Semiconductor Market News (JAN. 29 to FEB. 04)丨2024 sees constant server demand with AI expansion; Pre-orders open for Nvidia's H20 AI chip...

01. South Korean memory chips lift national exports in January for a strong start to 2024

South Korean exports maintained growth momentum in January in a positive start to 2024, as demand for semiconductors continued to improve.

The biggest driver of the export rebound has been memory chips. Semiconductor exports increased 56.2 percent from a year earlier in January, the customs office said, the biggest rise since December 2017.

02. Inventec expects AI server shipments to surge in 2024

Inventec's AI server shipments in 2024 are predicted to more than double compared to 2023, according to Jack Tsai, president of the Taiwan-based ODM. Tsai noted the increased average unit cost of AI servers will also result in a more pronounced revenue contribution.

Nonetheless, Tsai added that 2024 will be a challenging year due to the volatility of market conditions. ??The only certainty is that the future of the AI market is bright.

Inventec expects a small single-digit revenue gain this year, but AI server sales will account for a double-digit percentage of revenue in 2024, up from 5-6% last year, Tsai indicated.

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03. Samsung selectively adjusts memory capacity to boost prices

Samsung's Q4 2023 financials reveal success in curbing DRAM/NAND price declines via strategic memory production cuts, notably reducing semiconductor business losses. The market anticipates Samsung's ongoing memory capacity adjustments to further boost prices.

TrendForce data highlights a shift in DRAM contract prices, falling for eight consecutive quarters until a Q4 2023 rise. Similarly, NAND Flash prices declined for four seasons before rebounding in Q3 2023. Major suppliers' effective production cuts are credited for the memory price uptick.

Media reports indicate Samsung's continued selective adjustments to DRAM and NAND Flash production in response to rising memory prices. Despite an expected Q1 decrease in bit shipments due to the traditional off-season, quotes are projected to rise based on market demand.

Samsung acknowledges positive signs of overall memory demand recovery, attributed to increased memory capacity in PCs and smartphones, augmented demand for generative AI servers, and customer inventory normalization. With only 8 to 10 weeks of DRAM inventory left, Samsung foresees a return to normal levels by Q1 2024, while NAND Flash inventory is expected to normalize in H1 2024. These adjustments, coupled with production tweaks, are likely to sustain price hikes.

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04. Nvidia’s tailored-for-China H20 AI chip now available for pre-order

Nvidia is making a strategic return to the Chinese market by introducing its China-specific H20 AI chip, a move that comes after US policies affected the company’s sales in China. ?Nvidia has begun taking pre-orders from distributors for its H20 AI chips, priced almost on par with Huawei’s Ascend 910B, according to Reuters.

According to industry sources quoted in the report, the specifications of the H20 are inferior to those of Huawei's Ascend 910B in some key areas.?

Additionally, in recent weeks, NVIDIA's orders for H20 distributors in our country have been priced between $12,000 and $15,000 per unit. It is worth noting that the server pre-installed with eight AI chips provided by the distributor is priced at 1.4 million yuan.?In?comparison, a server with eight H800 chips launched a year ago costs approximately?2 million yuan.?

Furthermore, the report?states?that distributors have informed customers that they will begin?small deliveries of H20 products in the first quarter of 2024 and volume deliveries in the second quarter.

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05. Wistron maintains high capital expenditure, building factories in Vietnam and Mexico

Wistron's Chairman, Lin Hsien-ming, recently stated that the company will uphold substantial capital expenditure this year. Factories are under construction in Mexico and Vietnam, and there are plans for a new facility in California, USA, to manufacture high-end EV products.

Lin Hsien-ming explained that Wistron currently has manufacturing facilities in mainland China (Kunshan, Zhongshan, Chongqing, Chengdu), Malaysia, Vietnam, India, the United States, and the Czech Republic. Additionally, although Wistron's Indian factory has been relocated, some business operations persist.

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06. SK Hynix to build an advanced plant in Indiana in a boost to US chip self-sufficiency

Feb 1 (Reuters) - South Korean chipmaker SK Hynix has chosen the state of Indiana for a cutting-edge facility in the United States, the Financial Times reported on Thursday.

SK Hynix is considering a possible investment in the U.S. but hasn't made a final decision yet, the company said in a statement to Reuters.

The company's new packaging plant in Indiana will specialize in stacking standard dynamic random access memory chips to create high-bandwidth memory (HBM) chips, before integrating them with Nvidia's?graphic processing units (GPUs), the report said, citing sources.