Covid-19 delivers a mixed blessing

Written by Richard Stevenson for CompoundSemiconductor. net – The pandemic is behind soaring sales in some sectors of the compound semiconductor industry, while others take a hit or continue along an existing trajectory.

We have all suffered from the pandemic on a personal level. Loved ones have been lost, many of us have had to stay at home for weeks on end, and life is not nearly as much fun as it used to be.

However, when it comes to business, it is a very different state of affairs, as we are not sharing in the pain. While millions have been made redundant and countless more had their pay packet cut, some have benefitted from Covid-19. It is well publicised that Jeff Bezos, the owner of Amazon, has nearly doubled his wealth, and some of the providers and distributors of PPE equipment have lined their pockets by applying extortionate margins. Many others that have also done well, growing their investments and swelling their pension funds, thanks to soaring share prices of some companies.

But what about the compound semiconductor industry? Is it a winner, a loser, or a bit of both?

For any manufacturer, the outcome is always influenced by two critical factors. One is the ability to churn out product. Is there a reliable supply of materials? And is the production facility able to run at high capacity? Succeeding on this front is no guarantee of making a profit, however, as financial success also hinges on having strong demand for what is being produced.

Sales of SiC are growing fast, thanks to deployment of these devices in the Tesla 3, X and S models.

Like makers of any class of goods, production facilities within the compound semiconductor industry have suffered from logistical issues, while manufacturing efficiency has been pegged back by the introduction of new practices to minimise transmission of Covid-19. The good news, though, is that the disruption from the pandemic has been fairly minor – it is certainly less than that within the automotive industry, which, for example, saw Tesla’s plants in Shanghai and California shut for a couple of months. Helping chipmakers has been the backing of governments, who are keen to maintain economic activity and view semiconductor production as a critical activity.

Within the semiconductor industry, companies have taken broadly similar approaches. Two of the biggest European players, ST Microelectronics and Infineon, have scaled back production at times – but by not shutting, they have been able to quickly return to normal levels of production. It’s a similar story for the two biggest players in the GaAs RF industry, Qorvo and Skyworks. The latter briefly shut its facility in Mexico, before coming back very quickly, while Qorvo didn’t stop, with the US Government viewing this chipmaker as an essential business.

Increasing sales of SiC power devices are being driven by the electric vehicle industry. Source: Compound Semiconductor Quarterly Market Monitor, Q4, 2020. Module II, Yole Développement.

When it comes to demand, the picture is more complex across the compound semiconductor industry. To understand the impact of the coronavirus, one needs to consider consequences sector by sector. That requires expertise in all areas, from LEDs to lasers, power electronics and RF. Offering such a comprehensive coverage is Yole Développement, which has a team of market analysts covering all the critical bases. They reveal that the consequences of Covid-19 are incredibly varied. The pandemic has had little impact on some sectors, with changes driven by other factors; but this device is also behind some phenomenal successes and depressed sales…. Full article

Full January 2021 issue: Here