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TrendForce forecasts a continued slump in the NAND Flash market in 2025, driven by weak demand and oversupply, leading to price declines. To stabilize the market, Micron has initiated production cuts, with other suppliers expected to follow. Suppliers will reduce capacity utilization and delay process upgrades. While these cuts may stabilize prices short-term, long-term market consolidation will accelerate. Suppliers need to focus on innovation and explore new markets, while competition from Chinese suppliers will intensify.
TrendForce indicates that the US export control updates on January 16th extend KYC review standards to packaging technologies and expand controls to logic ICs at 16/14nm and below, 3D NAND with 128+ layers, and specific DRAM specifications. New measures require stricter due diligence from foundries and OSATs and establish ""Approved IC Designers"" and ""Approved Manufacturing and OSAT Companies"" lists. While non-AI chip production may continue, these measures will increase difficulties for Chinese customers and could impact TSMC's revenue by 1-3%.
TrendForce indicates that NVIDIA will increase shipments of Blackwell GPUs featuring CoWoS-L in 2025, while US trade restrictions may reduce demand for CoWoS-S. NVIDIA's adjusted CoWoS order allocation strategy will shift 60% of demand from CoWoS-S to CoWoS-L, despite tight CoWoS-L capacity. Potential delays in GB Rack shipments and US export controls on AI chips could lead to NVIDIA revising its CoWoS demand downward.
TrendForce indicates that foundry capacity utilization in 1Q25 is exceeding expectations due to geopolitical risks and Chinese subsidies. Despite weak end-market demand for consumer electronics, the supply chain is stockpiling to mitigate potential tariffs and capitalize on Chinese subsidies, leading to increased utilization rates for mature nodes at Tier-2 foundries. This early stockpiling, however, may reduce future demand, potentially slowing capacity utilization growth in 2H25.
TrendForce forecasts that CoWoS capacity will double in 2025, driven by demand for Blackwell and CSPs' ASICs. TSMC, the major supplier, will expand capacity to meet the demand, with NVIDIA's Blackwell platform accounting for the largest share and CoWoS-L exceeding 50%. AWS's in-house ASIC demand will also significantly increase. While TSMC's capacity expansion may face challenges, overall market demand for CoWoS remains robust.
Content:
1. 2023-2028F Global AI Server Market Supply and Demand Analysis
2. 2023-2028F Forecast for Global AI Server Market
3. Future Trends and Outlook for Key AI Server Supply Chain Development
4. Key Takeaways
TrendForce indicates that heightened geopolitical tensions are driving IDMs to seize ""China for China"" opportunities through collaborations with Chinese foundries. Driven by localization and cost-cutting demands in China's automotive market, European and Japanese IDMs like STMicroelectronics, Infineon, NXP, and Renesas are actively partnering with Chinese foundries such as SMIC and HHGrace to develop automotive MCUs and other products. This collaboration will help Chinese foundries enhance their technology platforms and achieve a more autonomous supply chain. These partnerships are expected to contribute to wafer output and revenue starting in 2H25 at the earliest.
TrendForce believes that US tariffs on Mexico will have a limited impact on Taiwanese server ODMs. While these ODMs have assembly plants along the US-Mexico border, they have been actively establishing SMT production lines in Southeast Asia since 2022 to address US-China trade tensions. Companies like Wistron, Inventec, and Foxconn have plants in Vietnam, Thailand, and other locations, allowing them to circumvent tariffs by shifting production. Therefore, the US tariffs on Mexico are not expected to significantly impact these ODMs.
TrendForce indicates that shipments of NVIDIA's GB200 rack solution may be delayed to 2Q25-3Q25 due to supply chain adjustments and optimizations. As NVIDIA's first AI server rack solution, the GB200 targets hyperscale CSPs, and its complex specifications pose challenges for the supply chain, particularly in high-speed interconnect design and thermal management. Volume shipments of the GB200 will drive growth for Grace CPUs and Blackwell GPUs, as well as the liquid cooling solutions market.
TrendForce indicates that the US Department of Commerce announced new export controls on December 2nd, further restricting China's access to advanced semiconductor technologies. The new measures tighten controls on advanced equipment, expand the Entity List, and adjust FDP rules, impacting the expansion of both advanced and mature node capacity for Chinese wafer fabs. Additionally, these measures will make it more challenging for Chinese equipment manufacturers to obtain critical foreign components.