According to TrendForce’s latest memory spot price trend report, neither the spot price of DRAM nor that of NAND flash shows much sign of a turnaround in the short term. It is also worth noting that the Chinese government has been cracking down on smuggling activities since the end of May, putting more pressure on the spot prices of reball DRAM chips. Details are as follows:

DRAM Spot Price:

The price trend of the spot market continues to deviate from that of the contract market, showing no signs of a turnaround. Apart from module houses carrying too much inventory, channel markets for consumer products also remain weak and have yet to see the effects of the impending peak season. Furthermore, the Chinese government has been cracking down on smuggling activities in the spot market since the end of May. As a result, spot prices of reball DRAM chips continue to drop. A rebound is not expected in the short term. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has fallen by 2.54% from US$1.881 last week to US$1.835 this week.

NAND Flash Spot Price:

Enervated market transactions and sufficient inventory among channels have prevented a revitalization in demand from happening, despite spot suppliers’ willingness in compromising on prices. This has led to an ongoing divergence between spot and contract prices. Market participants are now on the fence regarding whether the market would exhibit demand for inventory replenishment in 3Q24. 512Gb TLC wafer spots have dropped by 0.57% this week, arriving at US$3.309.

According to Chinese media ChinaFund, there are reports that TSMC is increasing prices for its advanced 3nm and 5nm process nodes and advanced packaging. The report also cites a Morgan Stanley Securities prediction that Hua Hong Semiconductor may raise prices by 10% in the second half of the year.

Notably, China’s wafer foundries are showing signs of reducing domestic competition. While foundry price increases are not yet confirmed, utilization rates at major foundries have significantly improved, with many operating at full capacity or even exceeding 100%.

Industry sources cited by ChinaFund believe that the sustained increase in utilization rates and full capacity at some foundries could lead to potential price hikes in the future.

TSMC was the first to signal a price hike in the wafer foundry sector. Reports indicate that the global leader in foundry will increase prices for its advanced 3nm and 5nm nodes, with a potential 5% increase for 3nm and a 10%-20% rise for advanced packaging next year.

TSMC’s 5nm node continues to receive AI semiconductor orders, maintaining high capacity utilization.

At the same time, a recent Morgan Stanley report stated that Hua Hong Semiconductor, one of China’s leading foundries, is currently operating at over 100% capacity and may raise wafer prices by 10% in the second half of this year.

In an interview with ChinaFund, United Nova Technology CEO Michael Zhao stated that the semiconductor industry’s basic pattern of change starts with memory, then digital, and finally analog ICs. “Whether it’s a downturn or recovery, this is the sequence,” he emphasized.

“We are experiencing the same trend in the power semiconductor sector. We were at full capacity in Q4 last year and saw a significant recovery in Q1 this year.”

According to tracked data cited by ChinaFund, power semiconductor manufacturers have collectively raised prices this year. Sanliansheng increased prices by 10%-20%, Bluecolor by 10%-18%, Gaoge Microchip by 10%-20%, and Jiejie Microelectronics raised prices for its Trench MOS by 5%-10%.

For the memory sector, TrendForce forecasts that Q2 DRAM contract prices will rise by 13%-18%, and NAND Flash contract prices by 15%-20%.

Huafu Securities projects that, given the gradual increase in foundry utilization rates and rising inventory levels in consumer electronics and other fields, end-market demand will clearly drive growth across the semiconductor supply chain.

ChinaFund reports that several chip companies have recently announced price increases, with some as high as 20%. For instance, Yaxin Microelectronics, Chiplink, and iCM have all issued price hike notices.

(Photo credit: SMIC)

South Korean patent management company Mimir IP, which acquired approximately 1,500 chip-related patents from SK hynix in May, has filed a complaint against Micron, accusing the US memory giant of infringing on its chip-related patents, the Korea Economic Daily reported. Sources suggested that if Mimir wins the case, the damages could amount to as much as USD 480 million.

The Korea Economic Daily learned that the lawsuit, filed on June 3, also targets four other companies that use Micron products: Tesla, Dell, HP, and Lenovo, while the patents involved are reportedly related to circuits, voltage measurement devices, and non-volatile memory devices.

The case has been filed with both the US District Court for the Eastern District of Texas and the US International Trade Commission (ITC), which marks the first instance of a Korea-based non-practicing entity (NPE) that acquired patents from domestic chipmakers filing a suit against a US semiconductor company.

Officials from the involved parties were unavailable for comment, the report said.

SK hynix, the current market leader in HBM, has been facing heated competition from Samsung and Micron, both of which have recently developed their HBM3e chips, trying to win favor from the world’s leading AI chip designer, NVIDIA. Now it seems that the battleground for industry dominance is expanding from technology competition to patent disputes.

It is worth noting that transferring patents to non-practicing entity (NPE) has become more and more popular, as it seems to be a preliminary measure for companies to prepare for legal disputes with its competitors, the report noted.

The Big Three in the memory industry have made similar moves on their patent strategy recently. According to the report, Micron transferred over 400 chip-related patents to Lodestar Licensing Group in March, 2023, followed by Samsung, which transferred 96 US chip patent rights, including the right to file patent infringement complaints, to IKT, an affiliate of Samsung Display, in June 2023.

Read more

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(Photo credit: SK hynix)

Recently, Korean SSD controller manufacturer FADU announced a partnership with Western Digital to co-develop the next-generation enterprise SSD technology called “FDP (Flexible Data Placement).”

FDP is a standard technology proposed by the Open Compute Project (OCP) and is a newly approved NVMe specification (TP4146) initiated by companies such as Samsung, Meta, and Google. It aims to reduce write amplification while simplifying the integration of the entire software ecosystem.

According to a report from WeChat account DRAMeXchange, this technology not only enhances SSD performance but also significantly extends SSD lifespan.

By markedly reducing the phenomenon of “Write Amplification,” FDP can improve SSD write performance by 2 to 3 times and optimize data placement within SSD storage space. This phenomenon, when the recorded data volume is much larger than the actual client data volume, will greatly extend SSD lifespan, making it a highly regarded technological innovation in massive data exchange environments of large-scale data centers.

• WD and FADU Pioneer the Establishment of a New Standard for Memory Efficiency

Founded in 2015, FADU is a fabless startup primarily developing advanced NAND flash technologies to meet the explosive growth of data storage needs in hyperscale, enterprise, and cloud data centers. FADU is committed to producing high-performance SSD controllers and designing chips for data centers.

FADU aims to increase its market share in the SSD controller field to 30% by 2026. FADU’s CEO, Jihyo Lee, stated at an IPO briefing in July 2023 that global data centers used 50 million SSD controllers at that time, and the demand might double to 100 million in the next 2-3 years.

As a globally renowned memory manufacturer, Western Digital achieved revenues of USD 1.71 billion in 1Q24, a 2.4% increase from the previous quarter. However, due to a limited product line, Western Digital’s revenue in the Enterprise SSD sector for the quarter was USD 133 million, only up by 18.1% QoQ.

It’s worth noting that in 2Q24, the overall consumer market not yet recovers and the outlooks for PC and smartphone market for the year are conservative. Against this backdrop, Western Digital intends to accelerate Enterprise SSD product development to expand future growth momentum.

Western Digital is also aggressively pursuing shipments of high-capacity storage products, with plans to mass-produce 162-layer QLC SSDs. To accelerate the production of PCIe 5.0 SSDs, the company is collaborating with third-party controller manufacturers, breaking its tradition of in-house IC development. This strategic move underscores Western Digital’s efforts to expand its product range and support steady growth in enterprise SSD revenue.

For this collaboration, FADU and Western Digital predict that widespread adoption of FDP technology will not only help bring down total cost of ownership (TCO) but also establish a new standard for memory efficiency.

Amidst the AI wave, the importance of high-capacity, high-performance storage products is becoming increasingly prominent. HBM is undoubtedly the most sought-after product currently, with demand outbalancing supply and market value continuously rising. Meanwhile, new memory technologies are constantly emerging, heralding the coming of an era of 3D DRAM. Besides, SCM potential is about to be unleashed, and PCIe 6.0/7.0 is poised to be launched.

Read more

• [News] Memory Giant WD out of the Red in 1Q24 Driven by the AI Wave, 2Q24 to Keep Improving

(Photo credit: WD)

Taiwanese panel company Innolux have said to be involving in collaborating with leading global memory manufacturers. According to a report from the Economic Daily News, plans are underway to repurpose its 4th Plant in Tainan (5.5-generation LCD panel plant) for AI-related semiconductor applications, specifically targeting back-end packaging.

Sources cited in the report indicate that, based on the strategies of the top three global memory manufacturers, the partner in this collaboration is likely a memory manufacturer that already has a presence in Taiwan and seeks to expand its capacity there. Innolux’s advantage lies in its advanced panel-level fan-out packaging (FOPLP), which is poised to make a substantial impact in the AI field. However, these reports have not been confirmed by Innolux or any global memory giants.

Regarding the 4th Plant developments at Tainan, Innolux stated on June 16 that, based on flexible strategic planning principles, the company continues to optimize production configurations and enhance overall operational efficiency. Some production lines and products are being adjusted to streamline and strengthen the group’s layout and development.

The surge in AI demand has driven the need for advanced chip heterogenous integration and high-end packaging technologies to meet the high-performance application requirements of AI devices. Targeting these opportunities, Innolux has reportedly repurposed its Tainan 3.5-generation and 4-generation LCD panel production lines for semiconductor-related uses, including FOPLP and X-ray sensors.

Sources cited in the report also revealed that Innolux’s transformation efforts are making progress. After closing the 5.5-generation LCD panel production at the 4th Plant last year, the company has gradually reassigned staff to other facilities. To revitalize capacity and assets, Innolux has been in close contact with leading global memory manufacturers, aiming to develop AI-related applications.

Currently, the three major global memory manufacturers are actively developing high-bandwidth memory (HBM) for AI servers. South Korea’s SK Hynix is the most proactive in collaborating with Taiwanese companies. SK Hynix has partnered with TSMC to aggressively target the AI market. As per a report from Korean media outlet The Korea Herald,  SK Group Chairman Chey Tae-won recently visited TSMC Chairman C.C. Wei to ensure continued close cooperation on the next-generation HBM.

On the other hand, Micron has established memory production in Taiwan but does not yet have HBM capacity for AI servers in the region. Meanwhile, Samsung does not have direct AI cooperation with Taiwanese companies in the memory sector.

Sources cited in the report from Economic Daily News indicate that Innolux is engaging with one of these three major international memory manufacturers, focusing on new semiconductor applications. As Innolux is advancing into the promising glass substrate packaging business through panel-level fan-out packaging, this technology is expected to be combined with memory applications for AI development. Therefore, the developments at its 4th Plant in Tainan are receiving considerable attention.

Read more

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(Photo credit: Innolux)