NAND Flash suppliers’ Clients in the data center segment were gradually stepping up enterprise SSD procurement after finishing inventory adjustments, according to TrendForce’s latest investigations. Moreover, the adoption rate of 4/8TB products in the enterprise SSD market increased substantially on account of the releases and adoption of the new server processor platforms from Intel and AMD. Although the recent wave of COVID-19 outbreaks that struck Southeast Asia weakened smartphone sales in 2Q21, the quarterly total NAND Flash bit shipments rose by nearly 9% QoQ, as PC OEMs still had plenty of component orders in 2Q21 due to the fairly robust notebook demand during the period. On the other hand, the shortage of controller ICs became more severe during the period, and the winter storm that battered Texas this February affected the operation of Samsung’s foundry fab Line S2 in Austin. As demand for NAND Flash products rose, the overall ASP also rose by nearly 7% QoQ, and the quarterly total NAND Flash revenue rose by 10.8% QoQ to US$16.4 billion in 2Q21.

Moving into 3Q21, clients in the data center segment will gradually become the main growth driver as they expand procurement of high-density enterprise SSDs. Furthermore, notebook demand is expected to remain at a fairly high level in 3Q21, thereby sustaining NAND Flash demand bit growth and the ongoing rise in contract prices of NAND Flash products. Hence, TrendForce currently forecasts that the quarterly total NAND Flash revenue will not only again register a QoQ increase but also hit a record high for 3Q21.

Samsung

For 2Q21, Samsung’s bit shipments grew by around 8% QoQ thanks to the strong demand from PC OEMs and hyperscalers aggressively building up their enterprise SSD inventories. The energetic stock-up activities and the shortage of controller ICs also caused Samsung’s ASP to rise by about 5% QoQ. As a result, Samsung’s NAND Flash revenue went up by 12.5% QoQ to US$5.59 billion in 2Q21.

SK hynix

Smartphone storage solutions account for the largest portion of SK hynix’s sales mix. Nevertheless, SK hynix’s sales performance during 2Q21 still benefitted from hyperscalers’ rising demand and the brisk flow of orders related to notebooks. Hence, SK hynix grew its bit shipments by 3% QoQ. Its ASP also rose by about 8% QoQ because of the general tightening of NAND Flash supply and the shortage of controller ICs. All in all, SK hynix’s NAND Flash revenue went up by 10.8% QoQ to US$2.025 billion for 2Q21.

Kioxia

Kioxia benefitted from strong notebook demand and resurging procurement activities from its enterprise clients in 2Q21. In addition, Kioxia’s major clients in the smartphone segment once again kicked off their NAND Flash procurement during the quarter. As a result, Kioxia’s bit shipment grew by about 7% QoQ in 2Q21, while its ASP entered an upward trajectory for the first time in four quarters with a QoQ growth of more than 10%. However, in light of the trailing performance of its SSSTC subsidiary (formerly Liteon’s SSD business) as well as the impact of unfavorable exchange rates, Kioxia’s revenue for 2Q21, when converted into USD, reached a mere US$3.011 billion, an 8.5% QoQ increase.

Western Digital (WDC)

Western Digital put up a remarkable revenue performance for 2Q21 thanks to robust demand from the notebook segment, an upswing in enterprise SSD demand, and the shipment of its second-gen NVMe enterprise SSD, which resulted in a 39% QoQ increase in Western Digital’s enterprise SSD revenue. On the other hand, while products related to Chia cryptocurrency mining gained significant media spotlight at the end of April, they made limited contributions to Western Digital’s quarterly bit shipment, which underwent a mere 4% QoQ increase in 2Q21, though its ASP increased by 7% QoQ. All in all, Western Digital’s NAND Flash revenue reached US$2.419 billion, an 11.2% QoQ increase, in 2Q21.

Micron

Owing to strong demand from the data center and notebook segments, Micron grew its quarterly bit shipment by nearly 7% in 2Q21. In particular, Micron’s QLC client SSDs enjoyed a growing penetration rate in the PC segment. With the shortage in the SSD market leading to a 3% QoQ increase in Micron’s ASP for 2Q21, its NAND Flash revenue reached US$1.812 billion, a 9.8% QoQ increase.

Intel

Intel’s quarterly bit shipment for 2Q21 underwent a near 10% QoQ decline in spite of strong enterprise SSD demand from the data center segment. This decline can primarily be attributed to the shortage of such key components as controller ICs and PMICs. Compared to other major NAND Flash suppliers, Intel mainly procures some of these components from a single source, thereby exacerbating the impact of the component shortage on its operations, including the shipment of enterprise SSDs. Nevertheless, its ASP still grew by about 9% QoQ on the back of persistently strong demand from clients. Intel’s quarterly revenue from its NAND Flash business reached US$1.098 billion, a 0.8% QoQ decline, in 2Q21.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

The analog IC industry is one with a long history of development and product adoption across various applications. Annual analog IC revenue reached US$53.9 billion in 2020. As the spread of the COVID-19 pandemic is gradually brought under control in China and the US this year, their domestic demand for telecom, automotive, industrial, and consumer electronics products has also kept growing, in turn generating strong demand for analog ICs. TrendForce therefore expects IC revenue for 2021 to reach US67.9 billion, a 22.1% YoY increase.

More specifically, analog IC demand from the automotive market is expected to undergo remarkable growth this year, primarily due to the recovery of the global automotive market and the continued trend towards automotive electrification as commercial opportunities from ADAS, EV, and automotive electronics enter a period of rapid growth. In response to demand from automakers and the auto market, various major IDMs have been placing a heavy emphasis on automotive analog IC development. Led by Infineon, NXP, Renesas, TI, and STM, the automotive IC market is expected to experience a 24.6% growth in 2021.

What is an analog IC?

The analog IC is an indispensable component in electronic devices. These chips can be divided into two categories according to their functions: general purpose analog IC and application specific analog IC. The former category encompasses amplifiers/comparators (signal conditioning), signal conversion, interface, and power management (general purpose). In sum, general purpose analog ICs are characterized by their low costs, single purpose, and universal compatibility.

Application specific analog ICs, on the other hand, encompass such use cases as consumer, computer, communications, automotive, and industrial/others. This product category refers to analog ICs that are designed and manufactured in accordance with electrical systems specified by the client. Compared to digital ICs, analog ICs are much more diverse in terms of product type, less costly, and more stable, while also having longer lifecycles.

The current state of the top three analog IC manufacturers

Almost all major analog IC suppliers are IDMs with long histories. In particular, longtime market leader Texas Instruments once against took pole position in the ranking of analog IC suppliers by revenue last year. With a range of analog ICs that includes more than 80,000 products, Texas Instruments possessed a 19% market share. The company is expected to maintain its dominance in 2021 thanks to its diverse product lines, high market acceptance, and high volume of client orders.

Infineon, which took second place on the ranking, registered a 19% YoY revenue growth on the back of its expansion into automotive and power management markets. Third-ranked STMicroelectronics benefitted from rising sales of its analog, MEMS, and sensor product portfolios. TrendForce expects Infineon and STMicroelectronics to continue their upward trajectories throughout 2021.

Whereas China is the largest market for analog ICs, the analog IC industry will see the highest growth in the US

China is expected to account for 42% of analog IC sales, the highest among all regions in 2021, with the consumer electronics segment comprising most of these transactions. However, the US is expected to undergo the highest growth in terms of analog IC sales with a US$10.6 billion revenue in 2021, a 25% YoY growth. This performance can mostly be attributed to the fact that the US economy has been recovering in the post-pandemic era owing to increasing purchases in the consumer electronics, telecom, and automotive markets.

Furthermore, the US government has been pushing for infrastructure developments with a focus on transportation, networking, and electricity generation, leading to expanded procurement of analog ICs used in these applications. As the markets welcomes the arrival of the traditional peak season for analog IC procurement in 2H21, growth in the US market will likely persist as well.

（Cover image source: Pixabay）

After DRAM prices made a rebound into an upward trajectory in 1Q21, buyers expanded their DRAM procurement activities in 2Q21 as they anticipated a further price hike and insufficient supply going forward, according to TrendForce’s latest investigations. Not only was demand robust from clients in the notebook segment, which benefitted from ongoing WFH and distance learning applications, but CSPs also sought to gradually replenish their DRAM inventories. Furthermore, demand for products that are relatively niche, including graphics DRAM and consumer DRAM, remained strong. Hence, DRAM suppliers experienced better-than-expected QoQ increases in their DRAM shipment for 2Q21. At the same time, DRAM quotes grew by a greater magnitude compared to the first quarter as well. With both shipment and quotes undergoing growths in tandem, DRAM suppliers registered remarkable growths in their revenues in 2Q21. Total DRAM revenue for 2Q21 reached US$24.1 billion, a 26% QoQ increase.

However, heading into 3Q21, the issue of mismatched component availability began surfacing in the upstream supply chain and bottlenecking the assembly of electronic devices. Some OEMs/ODMs (especially notebook manufacturers) have therefore scaled down their DRAM procurement due to their relatively high level of DRAM inventory in comparison with other components. As a result, although most DRAM suppliers remain bullish on the market’s future, the growth in demand from certain product segments is likely to slow down, since DRAM buyers still carry ample inventory. In light of suppliers’ insistence on raising quotes, TrendForce expects the overall ASP of DRAM products for 3Q21 to undergo a QoQ increase, albeit at a narrower 3-8% now compared to 2Q21.

DRAM suppliers significantly improved their earnings performances in 2Q21 due to massive price hikes and increased shipment of products manufactured with advanced process technologies

The three dominant suppliers (Samsung, SK hynix, and Micron) of DRAM products put up similar revenue performances for 2Q21 as they saw an increase in both ASP and shipment, with the latter surpassing the suppliers’ expectations. On the demand side, buyers showed an increased willingness to expand DRAM procurement because they anticipated that prices will rise even further. In addition, frequent shortages of various semiconductor components this year drove buyers to stock up on DRAM ahead of time so as to avoid potential manufacturing bottlenecks due to low DRAM inventory. Hence, each of the three suppliers increased its revenue by more than 20% QoQ in 2Q21. Samsung in particular registered the most remarkable growth, at a 30.2% QoQ increase. For 3Q21, these suppliers will not only continue to hike up quotes, but also increase their quarterly shipments by a similar magnitude. TrendForce thus expects their market shares to remain relatively unchanged from the previous quarter.

DRAM suppliers likewise experienced considerable growths in terms of profitability for 2Q21 thanks to the massive increase in DRAM quotes, along with the fact that DRAM products manufactured with advanced process technologies occupied a growing share of the suppliers’ DRAM bit shipment. For instance, while Samsung kicked off mass production with the 1Znm process in 1Q21 at a relatively low yield rate (since the technology was still in its infancy at the time), the company was able to considerably ramp up production in 2Q21, thereby raising its operating profit margin from 34% in 1Q21 to a staggering 46% in 2Q21. SK hynix similarly raised its operating profit margin to 38% in 2Q21 by improving the yield rate of its advanced process technology. Micron, on the other hand, increased its DRAM quotes by a similar magnitude compared to its Korean competitors in 2Q21 (Micron counts the March-May period as its fiscal quarter) and saw a jump in its operating profit margin from 26% in 1Q21 to 37% in 2Q21. Assuming that prices and shipment continue their upward trajectory in 3Q21, TrendForce is bullish on DRAM suppliers’ profitability for the quarter as well and expects market leader Samsung to reach 50% in operating profit margin for the first time in nearly three years.

Taiwanese suppliers delivered similar revenue growths to the three dominant suppliers’ in 2Q21 thanks to persistent market demand for specialty DRAM

Taiwanese DRAM suppliers posted a massive increase in their revenues for 2Q21 owing to persistently high specialty DRAM quotes and high demand from clients. More specifically, Nanya Tech’s revenue grew by about 28% QoQ for 2Q21, and its operating profit margin increased from 17.1% in 1Q21 to 31.2% in 2Q21. These growths can primarily be attributed to a 30% increase in the company’s specialty DRAM quotes, and Nanya Tech has expressed that it expects further earnings growth in 3Q21. Winbond, on the other hand, saw strong demand from its clients and raised its DRAM quotes by a greater magnitude than its NAND Flash quotes. Winbond’s revenue from its DRAM business not only rose by 39% QoQ in 2Q21, but also accounted for an increasing share of its total revenue, at 46%.

It should be pointed out that the two aforementioned Taiwanese suppliers are still currently facing the issue of insufficient production capacities, and their existing fabs do not have the physical space to house additional manufacturing equipment. Hence, before these suppliers finish constructing new fabs, they must rely on raising quotes in order to grow their DRAM businesses in the short run. Nanya Tech’s new fab that is currently under construction will not be able to contribute to the company’s production capacity until construction concludes in 2024. In the short run, Nanya is able to marginally increase its bit output only through migrating to advanced process technologies at the 1A/1Bnm nodes. Similarly, Winbond will not be able to resolve its issue of insufficient production capacity until its fab located in Luzhu, Kaohsiung, kicks off mass production in 2H22. As for PSMC, its revenue from sales of PC DRAM products manufactured in-house increased by about 7% QoQ in 2Q21. However, PSMC’s total revenue from both sales of in-house DRAM and its DRAM foundry business increased by 19% QoQ in 2Q21. Much like its Taiwanese competitors, PSMC must carefully allocate its limited production capacity between logic IC products and memory products.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

The traditional method of extending electronic devices’ battery life via reducing power consumption and increasing battery capacity has now reached its limits. In response, the fast charging industry is now looking to adopt fast chargers equipped with GaN chips as the latest mainstream solution that can further improve device battery life, with the demand for GaN chips recently seeing a progressive rise as well. At the 2021 Global Third Generation Semiconductor Fast Charging Industry Summit, major Chinese GaN solution supplier Innoscience announced the release of four GaN chips used in fast chargers: INN650D150A, INN650DA150A, INN650D260A, and INN650DA260A. All four chips have a maximum voltage of 650V, while their package dimensions mainly range from DFN 8×8 to DFN 5×6.

Established in 2015, Innoscience specializes in GaN chip design and manufacturing. The company’s GaN on Si process technology makes it one of the leading third-generation semiconductor IDMs in China. As geopolitical tensions escalate between China and the US, accelerating the development of domestic semiconductor supply chains has now become one of the top priorities for China. More specifically, due to the heavy usage of third-generation semiconductors such as SiC and GaN across the telecom, energy, and EV industries, the Chinese government has been aggressively fostering the growth of companies specializing in these semiconductors, with Innoscience becoming one of the leading suppliers chosen by the government.

GaN fast chargers released by Chinese brands at the moment, such as the Meizu GN01 and ROCK RH-PD65W, all feature GaN chips manufactured by Innoscience. Given China’s continued push for domestically manufactured semiconductor substitutes, Innoscience is expected to seize considerable shares in the rapidly growing GaN fast charging market in China.

Navitas and Power Integrations possess the greatest competitive advantages in the global GaN fast charging chip market

Founded in Ireland, IC design company Navitas has seen its GaN chips widely adopted in GaN fast chargers in recent years. For instance, Xiaomi’s 65W GaN charger contains Navitas’ NV6115 and NV6117 GaN chips, while Lenovo’s Thinkplus 65W charger also contains Navitas’ NV6125 GaN chips. At the moment, Navitas solutions are used by major brands including Xiaomi, OPPO, Lenovo, ASUS-Adol, and Dell, as well as by peripheral manufacturers including Anker and Baseus. TrendForce estimates that Navitas GaN chips reached a 50-60% share in the GaN charger market in 2020, making Navitas the largest supplier of GaN charger chips in the world.

Power Integrations, a US-based IDM, specializes in power semiconductor devices and possesses relatively mature GaN chip integration technologies. Power Integrations manufactures products with relatively smaller PCBA dimensions due to their reduced number of discrete components. By adopting Power Integrations’ GaN chips, charger manufacturers are in turn able to reduce the size of their chargers in order to deliver solutions that are more mobile and more convenient, making these chargers a perfect fit for fast charging needs of smartphones and notebook computers.

TrendForce, therefore, holds a positive outlook towards Power Integrations’ future potential. Power Integrations’ GaN chips are primarily used in peripherals manufactured by Aukey, Ugreen, IINE, and Remax, although they will likely enter the smartphone and notebook markets in the future due to Power Integration’s competitive advantage in technological integration.

（Cover image source: Unsplash）

While the server industry transitions to the latest generation of processors based on the x86 platform, the Intel Ice Lake and AMD Milan CPUs entered mass production earlier this year and were shipped to certain customers, such as North American CSPs and telecommunication companies, at a low volume in 1Q21, according to TrendForce’s latest investigations.

These processors are expected to begin seeing widespread adoption in the server market in 3Q21. TrendForce believes that Ice Lake represents a step-up in computing performance from the previous generation due to its higher scalability and support for more memory channels. On the other hand, the new normal that emerged in the post-pandemic era is expected to drive clients in the server sector to partially migrate to the Ice Lake platform, whose share in the server market is expected to surpass 30% in 4Q21.

Volume ramp of CPUs based on the Eagle Stream platform will likely take place in 2Q22, while AMD is expected to reach a 15% share in the server market next year

Regarding the mass production schedule of Intel CPUs based on the next-gen Eagle Stream platform, volume ramp is expected to occur in 2Q22. These processors, which feature embedded HBM, comprise a much more diverse product lineup compared to the previous generation. Although Intel’s 2Q22 target represents a slight delay from the market’s previous expectation of a 4Q21 ramp-up, Eagle Stream CPUs will enter the final product qualification stage at the end of 4Q21, after which Intel will begin provisioning certain leading customers with a small batch of these CPUs in 1Q22, according to TrendForce’s survey of server ODMs. As such, the mass production schedule of Sapphire Rapids will likely resemble the release of Ice Lake server processors earlier this year.

Genoa CPUs, AMD’s competitive equivalent of the Intel Eagle Stream, are expected to enter mass production on a similar schedule, since AMD’s wafer starts at the 5nm node have been relatively low-volume. AMD’s server processors manufactured at the 14nm node and below have the competitive advantage in terms of price-to-performance, core count, and interface support.

Furthermore, after progressing to the 7nm node, these processors have been seeing gradually increased adoption by various public cloud service providers, including Google Cloud Platform, Microsoft Azure, and Tencent, throughout 2021. AMD CPUs have currently surpassed a 10% penetration rate in these three CSPs’ servers. Going forward, AMD will begin inputting wafers at the 5nm node at the end of 2021 in order to further optimize its processors’ cost, power consumption, and performance. TrendForce therefore expects AMD CPUs to reach a 15% share in the global server market in 2022.

While the ARM architecture is starting to gain popularity, ARM chips are mostly built-to-order due to the relatively small scale of client demand

Processors based on the ARM architecture began seeing increased market penetration this year, with AWS’ self-designed Graviton chips enjoying the greatest market share. In addition, Ampere and Marvell have also been releasing more agile and flexible ARM-based server processors, validation for which by CSPs is expected to kick off in 4Q21. The server market, however, is still dominated by x86 processors, which currently account for 97% of total server processor shipments.

In particular, AMD has transitioned most of its server offerings to processors manufactured at the 7nm and 7nm+ nodes by increasing wafer inputs at these nodes and replacing its old 14nm product lineups. This transition has paid off, as some of AMD’s clients have gradually become receptive to these new products. On the other hand, ARM- and RISC-based processors are currently built to order, mostly for the data center market. TrendForce therefore believes that ARM CPUs will not be competitive with x86 CPUs in the server market before 2023.

Support will extend to include PCIe G5 and DDR5 RDIMM, while CXL will improve memory performance

It should be noted that Intel as the dominant leader in the market for x86 server CPUs has decided to have Eagle Stream support CXL (Compute Express Link). This interface further optimizes the memory coherence between the CPU and the memory components to which the CPU is connected. The processor platform thus has the ultimate function of establishing a memory pool for all computing units within the server through memory virtualization, even though this function is not notably emphasized in the initial establishment of the product specifications, which originally sought to enable high-bandwidth and low-latency data transfer for the CPU.

The memory pool, in turn, enhances the interconnections (or the data transfer efficiency) among the CPU, memory, GPU, ASIC, FPGA, etc. The new CXL interface will be able to offer significant improvements in terms of dealing with heavier workload in the future and conducting heterogeneous computing. Moreover, CXL will be able to overcome the limits imposed on the current hardware architecture with respect to data transfer and thereby enable more effective integrated computing capability.

The build-out of data centers continues to grow because of the emergence of applications related to AI and Big Data. Furthermore, the demand for larger cloud storage capacity has massively expanded as a result of enterprises’ increasingly rapid digital transformation efforts in the post-pandemic world. At the same time, with the increase in CPU core count, how to raise computing performance via memory optimization has now become an important issue. Eagle Stream can resolve this bottleneck by extending support to PCIe G5 for the SSD interface technology.

Compared with its predecessor, PCIe G5 offers twice the data transfer rate. Therefore, hyperscalers are eager to adopt SSDs based on this standard. As for DRAM, both Eagle Stream and Genoa extend support to the next-generation DDR5 server DRAM, which delivers a faster data transfer rate, making these new server CPUs superior to Ice Lake in all respects. NAND Flash and DRAM suppliers have made plans to commence mass production of PCIe G5 SSDs and DDR5 RDIMMs at the end of 2Q22 in anticipation of demand generated by the release of the Eagle Stream and Genoa platforms for these next-gen products.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

（Cover image source: Intel Newsroom）