Semiconductor Market News (APR.08 to APR.14)| Hot Demand for 5G and Energy Storage, Industrial Control IC; Xiaomi SU7 Supply Chain Exposed...

01. Strong Demand for 5G Communications and Energy Storage, While Industrial Control IC Inventory Still Needs Adjustment

ANSWER TECHNOLOGY, a solution provider for industrial control ICs, recently stated that there will continue to be inventory pressure on industrial control ICs in the first half of 2024, with customers showing a conservative approach to restocking. However, demand for markets related to industrial control, semiconductor testing, and instrumentation is expected to rebound in the second half of the year.

ANSWER TECHNOLOGY?further pointed out that end customers of ADI?and AMD, the two major agency lines, are still facing pressure from industry destocking, which is affecting their willingness to restock. In the first quarter of 2024, demand for applications such as 5G communications, power grids, energy storage, and new energy remains strong in the ADI agency line.

02. Foxconn and Quanta Boost AI Server Production

Foxconn, Quanta, and Wistron Factories ramp up AI server production amid slowing demand for smartphones and computers, targeting surge in demand from us companies. Foxconn, well-known for manufacturing iPhones, is positioning AI server-related business as one of its growth pillars, with a predicted annual sales growth rate of over 40% this year.

Similarly, Quanta, focusing on manufacturing Apple MacBook and other computers, has also prioritized AI server production as a secondary pillar, expecting sales growth this year. The company has recently expanded capacity in the US and Germany, announcing plans in March to invest approximately 24.7 million euros to lease a factory building in eastern Germany.

Wistron is also boosting server production, expecting sales in this area to double this year. The company decided last year to sell an iPhone manufacturing plant in India to the Tata Group and shift resources to servers

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03. Renesas Restarts the Shuttered Plant to Meet the Power Chip Demand

Renesas Electronics Corporation, a premier supplier of advanced semiconductor solutions, today announced that it has started operations at its Kofu Factory, located in Kai City, Yamanashi Prefecture, Japan.

Renesas aims to boost its production capacity of power semiconductors in anticipation of the growing demand for electric vehicles (EVs). To celebrate this milestone, Renesas held an opening ceremony on April 11 with local government officials and partner companies in attendance.

The Kofu Factory previously operated both 150mm and 200mm wafer fabrication lines under Renesas Semiconductor Manufacturing Co., Ltd, a wholly-owned subsidiary of Renesas, but ceased operations in October 2014. Renesas decided to re-open the factory in May 2022 as a 300-mm wafer fab to support the growing demand for power semiconductors, which is propelled by the industry-wide goal to realize a decarbonized society. Renesas conducted a 90-billion-yen worth investment in 2022 and has now started operations. The factory will start mass production of IGBTs and other products in 2025, doubling Renesas’ current production capacity for power semiconductors.

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04. Marvell Wins New AI Chip Business, But at Lower Margins

April 11 (Reuters) - Marvell Technology?has won new business helping large U.S.-based cloud computing firms make custom chips for artificial intelligence it said on Thursday, but noted that its custom unit carries lower margins than other lines of business.

Shares fell 2.7% after Marvell executives discussed the business during an investor presentation.

Marvell said it expects the AI chip business to hit $2.5 billion in sales by its fiscal 2026. Marvell helps customers such as Amazon design custom chips for their cloud units and competes against rivals such as Alphabet?supplier Broadcom?which has said it expects $10 billion in AI chip sales this year.

Marvell CEO Matt Murphy said during the presentation that the company has in production a custom AI chip for one cloud computing company and a central processor based on technology from Arm Holdings?for another, both of which will generate revenue this year.

He disclosed for the first time that Marvell is developing an AI chip for a third customer that will go into production in 2026.

Murphy also told investors that gross margins on custom chips are lower than the company's off-the-shelf offerings, which it calls "merchant" chips.

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05. Apple Reportedly Doubles iPhone Production in India, while Foxconn Holds 67% Share

Apple has significantly expanded its production capacity in India to reduce reliance on China, doubling iPhone production last year. Foxconn, the largest iPhone assembler, contributed to 67% of this increased production. According to Bloomberg, Apple's iPhone production value in India doubled to USD 14 billion in the last fiscal year, with up to 14% of total production now made in India. This move reflects Apple's strategy to diversify its manufacturing base amid geopolitical tensions.

Foxconn accounted for 67% of iPhones produced in India last year, with Pegatron at 17% and Wistron (now owned by Tata Group) also contributing. Pegatron was reportedly in talks to sell its Chennai plant to Tata Group, although Pegatron dismissed this as speculative. Chennai, where Pegatron's factory is located, is a key industrial hub in South India, employing 10,000 workers and producing 5 million iPhones annually. Tata Group currently manufactures certain iPhone 15 series models in India.

06. Xiaomi SU7 car storage providers include Micron, Silicon Motion

Xiaomi's electric car SU7 has garnered significant market attention since its launch. According to industry teardown reports, the initial batch of in-car storage suppliers for the SU7 has been revealed, with Micron taking the lead in supplying LPDDR4 and UFS automotive storage. Specifically, Micron's UFS2.2 and UFS3.1 storage products are paired with Himax controllers.