between upstream and downstream suppliers reduces internal competition.
      - Partnership:
        
        Cooperation between enterprises improves efficiency.
  - - - In December 2023, Taiwan Semiconductor Company accounted for approximately 40% of the market value of the Taiwan Stock Exchange.
      - Foreign capital: More than 50% of foreign investment is concentrated in Taiwan semiconductor stocks, demonstrating the global capital market's confidence in Taiwan semiconductors.
    - - Wafer foundry:
        
        TSMC has a market share of 55% and is the world's largest foundry.
      - IC design:
        
        MediaTek, Realtek, etc. rank second in the world.
      - Packaging and testing:
        
        ASE Semiconductor and Licheng Technology are leading companies.
    - - Taiwan leads the world in 2-nanometer process technology and continues to invest in technological innovation.
      - Unique contract manufacturing business model (OEM) enhances competitiveness.
      - The science park integrates design, manufacturing, packaging and testing to form a complete industrial chain and ecosystem.
- - - - due to high stock levels, which is likely to affect MediaTek's sales in the short term.
        
        Customer uncertainty about future demand continues to be a key factor influencing purchasing behavior.
    - - The third and fourth quarters are typically considered the off-season for consumer electronics
    - - faces significant competition from major players like Qualcomm and Appleareas
        
        such as 5G, smartphone processors, and artificial intelligence (AI)
        
        MediaTek needs to maintain its technological edge and cost-effectiveness to sustain its market share.
  - - - Manufacturing Technology:
        
        3nm process by TSMC
      - Features:
        
        Supports more AI features
        
        higher average selling prices
      - Launch Time:
        
        Expected in October
      - Growth Outlook:
        
        expected to drive revenue growth of over 50% year-on-year
        
        continuing through 2025
    - - Progress:
        
        new specialized IC business is steadily progressing
        
        expected to start contributing to revenue in the second half of 2025
      - Market Focus:
        
        targeting the cloud and data center markets
        
        cloud-based data center operators are increasingly seeking custom chips
    - - Technological Leadership:
        
        has a strong technological base and a rich intellectual property (IP) portfolio
        
        well to maintain a competitive edge in the fast-evolving semiconductor market.
      - Flexible Business Model:
        
        flexible business model allows it to quickly adapt to changing market needs
        
        a key advantage in maintaining its competitive position
  - - - Q2: NT$ 16.19 (18.4% QoQ decline, 60.8% YoY increase)
        
        indicates strong long-term growth performance
    - - Q3: NT$ 123.5 billion to NT$ 132.4 billion
        
        signaling a continued slowdown in demand
    - - Q2: NT$ 29.96 billion (62% YoY growth, 18% QoQ decline)
        
        customers' stock replenishment peaked
      - Q3 Forecast: Expected to remain flat
        
        , mainly due to customers continuing to deplete existing inventories
        
        a slow recovery in demand
    - - Q2: 48.8%
      - Q3 Forecast: 45.5% to 48.5%
        
        rising costs and intensified market competition, which may affect overall profitability
  - - - expects a 15% year-on-year revenue growth in 2024
        
        Despite facing short-term market challenges
    - - positioning itself to capitalize on the rapidly growing cloud and AI markets
        
        These areas offer significant growth opportunities for the company.
  - - - Global economic uncertainties
        
        may impact MediaTek’s operations and financial forecasts.
    - - The promotion of 5G and AI will drive growth in the smartphone market, but it also introduces intense competition
        
        must continue to innovate and improve its smartphone processors to maintain its market position.
- - - - Eliminated UMC’s first-mover advantage :red_cross:
  - - - Joint ventures with clients
      - Overseas Acquisitions
      - Introduce an employee stock bonus plan
        
        Attract top talent
  - - - 130nm process
        
        :warning: Fell behind TSMC
      - 45nm process
  - - - Transistors consist of
        
        The gate
        
        Source
        
        Drain
  - - - From 65nm to 28/22nm
- - - - Succeed pressure
        
        As Taiwan’s first semiconductor company
    - - Economic Recession and Sales Struggles
        
        Operating under the IDM
        
        (Integrated Device Manufacturer)
        
        Only sell chips UMC designed and manufactured.
        
        :!!: 整合元件製造廠（Integrated device manufacturer，IDM）是指一家包括了設計、生產及銷售積體電路產品的半導體公司。
      - Limited Product Variety
        
        Struggled to meet market demand.
  - - - Focused on semiconductor manufacturing.
  - - - Promote competition in the industry
      - Concerns about UMC becoming a state-controlled monopoly