Qualcomm extended its capacity reservation agreement to source wafers from GlobalFoundries through 2028, said the companies Monday. The extension secures wafer supply and commitments to support U.S.-based manufacturing through capacity expansion at GF’s semiconductor fab in Malta, New York,30 miles north of Albany, they said. The new multimillion-dollar agreement “specifically extends” Qualcomm’s U.S.-based collaboration with GF in 5G transceivers, Wi-Fi, automotive and IoT connectivity, they said.

Qorvo, in fiscal Q1 ended July 2, fell $13 million short of its “minimum purchase” obligations under the “capacity reservation agreement” it signed a year ago with an unnamed foundry supplier at the peak of the semiconductor crunch (see 2208040009), said the chipmaker’s 10-Q filing at the SEC Thursday after the markets closed. The agreement authorized the supplier to deduct the “amount of the purchase shortfall,” $13 million, from the deposit that Qorvo prepaid to initiate the agreement, said the 10-Q. Qorvo estimates it will incur additional shortfalls of $86 million over the remaining life of the contract, it said. The agreement obligated Qorvo to buy $1.2 billion of wafers through the end of calendar 2025. The chipmaker depicted the purchase shortfall as reflective of how customer demand in the recent quarter had declined abruptly.

Samsung’s UFS 4.0 mobile storage, developed in May, is scheduled for mass production this month, said the company at Flash Memory Summit 2022 in Santa Clara this week. UFS 4.0 is a key component in flagship smartphones requiring large amounts of data processing for high-resolution images and graphics-heavy mobile games; it also has future mobile applications in virtual and augmented reality, the company said. Samsung also introduced a next-generation petabyte storage technology that will allow server manufacturers to increase storage capacity within the same floor space with a minimal number of servers, it said.

For Cirrus Logic, a top supplier of smartphone audio chips, the Android business this year “has really been supply-constrained,” said CEO John Forsyth on an earnings call Tuesday for fiscal Q1 ended June 25. “One of the impacts of that is having to be very selective about which circuits we chase within smartphones and elsewhere, but that has had an impact on our Android business.” It’s not a question of “being short to customers in a given month,” he said. “It’s a question of not committing to certain designs, if we didn’t feel confident we have the supply.” Cirrus anticipates its Android business “still being supply-constrained through the rest of fiscal 2023" ending late March, he said. “That said, we are well embedded in the flagship tier of that market and insofar as we can expand supply, we will look to do that and look to continue to build on the momentum that we have there.”

Despite the “additional softness” in the PC market in recent months, Advanced Micro Devices thinks it’s “very well positioned to navigate through the current environment,” said CEO Lisa Su on an earnings call Tuesday for fiscal Q2 ended June 25. Q2 revenue in AMD’s client segment, which includes desktop and notebook PC processors and chipsets, was $2.2 billion, up 25% year over year, driven by a “richer mix” of Ryzen-branded mobile processor sales, said the company. But AMD is adopting “a more conservative outlook on the PC business” for calendar 2022, said Su. “A quarter ago, we would have thought that the PC business would be down ... high-single digits. Our current view of the PC business is that it will be down ... mid-teens, and that’s contemplated into our third-quarter guidance.” That would put the industry PC shipments "somewhere around" 290 million to 300 million units for the year, said Su. AMD "deliberately focused" its PC market attention on "the more premium segments," she said. "There are some parts of the PC market that are very price-sensitive, like the low end." AMD has "tried to reduce our exposure there going forward," she said. "I don’t think the dynamics change a lot. I think it’s always a very competitive market and the key thing there is to have a very strong road map."

Business conditions “continue to be strong” as viewed through Microchip Technology’s “internal indicators,” said CEO Ganesh Moorthy on an earnings call Tuesday for fiscal Q1 ended June 30. Microchip’s revenue increased 25.1% year over year to $1.96 billion, marking the seventh straight quarter of record revenue growth, said Moorthy. Microchip expects to remain “supply-constrained” through the rest of 2022 and into 2023, he said. Demand in the quarter “continued to be insatiable despite the capacity increases we have implemented so far,” he said. Microchip’s “unsupported backlog,” defined as backlog that customers wanted shipped to them in the June quarter but couldn’t be delivered, climbed again, he said. “We exited the June quarter with our highest unsupported backlog ever, with unsupported backlog ... well above the actual revenue we achieve,” said the CEO. “We are cognizant of the weakening macro conditions resulting from rising inflation and the actions being taken by central banks in response.” Microchip is aware that there has been some “inventory build” at its major customers, “as can be seen in their balance sheet,” said Moorthy. Some of the build is likely due to “strategic” buffering, as a hedge against running out of supply, he said. “At the same time, the level of expedites and customer escalations we’re experiencing has not abated, indicating that demand and supply remain imbalanced from many customer situations.” Microchip is working “to best utilize the available supply,” he said. Its strategy is to “thoughtfully reallocate” future supply to “customers in distress,” he said.

Michigan Gov. Gretchen Whitmer (D) issued an executive directive telling her state's departments and agencies to take advantage of resources to be provided by the recently passed Chips and Science Act (see 2207280060). Tuesday’s directive said state bodies should designate a person to facilitate interdepartmental coordination and outreach with the private sector, higher education and others, and to do workforce development geared toward the semiconductor industry. “The ongoing chip crisis is having a stark impact on Michigan,” said Whitmer. “We need to move fast.”

Buoyed by congressional passage of the Chips Act (see 2207280060), the U.S. through 2025 will have the world’s highest growth rate in advanced nodes of wafer production, defined as 7 nanometers and below, when its share is expected to rise to 12%, from negligible share in 2022, reported TrendForce Monday. Chinese foundries are more active in expanding the production capacity of mature processes, 28 nanometers and above, “under the constraints of existing equipment” available under the Commerce Department's entity list and its export restrictions, it said. The increasing restrictions on China under the Chips Act could lead to rising "geopolitical risk," said the company. Beijing is "firmly against" provisions in the Chips Act that "restrict normal sci-tech cooperation between China and the U.S.," said a Chinese Foreign Affairs Ministry spokesperson after the legislation cleared the Senate last week. "China-U.S. science and technology cooperation serves the interests of both sides," said the spokesperson.

Demand in chipmaker Onsemi’s key “focus areas” of automotive and industrial “continues to outpace supply,” said CEO Hassane El-Khoury on a Q2 earnings call Monday. Record Q2 revenue of $2.09 billion was up 25% year over year and was the first time Onsemi -- formerly called On Semiconductor -- topped $2 billion in revenue in a single quarter, he said. The “volatility” in global energy markets is “driving an accelerated adoption of electric vehicles,” said the CEO. Though internal combustion engine vehicle sales were nearly flat in 2021, EVs grew by 94% and are expected to rise at a 22% compound annual growth rate in the next five years, reaching 45% of “total light vehicle” unit sales, he said. EVs require up to $700 of incremental Onsemi content for drive-train and onboard charging compared with an internal combustion engine car, he said.

Constraints from the “ongoing shortage” in semiconductors remain “the biggest limiting factor” in revenue growth for contract manufacturer Flex, said CEO Revathi Advaithi on an earnings call Wednesday for fiscal Q1 ended July 1. “We currently expect this trend to continue,” she said. Q1 revenue grew 16% year over year to $7.35 billion, “driven by continued strong demand and our ability to deliver in spite of ongoing component constraints,” she said. “Not surprisingly, we are seeing indications of slowing in some consumer-related markets. However, we have been anticipating this change, and it is within our current expectations for the full year.” Flex in recent years has “purposely deemphasized the most volatile and shorter-cycle businesses,” said Advaithi. Its consumer device revenue went from about 17% of its mix in 2018 “to now only 10% in fiscal 2022,” she said. “The macro environment remains highly uncertain, and none of this is to say we're immune to it, but we have effectively navigated the challenges over the last couple of years, and we have continued to adapt and improve.”