Cerfe Labs applauds the Biden administration’s increased focus on semiconductors as “a national strategic priority,” but it should resist chasing short-term solutions to the detriment of long-term goals, commented the microelectronics R&D startup in the Commerce Department's Bureau of Industry and Security inquiry into how the U.S. can help boost the domestic semiconductor industry’s competitiveness and capacity amid global chip shortages (see 2103110054). “We expect that the vast majority of the attention and dollars in this effort will be spent on replicating state of the art semiconductor manufacturing and packaging capabilities domestically,” said Cerfe, in Friday’s posting in docket BIS-2021-0011. “This investment will be large and will have focus on near term capabilities and immediate jobs,” but will yield technologies that “will quickly begin aging,” losing their state of the art (SOTA) status in “a few short years,” it said. It also “risks a missed opportunity to lay a groundwork” for more future-proof microelectronics, it said. Countries that “invest strategically in accelerating the process from early-stage R&D proofs of concept to manufacturable technology will be poised to take over dominant positions in SOTA microelectronics well into the future,” it said. “Every week we see evidence of enhanced willingness of other countries to invest more heavily, so there is risk of losing a leadership position in future microelectronics technologies with no action or delayed action.” Though near-term semiconductor supply chain issues are important, the administration should “not lose sight of the long term leadership opportunity that can be had through fostering of a new wave of microelectronics start-up companies,” it said. Comments in the docket are due April 5.

Intel is expanding operations in Chandler, Arizona, with two new chip factories as part of its integrated device manufacturing model strategy, it said Wednesday. The fabs will support Intel products and customers as well as committed capacity for foundry customers, it said. Buildout cost is about $20 billion. It’s expected to create more than 3,000 permanent high-wage, high-tech jobs, over 3,000 construction jobs and 15,000 local long-term positions.

The global smartphone CMOS image sensor (CIS) market had $15 billion in 2020 revenue, growing 13% year on year, said Strategy Analytics Tuesday. Smartphone OEMs “aggressively adopted high-resolution sensors and higher sensor count across smartphone tiers in 2020," creating strong demand, said analyst Jeffrey Mathews. The expansion of multiple cameras and advanced photography capabilities in smartphones will fuel more demand that could be challenged by semiconductor shortages, said analyst Stephen Entwistle. Sony led with 46% share, followed by Samsung System LSI and OmniVision. The three chip vendors had about 85% of the market, but Sony’s market dominance will be threatened by increasing competition in the segment, said Mathews.

COVID-19 drove “unprecedented” government investment in education technology last year, reported Futuresource Wednesday. Demand, component shortages and supply chain issues stretched delivery times into 2021, straining the mobile PC supply chain "like never before," said analyst Michael Boreham. Global PC demand in the K-12 market swelled 69% vs. 2019 to reach 51 million units, while overall mobile PC demand in Q4 soared 209% to 16.5 million units, it said. Google’s Chrome operating system led the global mobile segment with 44% share, vs. 32% for Windows, said the researcher. Some schools are keeping older devices in use longer to ensure students have access to a device.

The Commerce Department's Bureau of Industry and Security seeks comments on how the Biden administration can help boost the U.S. semiconductor industry’s competitiveness and capacity amid global chip shortages, says a notice for Monday’s Federal Register. The comments, due April 5 in docket BIS-2021-0011, will help shape Commerce’s policy recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve bottlenecks in the semiconductor supply chain. BIS especially wants feedback on “the availability of the key skill sets and personnel” needed to sustain a competitive semiconductor industry, plus the risks that will result from a failure to develop domestic “manufacturing capabilities,” and the resilience of U.S. supply chains to support “emergency preparedness,” says the notice.

Global shipments of traditional PCs are forecast to grow 18.2% this year to 357.4 million units, on top of the 12.9% growth in 2020, reported IDC Wednesday. “The largest drivers of demand continue to be consumers and students needing reliable systems to be productive and connected.” IDC also believes “strong demand exists for new PCs to enable hybrid use cases that will be required as the world finds a post COVID-19 normal,” it said. It projected the market will sustain a 2.5% compound annual growth rate through 2025. PC demand will continue experiencing “meaningful tailwinds," said IDC analyst Ryan Reith. "This is all happening while education backlogs continue to grow and retail channel inventory in many geographies is still well below historical levels.” There was a large backlog of PC shipments heading into 2021, said IDC. “Depending on how long this demand continues there is a strong likelihood we will enter 2022 with an outsized backlog, albeit not as significant as current levels." Supply concerns for the PC industry remain due to global semiconductor shortages, and as strong demand continues, “so does the pressure on suppliers to increase capacity,” said IDC: “Assuming no further supply disruptions, PC supply and manufacturing capacity should be in balance by the middle of 2021.”

January semiconductor sales increased 13.2% globally from a year earlier to $40 billion, and were up 1% sequentially from December, reported the Semiconductor Industry Association Monday. “Global semiconductor production is on the rise to meet increasing demand and ease the ongoing chip shortage affecting the auto sector and others, and annual sales are projected to increase in 2021,” said SIA CEO John Neuffer. Year-on-year sales in the Americas were up 15.4% in January, second only to Asia Pacific (up 16%), said SIA. Month-on-month sales were down 3% in the Americas and 1% in Japan but up by single digits in all other regions, it said.

The federal government should commit $35 billion over five years for semiconductor R&D, manufacturing and other artificial intelligence-related investments, the National Security Commission on Artificial Intelligence urged Monday. It recommended $15 billion for federal microelectronics manufacturing grants, $12 billion for microelectronics R&D, $7 billion for microelectronics infrastructure and $500 million for DOD trusted and assured microelectronics. The Semiconductor Industry Association welcomed the report, noting its call for “a national microelectronics strategy, revitalizing domestic microelectronics fabrication, and ramping up microelectronics research.” President Joe Biden should follow the report’s recommendation to create a national AI strategy, said Information Technology and Innovation Foundation Center for Data Innovation policy analyst Hodan Omaar.

Consider including ISPs "in measures to address the chip shortage, support initiatives that will expand domestic innovation and investment in semiconductor development and manufacturing facilities for all industries and ensure coordination across government and with industry partners on supply chain matters,” four ISP groups urged President Joe Biden Thursday. Biden signed an executive order Wednesday, as expected (see 2102240065), that directs agencies do a 100-day comprehensive review of U.S. supply chains for semiconductors and three other products. It directs the Commerce Department to do a one-year review of the U.S. supply chain for information and communications technology. “Take a whole-of-government approach” in its review of U.S. supply chain issues “and leverage existing public-private partnerships addressing specific supply chain risks,” ACA Connects, CTIA, NCTA and USTelecom wrote Biden. “Work with Congress to fully fund” the Creating Helpful Incentives to Produce Semiconductors for America Act. The measure passed in the FY 2021 National Defense Authorization Act (see 2101030002).

The semiconductor industry is reacting quickly to the “demand dynamics” of the global chip shortage, creating “an inventory-driven semiconductor upcycle,” said Photronics CEO Peter Kirlin on a fiscal Q1 call Wednesday. The company supplies photo masks, equipment tools and ICs to panel makers and offers a telling bellwether of display industry health. “Pending the installation of additional capacity, particularly at the high-end logic node, semiconductor manufacturers are focusing their resources on increasing output of needed chips and not on releasing new products,” said Kirlin. “New design activity has been constrained, which to us, resembles a semiconductor-induced recycle of old.” That's causing design innovation among panel maker customers to lag behind that of “capital equipment suppliers” like Photronics “by one to two quarters,” he said. Once new Photronics “tools” are installed at the panel fabs, and the new capacity comes online and inventory levels are replenished, “the dam breaks, and a wave of new design flows,” he said. Photronics is “oversold” in its photo mask capacity for Asian panel customers in the “mainstream” display segment, including for high-demand smaller-screen TVs, said Kirlin. That “sets the stage to do things that we have never been able to do in the mainstream, which is to start to nibble at raising prices,” he said. “We’re in a dynamic now where we expect to see pricing move up instead of down in the mainstream market segment." Pricing began inching upward in mainstream display photo masks in the current quarter that opened Feb. 1, he said. "As we step through the year, we’ll see how far we can take that.” Price increases won’t have a “big impact” on Photronics revenue “but will have a disproportionate effect on profitability,” he said. “Obviously, we like that trend.” Photronics expects "a lot of AMOLED capacity to come online" among panel makers, especially in China, fueled partly by demand for 5G smartphones, said Kirlin. "The AMOLED capacity we're installing this year, as soon as it comes online, we believe we should be able to fill it. And the entire factory for the rest of the year, we believe should be fully sold. So we're feeling good about AMOLED and what should constrain our revenues is our ability to install and ramp those new tools."