ELECTRONICS NEWS HIGHLIGHT W35.2023

1. EMS market to reach USD 694.4 billion by 2022

According to New Venture Research, the electronics manufacturing services (EMS) market has grown and reached an all-time high of $694.4 billion by 2022.

According to NVR’s 2023 report, the manufacturing market, including EMS and ODM, is sustained by strong demand in the automotive, aerospace/military and medical markets. On the other hand, orders for tablets, desktops, laptops and servers weakened in 2022 due to reduced market demand and inventories from previous years.

EMS companies experienced the highest average growth over the past 5 years, achieving a CAGR of 8.6%, while ODM companies experienced a slightly lower growth rate of 4.6%. Both sectors were hit by a drop in PCs and smartphones, which were already in overstocking compared to the previous year’s spike.

Learn more: EMS Market Reaches $694.4 Billion in 2022

2. Samsung increased investment in semiconductors in the first half of the year

According to BusinessKorea, Samsung Electronics made the largest equipment investment ever in the first half of 2023.

According to Samsung Electronics’ financial report, equipment investment in the first half of 2023 reached 25.2593 trillion won, an increase of about 24.7% from 20.2519 trillion won in the same period last year, of which 92% was invested in the semiconductor field. Samsung Electronics’ research and development expenses in the first half of the year reached 13.0777 trillion won, an increase of 13.1% from 12.1771 trillion won in the first half of 2022.

Although the sluggish memory chip market caused Samsung’s semiconductor division to lose 9 trillion won in the first half of the year, the company continued to invest.

Industry insiders believe that the purpose of Samsung Electronics’ large-scale investment in semiconductor equipment is to narrow the gap with other chip manufacturers; in addition, Samsung also plans to carry out large-scale mergers and acquisitions in the future.

Learn more: Samsung Ramps up Its Investments While Other Chipmakers Cut Theirs

3. Nikkei – Global semiconductor equipment investment is expected to down 16% in 2023

According to Nikkei Asia, it is expected that the investment in equipment in semiconductor factories will decrease by 16% annually to US$122 billion in 2023, the first decline in four years, and the decline will be the largest in the past 10 years.

According to reports, various semiconductor factories are cautious about investment due to the slowdown in demand in mainland China. In 2023, the top 10 semiconductor factories will reduce their investment in memory chips by 44% annually, and their investment in logic semiconductors for computing will also decrease by 14%.

With the successive introduction of semiconductor stimulus policies by governments of various countries in recent years, the investment of the top 10 semiconductor factories in 2022 reached 146 billion US dollars, a record high.

As of the end of June 2023, the inventory reached 88.9 billion US dollars, an increase of 10% compared with a year ago, and an increase of 70% compared with 2020. Due to severe excess inventory, Micron cut production by 30% and equipment investment by 40%. SK Hynix further expanded production cuts by 5-10% and investment by more than 50%.