2022 to see strength moderate, but not correcting. We expect moderating strength  but still-positive outlooks reflecting still-positive demand drivers from ongoing 4G to 5G  upgrade, cloud data centre/AI/networking strength, automotive/industrial catching up with production supplemented by content, and so far resilient PC and IoT/smart home demand. 

At the same time, foundry supply growth is still manageable and the back-end has been  slowing its pace since 4Q21. We acknowledge inventory levels may stay elevated through  the year factoring in a continued run of disruptions, but could be a correction risk by 2023.

Key preview highlights. Key updates: (1) CS Semi forecast +26%/+15% in 2021-22,  with 2022 growth lifted by +10% ASPs annualising Dec-2021 pricing; (2) downstream  inventory elevated, adjustments reflected in CS -5% for semis in 2023; (3) foundry pricing  up in 1H22 led by TSMC across nodes and UMC’s 28nm, while back-end now flat; (4)  auto, due to content gains, can rebound further; (5) 5G still on track to grow from 545 mn  to 707 mn, with Android restocking in 1Q; (6) CS TSMC 2022 growth +24%, capex at  US$38 bn; and (7) bare wafer prices up 10% on 12”/5-10% on 8” in 2022.