Pioneer Electronics News Weekly -- Electronics Industry Review for Week 9, 2023 for your reference.

Weekly Adventage:

Global Semiconductor News

1.?IC design demand cover, foundry Q2 decline is expected to converge.?

??Semiconductor manufacturers said it will take some time for the global economy to recover, but recently some of the largest manufacturers have seen signs of customer orders filling up, Taiwan's Electronic Times reported on February 20. Wafer foundries in IC design customer demand recovery and offering price discount strategy to stimulate the case, the second quarter decline is expected to restrain. Wafer foundries, which entered the bottom of industry utilization and performance in the first quarter, also received unexpected rush orders from customers recently. For example, Nvidia, which had previously cut orders from Taiwan Semiconductor, also increased orders again due to surging demand for AI chips in China.?

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2.?In 2023, server DRAM will account for 37.6 percent of output, surpassing mobile DRAM.?

??TrendForce's latest research shows that as the growth rate of smartphone shipments and average capacity growth remains conservative in 2023, the original product mix strategy will continue to increase the share of server DRAM. Server DRAM will account for 37.6 percent of output in 2023, surpassing mobile DRAM's 36.8 percent.

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3.?Mobile DRAM average carrying capacity is forecast to grow by about 6.7% year on year, better than 3.9% in 2022, but is forecast to fall below 10% per unit in each subsequent year.

?In terms of server DRAM, it is estimated that the average server DRAM capacity will increase by 12.1% annually in 2023. In addition, TrendForce estimates that enterprise SSDS are expected to become the largest production application of NAND Flash by 2025.

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4.?Micron clients have reported that it has cut production, but not cut prices.?

?Taiwan media Digital Times on February 20, a Micron customer confirmed that Micron does have production cuts, "but there is no price reduction." The client noted that with some brands and channel inventories still high and Micron having to cut production, "it looks like 2023 is going to be bad all year, and maybe the first half of 2024 is going to be better." But a foreign report last year said Micron would likely have to cut prices in the second half of 2023 to survive the storage crisis. If that happens, it will hit Micron's gross margins.?

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5. A source close to the situation said the cuts were based on performance.

??Purchasing, marketing and even engineering could be on the chopping block, "but new hires are coming in." From this point of view, although Micron is strictly controlling personnel costs, it still continues to recruit talents needed for future development.

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6. Prices of upstream storage resources NAND Flash Wafer and DDR fell all the way.?

??The latest data from the CFM Flash market shows that since the third quarter of 2022, upstream storage resources NAND Flash Wafer and DDR prices have been all the way down, NAND per GB price dropped from 0.063 to $0.027, a drop of as much as 57%, DDR4 8Gb price dropped from 3.42 to $2.04, a drop of 40%. In the face of uncertain short-term market prospects, storage manufacturers have also slowed down the development of more than 200 layers of NAND Flash and 1β?DRAM.

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7. Global automotive chips usher in a wave of production expansion.?

??Automotive chip manufacturers such as Infineon, Renesas, Texas Instruments and Rapidus have all started to build new fabs. The industry estimates that the four companies will spend $25 billion to expand production, which is likely to reduce outsourcing orders to Taiwan Semiconductor Manufacturing Co and United Electric Co, as well as pressure on Xindang, the largest auto microcontroller factory in Taiwan. In the global automotive chip market, Infineon is the industry leader, while Renesas and Teche are third and fourth. These three manufacturers are integrated component factories (IDMs) that design chips at the same time and have their own fabs, as well as analog IC, microcontroller and other products. In the past, they were mostly produced by Taiwan Semiconductor Manufacturing, United Electric and other wafer foundries.

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8. In recent years, in order to shorten the delivery time, major automotive chip manufacturers directly contact with wafer foundries for cooperation, especially the next generation of automotive IC design is more complex and requires higher level or special semiconductor manufacturing process support.?

??As these IDMs build up their own capacity, outsourcing orders are bound to be cut, pushing the wafer duo to take orders. Taiwan Semiconductor Manufacturing Co has also increased production capacity in response to a shortage of automotive chips. As semiconductor inventories adjust and large factories begin to open capacity, TSMC President Wei Char-jia has already said in French that demand for automotive semiconductors will continue to rise this year, but the shortage should ease soon.

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9. China southern Taiwan water shortage, wafer foundries pull alarm.?

??Some industrial and science parks in southern Taiwan will cut water consumption by 10% amid the worst drought in 30 years, the Taiwan Economic Daily reported. Water-intensive industries such as wafer foundry and panel manufacturing are alarmed. Tainan industrial and science parks will save 10% water. Industrial users in non-science parks and industrial parks will also need to save 10% water. High water consumption industries, such as wafer foundry and panel, will be warned. According to a BBC study in 2021, water prices in Taiwan averaged NT $11 (US $0.39) per ton, half the price in South Korea and a quarter of the price in the United States.

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10. SK Hynix may suffer production setback or improve DRAM status.?

??According to Taiwan media Economic Daily News, SK Hynix stressed that it has immediately cleaned the production line of the plant and production has not been affected in response to the equipment shutdown caused by quality problems of high K materials. However, industry insiders believe that even if some of SK Hynix's equipment is temporarily shut down, it will take some time for the equipment to restart, which will still delay the operation of the production line. Therefore, some of SK Hynix's production capacity will be affected. At a time when DRAM supply is oversupplied and large manufacturers are cutting production aggressively, SK Hynix's latest incident is likely to further reduce the market supply, which has the opportunity to improve the oversupply and reduce the pressure of high inventory.

（The?above?data?sources?are?collected?from?public?website?news.）