Semiconductor Market News (JAN. 01 to JAN. 07)丨An crucial orders for key components form Huawei; Computer storage prices to rise enormously in 2024...

01. Improvement in Memory Prices

Memory prices have?rebounded?since the fourth quarter of 2023, driven?by supply cuts and a recovery in demand for smartphones and PCs. According to the latest report, memory prices?are?expected to continue rising?in the first half of this year,?leading?to a significant rebound in profits?for?memory?manufacturers?in the second half of 2025.?

However, it is important to?note?that while memory demand is?expected to?recover this year, there is still uncertainty in the market.?The second half?of 2023 is expected?to see?a?normalization of OEM inventory levels,?followed?by?a?recovery?in?demand for smartphones and PCs?in the first half of this year.?It is also anticipated that server replenishment demand will appear in the second half of the year, after inventory adjustments are completed in the first half. Shipments of major products such as PCs, smartphones,?and servers are expected to increase this year. However, the uncertainty?surrounding?end demand and general server demand?may?result?in?a moderate pace?of growth?this year.?

Additionally, the demand for AI servers and high bandwidth memory (HBM) is?expected to?remain strong in 2024, driven by the continued expansion of device-side AI.

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02. Three Major Manufacturers Rumored to Increase Prices by 50%

By 2024, low-cost solid state drives?(SSDs) may become absolete. According?to?reports,?the three major memory manufacturers are?driving up the price of NAND flash memory,?which could?result?in?an increase in the price of all solid-state drives.

An industry?insider?revealed?that?NAND manufacturers,?who are?facing losses,?have been actively adjusting?their?prices.?As?these manufacturers follow suit, potentially?impacting the entire market.

Recent rumors?suggest?that SSD prices from memory manufacturers could?increase by 50%, with some sources?predicting at least?a?30% increase.?It is unclear whether this is a temporary?price correction or a result?of a?surge in market?demand, but?it is?something?that should be closely?monitored.

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03. Huawei Issues Rush Orders for Crucial Components, Focusing on CIS for Foldable Phones

In a strong push for foldable smartphones, reportedly, Huawei has issued rush orders to its supply chain lately. The shipment target for foldable threefold increase from the 2.6 million units shipped last year.

Previous rumors suggested that Huawei was considering lowering its foldable smartphone shipment targets for this year. However, the industry sources from related supply chain emphasizes that not only did Huawei refrain from reducing orders, but it significantly increased them.

According to Economic Daily News cited from supply chain sources, Huawei has set very ambitious goals for foldable smartphone shipments this year, aiming to increase from last year’s 2.6 million units to a range of 7 to 10 million units. This represents a nearly threefold increase, requiring additional support from various components.

Among them, the critical mobile phone component CIS, due to a rebound from the market downturn, has seen prices starting to surge. Main CIS supplier, Samsung, has raised prices by 25% to 30% this quarter.

To avoid the risk of escalating prices, CIS has become Huawei’s top priority for stocking up, primarily supplied by the Chinese CIS supplier, OmniVision. The substantial increase in overall shipment targets for foldable smartphone has driven a several-fold growth in?CIS stockpiles.

04. Toshiba Suspends NAND Factory Operations Due to Earthquake

Japan's 7.6-magnitude earthquake forced chip and electronics companies in Ishikawa Prefecture to suspend operations. Affected companies include Toshiba, GlobalWafers, Murata, etc.

The report pointed out that Toshiba has announced the closure of its NAND flash memory factory in Nomi City, Ishikawa Prefecture to conduct a safety assessment. The company said it will decide when to resume production once it completes an assessment of the production lines.

In addition, Taiyo Yuden, Tower, Shin-Etsu, GlobalWafers and TPSCo (a joint venture of Tower and Nuvoton) have also temporarily suspended the production of semiconductor products. Among them, Taiyo Yuden has issued a statement saying that there was no major damage to the buildings and production facilities at the group's production site, and Production is expected to resume after facility inspection.

05. New EU Standard: USB-C Becomes Universal Charger for Mobile Devices Starting 2024

In a groundbreaking move set to take effect in 2024, all mobile phones, tablets, and cameras will be required to adopt a common charging port known as USB-C, as declared by the European Commission in a recent announcement on Facebook.

"The wait is over. From 2024 onwards, USB-C will be the unique standard for all electronic devices in the EU. No more hearing 'Sorry, I don't have that cable' after 2024," proclaimed the European Commission, noting that the positive effects are already becoming evident.

This significant change means that all phones, tablets, and cameras will share a common charger, leading to standardized fast-charging technology and a reduction in e-waste.

Thanks to the new regulations, consumers will no longer need a new charger for each device, as they can use a universal charger for a wide range of small and medium-sized electronic devices.

And this move was greeted by a wave of positivity on social media. “The EU has once again proved that it is a global leader in setting the highest quality standards and promoting quality lifestyle all around the EU,” wrote one comment and another simply stated “Thanks to the MEPs for pushing forward the common standard for electronic devices.”

It's important to note that this change will not take immediate effect on January 1 of the new year but will undergo a specific adaptation period. The mandatory use of a universal charger is expected to commence by the end of 2024 for all mobile phones, tablets, and other electronic devices covered by the revision. Furthermore, from 2026, the same universal charger will be utilized for laptops.

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06. NVIDIA’s China-exclusive Chip H20 to Begin Production in Q2 by Wistron

In October of 2023, the U.S. government expanded its restrictions on chip exports, limiting NVIDIA from exporting certain chips to China without prior permission. Despite this, NVIDIA is not expected to relinquish the Chinese market and may commence production of the AI chip “H20,” specifically designed for China, in the second quarter of this year.

According to a report from Wccftech, there is keen interest in NVIDIA’s potential exclusive chips for China, including H20, L20, and L2, intended to replace H100, L40, and L4, catering to the AI training needs of Chinese customers.

The orders from the relevant supply chain manufacturers’ clients will be deferred and are expected to see substantial shipments starting from the second quarter.

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