Weekly Industry Highlights (Weekly 8 for 2025)
Market: AI Chips, NAND Flash, Automotive Chips
01. Data Center Spending May Drive AI Chip Prices Up
This week, major cloud computing companies like Amazon, Alphabet, Microsoft, and Meta reaffirmed their plans to increase data center spending, boosting the AI chip market. Amazon plans to spend about $100 billion on capital expenditures this year, up 29% from last year; Alphabet plans to invest $75 billion in 2024, a 43% increase; Microsoft will invest $80 billion this fiscal year to build AI data centers; and Meta plans to spend up to $65 billion on capital expenditures in 2025.
02. NAND Flash Demand Growth and Supply Tightness
On the 12th, CFM Flash Market Watch reported that recent inquiries for 1Tb QLC NAND Flash have increased, with original manufacturers controlling supply to stabilize profits, leading to tight supply. Market acceptance of higher-performance QLC NAND Flash Wafer prices is rising. Amid production cuts by multiple original manufacturers, the supply of low-cost resources is tight, which may slow down competitive shipping, reduce the supply of low-cost products, and push prices upward.
03. Automotive Chip Overcapacity in the Short Term, Optimistic Long-Term Outlook
According to EET’s report this Wednesday, the high-end chip market is expected to grow by 2030, driven by the adoption of technologies such as ADAS and intelligent cockpits. However, in the short term, overcapacity remains the main challenge for the industry. During the pandemic, the automotive chip shortage led to increased production and stockpiling in the supply chain, changing the supply-demand dynamics and causing overcapacity. Recently, NXP disclosed a 6% year-on-year drop in automotive chip consumption, while companies like Texas Instruments and ON Semiconductor have also experienced worsened performance due to declining demand. Mobileye stated that by the fourth quarter of 2024, there would be an excess of 6 to 7 million automotive chip units in inventory, with Q1 2024 revenues expected to decrease by about 50% year-on-year.
Industry consultancy firm Sigmaintell believes the automotive chip market is currently in a destocking phase, and inventory will return to a healthy level by the end of Q1 or early Q2 2025. In the long term, as the automotive industry shifts toward electrification and intelligence, the demand for high-performance chips will continue to grow, especially with the increased dependency of autonomous driving systems and electric vehicle power management systems on chips.
Original Manufacturer Updates: SK Hynix, Micron, Sensors
04. ams OSRAM Warns of Weak Q1 Automotive Chip Demand
On February 11th, Reuters reported that Austrian sensor giant ams OSRAM issued a profit warning on Tuesday, stating that due to the continued weak demand for automotive semiconductors, the company expects its Q1 2025 revenue to be flat or slightly lower than the same period last year.
The company’s financial statement mentioned that the uncertainty in the automotive supply chain and ongoing inventory adjustments are impacting Q1 performance, but signs of bottoming out are appearing in the industrial and medical markets. Market observers noted that as the global automotive industry shifts toward electrification and intelligence, the demand for sensors is expected to remain positive in the long term.
05. Micron NAND Flash Prices May Rise
According to media reports, Micron's CFO Mark Murphy recently stated that due to a high proportion of consumer-grade DRAM and underutilized NAND Flash production capacity, the company expects a decline in gross margins for Q3 FY2025 (March-May), down several percentage points from 37.5%-39.5% in Q2 FY2025 (December 2024 - February 2025). However, Murphy also noted that after Q3, gross margins are expected to improve, mainly due to improvements in smartphone inventory, growing demand from data centers, and reduced NAND Flash supply leading to higher prices.
06. SK Hynix’s North American Revenue More Than Doubles in 2024, Limited Impact from Tariff Increases
According to reports from South Korean media AJU News and ET News on February 13th, SK Hynix’s cumulative revenue from North America in the first three quarters of 2024 reached 27.3 trillion Korean Won, more than double the revenue in the same period in 2023, with the North American market’s share rising from 45.4% to 58.8%. This growth is mainly attributed to the supply of advanced HBM3E chips to tech giants like NVIDIA.
However, U.S. President Trump has stated that discussions are underway regarding tariffs on imported semiconductors, with the rate potentially ranging from 10% to 25%. The Korea Institute for Industrial Economics and Trade (KIET) predicts that if the U.S. imposes semiconductor tariffs, South Korea’s semiconductor exports could decline by 4.7% to 8.3%. However, analysts in the securities industry believe that South Korean companies dominate the memory market, and tariff increases will only raise procurement costs for U.S. tech companies, lowering their revenue. Therefore, the likelihood of the U.S. formally announcing semiconductor tariffs is limited.
Industry Information: AI Servers, Inventec, Foundries
07. TrendForce: AI Server Shipments in 2025 Face Uncertainty
TrendForce reported on the 12th that global AI server shipments are expected to grow by 46% year-on-year in 2024 due to strong demand from CSPs and OEMs. However, shipments in 2025 face uncertainties, including the U.S. chip ban, DeepSeek effects, and supply chain delays for GB200/GB300 Racks. TrendForce presented three possible scenarios:
08. Inventec Wins Apple Orders with Three Key Advantages
According to a report from the Economic Daily on the 13th, Inventec has stood out in the Chinese server OEM market, successfully entering the AI server supply chain of major cloud giants like Baidu, Alibaba, Tencent, and ByteDance. Its success is attributed to three main advantages: long-term focus on the mainland market, established strong relationships with local major manufacturers, highly customized services, and local key production lines.
Unlike other OEM companies that initially focused on U.S.-based cloud customers, Inventec has emphasized the mainland market from the beginning, laying the groundwork for success over the past decade. Industry insiders believe that regardless of which Chinese tech giant Apple eventually collaborates with to advance its AI projects, Inventec is likely to benefit from its customer resources.
09. Reports Indicate U.S. Pushing Intel and TSMC to Form Joint Semiconductor Foundry
On February 13th, Baird analyst Tristan Gerra revealed that Intel is exploring the possibility of splitting its semiconductor manufacturing division and forming a joint venture with TSMC. The U.S. government is reportedly spearheading this deal, with TSMC engineers potentially stationed at Intel’s wafer fabs to help produce advanced 3nm and 2nm chips in the U.S., ensuring the success of future manufacturing projects.
Gerra also revealed that Intel plans to split its semiconductor manufacturing unit and form a new joint venture with TSMC, where TSMC will manage and operate the wafer fabs and could receive federal subsidies under the U.S. CHIPS Act. Analysts are weighing the pros and cons of this partnership, considering its potential benefits and challenges. Over the past 12 months, Intel has accumulated a loss of $18.8 billion and is expected to return to GAAP profitability by 2026.