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Chip Makers Ramp Up Production: 28/40nm Processes to Face Price Cuts

The semiconductor industry is witnessing a wave of price competition as traditional advanced processes see an expansion of production. Recently, actions in the semiconductor industry captivated the industry’s great interest. In particular, most companies started to highly increase the output of traditional process nodes like 28/40 nanometers.

This trend brings advantages of price competition to companies and intensifies the competitive pressure. Price pressure stems from rival competition, and customer demand as the pivot factor.

Amid the increasing demand for high-spec products, customers are requesting lower prices. TSMC and UMC's large-scale expansion plans have far-reaching effects on the market.

Comment: Reportedly, both TSMC's Nanjing plant and UMC's Xiamen plant in China are accelerating the expansion of their 28-nanometer processes. Chinese companies like SMIC and Huahong Group are also actively up-scaling the yield of mature processes. The participation of these companies will further ramp up market competition and drive rapid growth in the entire industry.

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BOE to Supply 2.5K Flexible OLED Central Control Screen for Zeekr’s New Car

BOE announced today the supply of a 15.05-inch suspended touch central control screen, a 13.02-inch crescent-shaped instrument screen, and a 6-inch rear multi-functional touch screen to the new Zeekr-001 model of Chinese auto Zeekr. The new vehicle model was rolled out on February 27th with a price ranging from 269,000 to 329,000 RMB.

The 15.05-inch 2.5K flexible OLED "Sunflower" central control screen used Tandem OLED technology, supporting multi-touch, with low blue light and low-frequency flicker eye protection technology.

Comment: BOE also offered the 6-inch rear multi-functional touch screen, supporting rear passengers to directly adjust functions such as seat heating, movement, and ambient lighting without disturbing the driver's seat.

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Power Semiconductors and MCU to be raised prices

Recently, power devices and MCUs entered a new round of price increases, but the market recovery is ambiguous. Price hikes are influenced by multiple factors. Although the industry seems to be regaining at present, some practitioners suggest that the price change is due to the cost rise.

Taiwan's power semiconductor manufacturers began raising prices by 10% to 20% at the end of 2023, citing increased raw material and labor costs leading to higher operating costs, according to the insiders. In addition, other Chinese companies are also raising prices for mid-to-low-end products.

The short-term price hike of mid-to-low-end product lines will hardly have an impact on Taiwan's enterprises; many MCU makers predict that inventory is forecast to decline to normal in the first quarter.

General MCU prices bottomed out with mounting costs, resulting in price hikes. In terms of Commercial Times, MCU manufacturers in Taiwan notified distributors to raise the prices of OTP MCUs.

Comment: Several Chinese MUC makers GigaDevice, SinoWealth, and Cmsemicon disclosed their MCU businesses for 2023. GigaDevice's 32-bit MCU spot prices showed a slight rebound in early January. The company stated that the biggest challenge for its MCU business in 2023 was destocking among industrial customers. In the consumer market, there was a mild recovery from the second half of 2023 to Q4. SinoWealth saw a 400 million RMB revenue for the fourth quarter in 2023, benefiting from the increase in orders for home appliance MCUs. Cmsemicon stated that its MCU products experienced structural shortages at the end of Q3 2023, mainly in the fields of consumer electronics and brushless motor control chips.

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Apple's iPhone sales in China plunge 24% as Huawei's popularity surges

Apple's iPhone sales in China fell 24% year-on-year in the first six weeks of 2024, according to research firm Counterpoint, as the U.S. company faced increased competition from Chinese rivals such as Huawei. Analyst Ming-Chi Kuo revealed that Apple has reduced orders for key semiconductor components used in iPhone 15 and iPhone 16.

Kuo predicts that iPhone sales are about to slide by 10% ~ 15% every half year in 2024, with total annual shipments down by 15%. This is mainly because the high-end market is shifting towards AI tech and foldable screen designs, while Huawei's return to the Chinese market also brings competitive pressure.

Samsung adjusted its expectations for iPhone 15 shipments and raised its forecast for shipments of its own Galaxy S24 Ultra, reflecting optimism about its AI capabilities.

Comment: Counterpoint Research indicated that the overall smartphone market in China declined by 7% in the first six weeks of this year. However, in the fierce competition, Huawei showed strong resilience, with sales surging by 64% in the first six weeks followed by the market share up about 6% to 16.5% compared to the last quarter.

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Foxconn, Tata, Wistron to Receive Over $530 Million in Subsidies from the Indian Government

The Indian government plans to provide subsidies of up to $530 million to companies like Foxconn, Tata Group, Wistron, as well as Samsung Electronics and domestic EMS manufacturer Dixcon Technologies through the Production-Linked Incentive (PLI) scheme in the fiscal year 2024. This plan aims to boost India's domestic mobile phone and electronic components manufacturing industry.

It is reported that the Indian government has set clear investment and production targets for the PLI for mobile phones and electronic components. Applicants will receive cash rewards upon achieving the targets. To be eligible for rewards, overseas companies must invest at least 2.5 billion rupees (roughly $30 million) in the first year and realize a certain increase in product value.

Comment: Indian officials said that about four-fifths of multinational companies reached their goals in the fiscal year 2023, so it is expected that the amount of rewards issued under the PLI plan in the fiscal year 2024 will hit a new high. India's mobile phone exports will gain between $14 billion and $15 billion by the end of the fiscal year 2024, projected the Indian Cellular & Electronics Association.