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From late April to the current period, the major IC manufacturers have been announcing their first quarter financial results. Against the backdrop of a weak consumer market, the performance growth of IC original manufacturers is generally being tested. The automotive and industrial sectors have become the main drivers for the performance improvement of the major IC manufacturers

TI: Revenue and profit both down, automotive business up

TI's first quarter revenue of $4.379 billion, down 11% year-on-year; net profit of $1.708 billion, down 22% year-on-year. Analog business of $3.289 billion, down 14% year-on-year; operating profit of $1.574 billion, down 27% year-on-year. Embedded processing business revenue of US$832 million, up 6% year-on-year; operating profit of US$237 million, down 25% year-on-year.

The information revealed that TI's automotive business revenue increased by about 4-6% QoQ in the first quarter, the industrial business revenue was about flat, the communication equipment business revenue decreased by about 14-16% QoQ, personal electronics and enterprise system revenue had the biggest impact, both decreased by about 30% QoQ respectively.

TI said that, as expected, demand was weak in all end markets except automotive, and TI expects second quarter revenue to be between $4.17 billion and $4.53 billion.

ST: Revenues and profits remain up year-on-year

ST's first quarter revenue was US$4,247 million, up 19.8% year-on-year and down 4% sequentially, while net profit was US$1,044 million, up 39.8% year-on-year and down 16.3% sequentially.

The Automotive and Discrete Devices segment had revenue of US$1.807 billion, up 43.9 per cent year-on-year and 6.5 per cent sequentially; the Analog, MEMS and Sensing segment had revenue of US$1.068 billion, down 0.9 per cent year-on-year and 20.3 per cent sequentially; and the MCU and Digital IC segment had revenue of US$1.368 billion, up 13.2 per cent year-on-year and down 1.1 per cent sequentially.

ST President and CEO Jean-Marc Chery said ST revenue was higher than expected in the first quarter, but revenue in the personal electronics segment declined, and second quarter revenue was approximately US$4.28 billion, up 11.5 per cent year-over-year and 0.8 per cent sequentially.

Microchip: record earnings, but begins to guard against inventory risk

Microchip's fourth fiscal quarter (ending March) revenue closed at a record high of US$2.233 billion, up 21.1% year-on-year, and net profit was a record US$604 million, up 37.9% year-on-year. For the full 2023 fiscal year, revenues were a record $8.439 billion, up 23.7% from the previous year, and net income was $2.238 billion, up 74% from the previous year.

Ganesh Moorthy, Microchip's president and chief executive officer, said Microchip had achieved its tenth consecutive quarter of growth and higher profitability, adding that the company was deferring a large number of orders at the request of customers to help them improve their inventory position, which would increase the company's inventory levels. However, Microchip believes that the risk of product obsolescence due to increased inventory is very low.

Infineon: Growth continues, expectations raised again

Infineon's revenue for the second fiscal quarter (to the end of March) was €4,119 million, up 25 percent year-on-year and 4 percent sequentially, while net profit was €826 million, up 76 percent year-on-year and 13 percent sequentially.

Infineon CEO Jochen Hanebeck said that the company's business in electric vehicles, renewable energy generation and energy infrastructure grew strongly. There is overall confidence in Infineon's future performance, although improvements in consumer markets such as smartphones, PCs and home appliances are not yet evident. The company's revenue and profit estimates for the full fiscal year have been raised again.

NXP: earnings growth hindered, automotive business still growing

NXP's first quarter revenue of US$3.12 billion was only marginally different year-on-year and down 6% sequentially; GAAP operating profit of US$825 million was down 5% year-on-year and down 16% sequentially.

Automotive revenue of US$1.828 billion was up 17% year-on-year and 1% sequentially. Industrial and IoT revenue of $504 million, down 26% year-over-year and 17% sequentially. Mobile revenue of US$260 million was down 35% year-on-year and 36% sequentially. Revenue from the Communications Infrastructure and Other business was US$529 million, up 7% year-on-year and up 7% sequentially.

NXP CEO Kurt Sievers said that all of the company's key end markets performed better than expected, with continued strength in the automotive and core industrial businesses. The company remains cautiously optimistic about successfully weathering the cyclical downturn in the consumer business.

ON Semiconductor: Automotive and industrial revenue share at record high

ON Semiconductor reported first quarter revenue of US$1,959.7 million, up 1% year-on-year, and net income of US$461.7 million, down 12.91% year-on-year. ON Semiconductor mentioned that revenues from the automotive market grew 38% year-on-year and accounted for a record 50% of total revenues, while automotive and industrial end markets together accounted for a record 79% of revenues.

Renesas: Results keep growing

Renesas reported revenue of 35.94 billion yen in the first quarter, up 3.8% year-on-year, and operating profit of 12.33 billion yen, up 23.5% year-on-year.

Today's "core" news

1.TSMC plans to build a 28nm fab in Germany to serve automotive customers such as NXP
TSMC plans to build a 28nm fab in Germany, according to a report by TechWeb citing foreign media, sources familiar with the matter said TSMC is in talks with its partners (NXP, Bosch and Infineon) to invest up to 10 billion euros to build a chip manufacturing plant in Saxony, Germany, which will focus on producing 28nm chips and will be TSMC's first fab in the EU.
TSMC's partners' knowledge of the local business will help in planning and raising government assistance. If negotiations go well, the Saxony chip fab project could receive TSMC's approval in August.

2. Qualcomm's second quarter net profit down 42% year-on-year
According to IT House, Qualcomm today announced its fiscal second quarter results as of March 26, with revenue of $9.275 billion, down 17 percent year-on-year; net profit of $1.704 billion, down 42 percent year-on-year. Qualcomm said the smartphone industry will take longer to run out of excess chip inventory before new orders come in, and Qualcomm expects chip revenue of US$6.9 billion to US$7.5 billion.
Within Qualcomm's CDMA Technologies Group, revenue from the mobile phone chip business was US$6.105 billion in the second fiscal quarter, down 17 per cent year-on-year; revenue from the automotive chip business was US$447 million, up 20 per cent year-on-year; and revenue from the Internet of Things business was US$1.390 billion, down 24 per cent year-on-year.

3. Smartphone brands continuously place revised orders, MediaTek's second quarter outlook conservative
According to the China Taiwan Business Times, MediaTek's second quarter outlook is conservative, the industry pointed out that MediaTek plays the role of the weather vane, the performance of the market conditions have been consensus, but the extent is still unexpected, coupled with MediaTek's rival Qualcomm this year in mainland China market price cuts to clear inventory, MediaTek released a conservative outlook, which may lead the rest of the IC design houses to re-evaluate the number of investment, inventory strategy.
The IC design industry said that the main mobile phone brand factories including OPPO, Vivo, Xiaomi have been placing revised orders every month so far this year, with only Transon, which focuses on the African market, raising its shipment target against the trend. So far this year but five months, equal to the mainland mobile phone brand factory has been five times revised shipments, weakness is evident. MediaTek's inventory turnover days in the first quarter reached 128 days, compared with the previous quarter, not a reduction but an increase.

4. The global mobile phone market fell 14% in the first quarter, with all five major manufacturers down
According to the latest report released by market research firm Counterpoint Research, the global smartphone market shipped 280.2 million units in the first quarter of 2023, down 14 percent year-on-year and 7 percent sequentially, IT House reported.
Samsung, Apple, Xiaomi, OPPO and Vivo all saw declines in mobile phone shipments for the five major handset manufacturers, except for Apple, which saw the smallest decline of just 2 percent. The other four vendors all saw double-digit declines, with Xiaomi posting the largest drop of 22%.

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