According to the latest panel prices released by TrendForce in late January, panel manufacturers continue to implement large-scale production cuts and maintenance plans. Additionally, the shortage of upstream materials for polarizers is affecting the panel prices. 32-inch TV panel prices have seen an increase. Meanwhile, the prices of mainstream sizes for monitor panels are expected to stabilize. Here are the details:

TV

Despite being a slow season for demand in January, panel manufacturers are actively trying to reverse the trend of TV panel price declines through extensive production cuts and maintenance plans.

Recent observations indicate that some Chinese brand customers are increasing their stockpile demand for the North American tax refund season in March-April.

On the other hand, the disruption in the supply of upstream polarizer materials due to the earthquake in Japan at the beginning of the month is also contributing to a stabilization in panel prices. Therefore, the price trend for TV panels in January is expected to see a rise in 32-inch panels, while 43-inch to 75-inch panels are expected to stabilize.

Monitor

Entering January, despite the onset of a slow season for demand, panel manufacturers are encouraging customers to stock up early due to the upcoming Chinese Lunar New Year in February.

Observations indicate that there is limited room for additional orders in the latter part of January. The shortage of upstream polarizer materials is also expected to impact some VA panels. Therefore, in terms of monitor panel prices for January, mainstream sizes such as 21.5 inches, 23.8 inches, and 27 inches are expected to stabilize, while Open Cell panels are expected to have a downward space of USD 0.1 to 0.2.

NB

After entering the first quarter of 2024, laptop panel demand has significantly weakened, as some customers increased their stockpiles at the end of the previous year. Brand customers are requesting panel manufacturers to lower prices, and panel manufacturers are adopting a relatively soft stance, resulting in downward pressure on panel prices.

Observations of laptop panel price trends in January show that 16:10 models, due to their higher unit prices, still have room for continued convergence with 16:9 models. Therefore, it is expected that the prices of 14-inch 16:10 models will decrease by USD 0.2, and 16-inch 16:10 models will decrease by USD 0.3, with a larger decline. Mainstream 16:9 IPS models are expected to decrease by USD 0.1, while 16:9 TN models are expected to remain stable.

The U.S. lawmakers is reportedly attempting to further drive the “decoupling” of the Pentagon’s supply chain from China. According to sources cited by Bloomberg, the U.S. Congress has prohibited the Pentagon from procuring batteries produced by six Chinese companies, including CATL and BYD.

Additionally, the other four battery manufacturers set to be banned are Envision Energy, EVE Energy, Gotion High-Tech, and Hithium Energy Storage Technology. Based on the report, of the top 10 battery suppliers in the world, just three are non-Chinese companies.

It is noted that this regulation is part of the “2024 National Defense Authorization Act,” passed on December 22, 2023. However, commercial purchases, such as Ford’s procurement of batteries from CATL in Michigan and Tesla’s sourcing of batteries from BYD, are temporarily exempt from these measures.

As per IJIWEI’s report, the U.S. government has long been eyeing the Chinese new energy vehicle supply chain. Previously, U.S. Treasury Secretary Janet Yellen argued that China’s new energy vehicle industry posed a threat to the “national security” of the United States.

At the end of 2023, a document was signed, stipulating that from 2024 onwards, all electric vehicles produced in the U.S. are prohibited from using Chinese batteries. The signing of this document is evidently unfavorable for companies in the electric vehicle battery industry looking to expand into the U.S. market.

According to the conditions for electric vehicle subsidies under the U.S. IRA Act, starting in 2024, the use of battery components produced by entities from “Foreign Entity of Concern” (FEOC) countries is prohibited. In 2025, the prohibition extends to the use of key minerals processed or recycled in FEOC countries. FEOC encompasses China, North Korea, Russia, and Iran.

The U.S. Department of Energy, in December 2023, released a notification of a proposed interpretive rule, requesting comments to define FEOC, covering overseas subsidiaries of Chinese companies and overseas enterprises with more than 25% ownership by Chinese state-owned enterprises.

However, given the current distribution of the battery supply chain, completely bypassing the Chinese battery supply chain in the U.S. is challenging. Even if feasible, it would come with substantial costs. The result could be a short-term inability to reduce vehicle prices, further impacting the gradually weakening demand for electric vehicles in the United States.

TrendForce indicates that the combined sales of BEVs and PHEVs in the United States totaled approximately 1.46 million vehicles in 2023. Due to the requirement that many vehicles must meet local assembly criteria in the U.S. to qualify for subsidies, numerous models lost subsidies in 2023.

It is expected that in 2024, various automakers will increase the proportion of local assembly, expanding consumer options to stimulate demand. However, stringent conditions for battery adoption could become one of the variables affecting the growth of electric vehicle sales in the United States.

Read more

• China Projected to Export 1.2 Million NEVs in 2023 amid Tightening Tariffs by the US, Says TrendForce
• [News] China’s New Energy Vehicle Penetration Rate Exceeds 40%, Expected Optimistic Growth by 2024

(Photo credit: Pixabay)

TSMC’s trillion-dollar investment plan for a 1nm fab is reportedly set to be established in the science park in Taibao City, Chiayi County, Taiwan. This follows TSMC’s recent announcement of the construction of its third 2nm fab in Kaohsiung, marking yet another strategic choice for advanced processes in southern Taiwan.

According to UDN’s report citing sources, TSMC has submitted a request for 100 hectares (roughly 247.10 acres) of land to the Southern Taiwan Science Park Administration, which oversees the Chiayi Science Park. Of this, 40 hectares (roughly 98.84 acres) are designated for an advanced packaging facility, while the remaining 60 hectares (roughly 148.26 Acres) are earmarked for the construction of a 1nm fab.

As TSMC’s land requirements exceed the initially planned 88 hectares (roughly 217.45 acres) in the first phase of the Chiayi Science Park, there are expectations for an accelerated expansion in the second phase to accommodate TSMC’s needs.

TSMC stated that the selection of the fab site involves various considerations. TSMC considers Taiwan as its primary base but does not rule out any possibilities, and continues to collaborate with the administration to assess suitable semiconductor fab sites. TSMC emphasized that all information should be primarily referred to the company’s official announcements.

As understood, the TSMC fab construction team conducted a site survey in the Chiayi Science Park in August of 2023, before it was incorporated into the jurisdiction of the Southern Taiwan Science Park Administration.

This move came after facing strong opposition during the third-phase expansion in the Longtan Science Park in Taoyuan. Following the intense protests, the TSMC construction team initiated a contingency plan and ultimately decided to abandon the construction project within the Longtan Science Park’s third-phase expansion.

Read more

• [News] TSMC Actively Increases 2-Nanometer Production Capacity Planning, Market Expects Explosive Demand
• [News] TSMC Earnings Conference: Q1 Revenue Estimated to Drop 6.2%, Expects Over 20% Annual Growth

(Photo credit: TSMC)

According to industry sources cited by South Korean media The Chosun Daily, Samsung has commenced the production of prototypes for its second-generation 3nm process and is testing the chip’s performance and reliability. The goal is to achieve a yield rate of over 60% within the next six months.

TSMC and Samsung are both actively vying for customers. Samsung is preparing to commence mass production of the second-generation 3nm GAA architecture in the first half of the year. The key to success in the competition lies in whether Samsung can meet the demands of major clients such as Nvidia, Qualcomm, AMD, and simultaneously achieve a rapid increase in production.

Samsung is currently testing the performance and reliability of prototypes for the second-generation 3nm process, with the initial product set to feature in the soon-to-be-released Galaxy Watch 7 application processor (AP). It is expected to be used in the Galaxy S25 series Exynos 2500 chip next year.

If the production yield and performance of the second-generation 3nm process are stable, there is a chance that customers who had previously switched to TSMC may return to Samsung, especially considering Qualcomm’s movements.

As per report, Qualcomm is collaborating with TSMC in the production of the next-generation Snapdragon 8 Gen 3. Additionally, Nvidia’s H200, B100, and AMD’s MI300X are expected to adopt TSMC’s 3nm process.

Samsung announced in November of last year that it would commence mass production of the second-generation 3nm process in the latter half of 2024. While Samsung has not responded to Chosun’s report regarding the production of prototypes for the second-generation 3nm process, the timeline seems plausible.

However, the report mentions a chip yield rate of 60% without specifying transistor count, chip size, performance, power consumption, or other specifications.

Furthermore, according to Tom’s Hardware’s report, the chip size, performance, and power consumption targets for processors used in smartwatches, mobile phones, and data centers are entirely different. A 60% yield rate for small chips would make commercial use challenging, but for chips with a reticle size of 60% yield rate, it would be reasonably acceptable.

However, caution is advised in interpreting this report due to the uncertainties surrounding Samsung’s second-generation 3nm process production targets at its semiconductor foundries.

Nonetheless, the commencement of the second-generation 3nm process production is a significant development for both Samsung and the semiconductor industry as a whole.

(Image: TSMC)

According to the report from TechNews, Intel CEO Pat Gelsinger, speaking at the World Economic Forum, stated that export sanctions from the United States, Japan, and the Netherlands are temporarily limiting China’s development in semiconductor processes below 7 nanometers.

Despite China’s ongoing efforts to advance its semiconductor industry and design more sophisticated chip manufacturing tools, it still lags behind the global semiconductor industry by approximately ten years, and Gelsinger believes this gap will persist.

Gelsinger suggests that to some extent, the policies of the United States, Japan, and the Netherlands set a threshold of 10 to 7 nanometers for China’s semiconductor industry. Currently, SMIC has 7-nanometer technology, lagging approximately five and a half years behind TSMC and Samsung. Shanghai Huali Microelectronics (HLMC) began trial production based on 14-nanometer FinFET process in 2020, trailing TSMC by nine to ten years.

Both SMIC and HLMC utilize manufacturing equipment and materials from the Netherlands, Japan, South Korea, Taiwan, and the United States. However, due to the unavailability of these raw materials, Chinese companies have had to develop their own wafer fab equipment and find methods for purifying gases, resists, and other chemicals used in advanced chip manufacturing.

Gelsinger estimates that China’s semiconductor industry lags behind the global standard by about ten years and, although it will continue to develop, he foresees this gap persisting for the next decade. Given the highly interconnected nature of the semiconductor industry, encompassing companies like Zeiss, ASML, Japanese chemical suppliers, and Intel for mask manufacturing, he believes that this cumulative difference amounts to a ten-year gap and will continue to do so under export policies.

If China cannot acquire advanced chip equipment and technology, Chinese semiconductor companies might attempt to narrow the gap with the global semiconductor industry through reverse engineering and replication. While not a sustainable approach, it may be the only choice available.

Regarding advanced processes, Gelsinger also mentioned that Intel is actively developing technologies below 2 nanometers and is looking beyond to 1.5 nanometers, stating, “We are racing to go below 2nm and then 1.5nm, and you know we see no end to that in sight.”

(Image: Intel)