In the spot market, DRAM prices are showing a slight divergence from the contract market. Spot demand has decreased, preventing further price increases for DRAM chips. Meanwhile, NAND Flash prices have been rising due to ongoing wafer shortage. However, spot quotations for NAND Flash packaged dies remain stable due to uncertain demand visibility.

DRAM Spot Market

The price trend of the spot market diverges slightly from that of the contract market. Recently, demand has dropped in the spot market. Even though DRAM suppliers and module houses have been passive in offering price concessions, there also has been no noticeable increase in demand. Furthermore, there is growing sentiment in the spot market that waiting for further developments is the best option. Hence, spot prices of DRAM chips have not been able to rise further. As for modules, their spot prices have experienced limited fluctuations because Kingston, as the leading module house, is unwilling to raise quotes due to its high inventory level. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 1.69% from US$1.600 last week to US$1.627 this week.

NAND Flash Spot Market

The spot market, due to continuous shortages in recent wafer supply, has been experiencing rising prices under a shrinking volume, while spot quotations for NAND Flash packaged dies have been oscillating narrowly in quotations on account of the persistently constrained level of visibility in demand. Follow ups on market prices can still be seen among products involved in production cuts of suppliers, whereas other products are fluctuating according to market demand. 512Gb TLC wafer spots have risen by 6.94% this week, arriving at US$2.464.

In a subdued environment for consumer electronic applications in the storage market, High Bandwidth Memory (HBM) technology is emerging as a new driving force, gaining significant attention from major players. Recent reports reveal that both Samsung and Micron are gearing up for substantial HBM production expansion.

Major Manufacturers Actively Investing in HBM

Recent reports indicate that Samsung has acquired certain buildings and equipment within the Cheonan facility of Samsung Display in South Korea to expand its HBM production capacity.

It is reported that Samsung plans to establish a new packaging line at the Cheonan facility for large-scale HBM production. The company has already spent 10.5 billion Korean won on the acquisition of the mentioned buildings and equipment, with an additional investment expected to range between 700 billion and 1 trillion Korean won.

Earlier, it was disclosed by Mr. Hwang Sang-jun, the Vice President of Samsung Electronics and Head of the DRAM Product and Technology Team, that Samsung has developed HBM3E with a speed of 9.8Gbps and plans to commence providing samples to customers.

Concurrently, Samsung is in the process of developing HBM4 with the objective of making it available by 2025. It is reported that Samsung Electronics is actively working on various technologies for HBM4, including non-conductive adhesive film (NCF) assembly techniques optimized for high-temperature thermal characteristics and hybrid bonding (HCB).

On November 6th, Micron Technology opened a new facility in Taichung. Micron has stated that this new facility will integrate advanced testing and packaging functions and will be dedicated to the mass production of HBM3E, along with other products. This expansion aims to meet the increasing demand across various applications such as artificial intelligence, data centers, edge computing, and cloud services.

Previously, Micron’s CEO, Sanjay Mehrotra, revealed that the company plans to commence substantial shipments of HBM3E in early 2024. Micron’s HBM3E technology is currently undergoing certification by NVIDIA. The initial HBM3E offerings will feature an 8-Hi stack design with a capacity of 24GB and a bandwidth exceeding 1.2TB/s.

Furthermore, Micron intends to introduce larger-capacity 36GB 12-Hi stacks HBM3E in 2024. In an earlier statement, Micron had anticipated that the new HBM technology would contribute “hundreds of millions” of dollars in revenue by 2024.

Shift Toward HBM3 Expected in 2024

According to TrendForce, the current mainstream technology in the HBM market is HBM2e. This specification is utilized by prominent players like NVIDIA with their A100 and A800, AMD with the MI200 series, and various custom system-on-chip designs by CSPs.

Simultaneously, in response to the evolving demand for AI accelerator chips, many manufacturers are planning to introduce new products based on HBM3e technology in 2024. It is anticipated that both HBM3 and HBM3e will become the dominant technologies in the market next year, catering to the requirements of AI accelerator chips.

Following China’s Big Fund’s substantial $14.56 billion RMB investment in Changxin Xinqiao Storage Technology, a memory chip manufacturer, at the end of October, there are now reports of an additional $39 billion RMB injection.

China is actively building a domestic semiconductor supply chain, and according to Nikkei Asia, Changxin Xinqiao is set to utilize this funding to expedite the construction of its facility in Hefei, Anhui province, with the aim of achieving mass production within a span of three years.

Hefei is also the location of a production facility for ChangXin Memory Technologies (CXMT), a major semiconductor manufacturer specializing in DRAM production. Changxin Xinqiao shares some shareholders and its general manager with CXMT, according to Tianyancha.

Chinese media points out that Changxin Xinqiao has ambitious plans to produce DRAM chips in Hefei, destined for use in computers and a wide array of electronic devices. At present, Changxin Xinqiao has initiated the tendering process for new facility equipment and is poised to accelerate procurement and related procedures using the recently acquired funding.

With support from the Hefei City government, Changxin Xinqiao initiated the DRAM factory construction project in 2019 and laid out a policy to make use of domestically manufactured semiconductor production equipment.

(Image: CXMT)

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The research institution TrendForce held its AnnualForecast 2024 Seminar on November 3, where they delved into discussions about global wafer foundry trends, the applications of AI, the dynamics of AI servers, and the demand for High Bandwidth Memory (HBM).

Joanne Chiao, analyst from TrendForce, observed that while AI servers have experienced robust growth over the past two years, AI chips account for just 4% of wafer consumption, limiting their impact on the overall wafer industry. Nevertheless, both advanced and mature processes offer business opportunities. The former benefits from the desire of companies like CSPs to develop customized chips, leading them to seek the assistance of design service providers; while the latter can consider venturing into sector such as power management ICs and I/O solutions.

Persisting US export restrictions continue to affect China’s foundries, causing delays in their expansion plans. Furthermore, the regionalisation of wafer foundry services is exacerbating issues related to uneven resource distribution.

Due to lackluster end-market demand and fierce market competition, the capacity utilization rate of 8-inch wafer foundries continue to decline until the first quarter of the upcoming year. Inventory adjustments are underway in the fields of industrial control and automotive electronics. Chinese foundries are more willing to offer competitive prices, and outperforming their counterparts in Taiwan and Korea in terms of order performance.

In the realm of 12-inch wafer foundry services, success relies on technological leadership and exclusivity. Competition isn’t as intense as it is with 8-inch wafers. This resurgence is driven by inventory replenishment, the demand for iPhone 15, select Android smartphone brands, and the need for AI chips. A moderate recovery is expected in the latter part of this year.

TrendForce indicates that, with the expansion of processes beyond 28nm, mature process capacity is expected to occupy less than 70% of the capacity of the top ten foundries by 2027. Under the pressure to transition towards mature processes, China is anticipated to account for 33% of mature process capacity by 2027, with the possibility of further increases.

It’s noteworthy that Japan is actively promoting the revival of its semiconductor industry and, through incentives for foreign companies establishing fabs, may secure 3% of advanced process capacity.

TrendForce’s analyst, Frank Kung, predicts that the shipment of Nvidia’s high-end GPU processors will exceed 1.5 million units this year, with a YoY growth rate of over 70%, expected to reach 90% by 2024. Starting from the latter half of this year, Nvidia’s high-end GPU market will transition primarily to H100. As for AMD, its high-end AI solutions are mainly targeted at CSPs and supercomputers. The AI server market, equipped with MI300, is expected to experience significant expansion in the latter half of this year.

In the 2023-2024 period, major CSPs are poised to become the primary drivers of AI server demand, with Microsoft, Google, and AWS ranking among the top three. Additionally, the robust demand for cloud-based AI training is expected to propel the growth of advanced AI chips, which may, in turn, stimulate growth in power management or high-speed transmission-related ICs in the future.

Lastly, concerning HBM, TrendForce’s senior research vice president, Avril Wu, mentioned that as Nvidia’s H100 gradually gains momentum, HBM3 is set to become the industry standard in the latter half of this year. With the launch of B100 next year, HBM3e is poised to replace HBM3 as the mainstream memory in the latter half of the following year. Overall, HBM plays a pivotal role in DRAM revenue, with expectations of an increase from 9% in 2023 to 18% in 2024, potentially leading to higher DRAM prices in the coming year.
(Image: TechNews)

DRAM Spot Market
Major module houses are still holding a fairly high level of inventory, so they are less adhered to the consensus that prices will go up. Currently, their main strategy in the spot market is to have their quotes closely aligned with the quotes in the contract market. Therefore, spot prices are not expected to change significantly before contract prices rise further in November. Even though the overall volume of spot trading remains low, the average prices of items are not fluctuating noticeably. For the mainstream chips (i.e., DDR4 1Gx8 2666MT/s), their average spot rose by 1.46% from US$1.577 last week to US$1.600 this week.

NAND Flash Spot Market

Spot transactions have been ramping up since September under the active inclination of price follow-ups among buyers, though spot prices have slightly mitigated in growth over the past two weeks after arriving at US$2, where some products are seeing a diminishing level of transactions due to the high markup. The continuity of price hikes will require further observations. 512Gb TLC wafer spots have risen by 12.72% this week, arriving at US$2.304.