In a strong push for foldable smartphones, reportedly, Huawei has issued rush orders to its supply chain lately. The shipment target for foldable smartphones this year is set at ten million units, marking a nearly threefold increase from the 2.6 million units shipped last year.

Previous rumors suggested that Huawei was considering lowering its foldable smartphone shipment targets for this year. However, the industry sources from related supply chain emphasizes that not only did Huawei refrain from reducing orders, but it significantly increased them.

According to Economic Daily News cited from supply chain sources, Huawei has set very ambitious goals for foldable smartphone shipments this year, aiming to increase from last year’s 2.6 million units to a range of 7 to 10 million units. This represents a nearly threefold increase, requiring additional support from various components.

Among them, the critical mobile phone component CIS, due to a rebound from the market downturn, has seen prices starting to surge. Main CIS supplier, Samsung, has raised prices by 25% to 30% this quarter.

To avoid the risk of escalating prices, CIS has become Huawei’s top priority for stocking up, primarily supplied by the Chinese CIS supplier, OmniVision. The substantial increase in overall shipment targets for foldable smartphone has driven a several-fold growth in CIS stockpiles.

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(Photo credit: Huawei)

With the semiconductor market facing uncertainties and limited signs of industry recovery in the first half of 2024, foundries in China, Taiwan, and South Korea are all implementing price reductions to secure orders and solidify customer relationships.

According to TechNews citing from supply chain sources, Samsung Foundry, which had not taken action previously, is expected to follow suit with price cuts in the first quarter to keep pace with competitors.

Reportedly, industry sources suggest that Samsung Foundry is adopting a price reduction strategy in the first quarter of 2024, offering discounts ranging from 5% to 15% and expressing a willingness to negotiate.

Samsung Foundry’s actions can be interpreted as a goodwill gesture towards its customers. The company has been in constant competition with TSMC, especially in processes below 5nm, and actively engaging in negotiations with customers, seeking collaboration opportunities with Qualcomm, NVIDIA, AMD and others.

Considering the subdued semiconductor market in 2023, fabs in both China and South Korea have implemented price cuts to secure orders. The price reductions for mature processes in 8-inch and 12-inch wafer reached 20-30%, while Taiwanese fabs have also made concessions in pricing.

TSMC, the leading foundry, had already been reported to offer price concessions in 2023, with the major focus on mask costs rather than foundry services. It was mentioned at that time that TSMC’s price concessions primarily applied to the 7nm process, where utilization rates were lower, and the extent of concessions depended on the volume of orders from customers.

In terms of the global foundry landscape, according to data published by TrendForce, Taiwan holds approximately 46% of global foundry capacity, followed by China (26%), South Korea (12%), the US (6%), and Japan (2%).

However, due to government incentives and subsidies promoting local production in countries like China and the US, the semiconductor production capacities of Taiwan and South Korea are projected to decrease to 41% and 10%, respectively, by 2027.

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• [News] TSMC to Expedite Production of NVIDIA’s Specialized Chips for China

(Photo credit: Samsung)

In October of 2023, the U.S. government expanded its restrictions on chip exports, limiting NVIDIA from exporting certain chips to China without prior permission. Despite this, NVIDIA is not expected to relinquish the Chinese market and may commence production of the AI chip “H20,” specifically designed for China, in the second quarter of this year.

According to a report from Wccftech, there is keen interest in NVIDIA’s potential exclusive chips for China, including H20, L20, and L2, intended to replace H100, L40, and L4, catering to the AI training needs of Chinese customers.

NVIDIA is reportedly trying to accelerate its return to the Chinese AI chip market, expecting to quickly regain its advantage and market share. It is understood that the main base board supplier for the new product remains Wistron.

The orders from the relevant supply chain manufacturers’ clients will be deferred and are expected to see substantial shipments starting from the second quarter.

The report indicates that progress on these chip projects is steady, and the products fully comply with U.S. export restrictions. Production of the H20 is expected to commence in the second quarter.

Furthermore, it is reported that these GPUs were originally scheduled for release at the end of 2023 but faced delays due to the ongoing tensions between China and the US.

NVIDIA emphasized that the AI chip designed specifically for the Chinese market will fully comply with the requirements and guidelines of the U.S. Department of Commerce, subsequently enabling the launch of the GeForce RTX 4090D in China.

Industry sources estimate that NVIDIA is actively seeking to comply with U.S. government computing power regulations by further reducing the customized chip’s performance. However, due to missing a sales opportunity, many Chinese customers have begun exploring the purchase of local AI chips as an alternative to NVIDIA products.

This is primarily driven by the availability and competitive cost-effectiveness of Chinese chips, with several Chinese companies switching to Huawei products for AI training.

While NVIDIA has significantly streamlined the H20 to meet local demands in China, with computing power reduced to only 15% of the H100, the H20 still aims to strengthen its competitive advantage in specifications.

According to leaked specifications circulating online at the end of 2023, the H20 boasts a FP8 computing power of 296 TFLOPs and FP16 computing power of 148 TFLOPs, with an increased memory capacity of 96GB compared to the H100’s 80GB.

However, domestically-produced chips in China are also formidable. It is claimed that the performance of the H20 is only one-fourth that of Huawei’s HiSilicon Ascend 910B, yet its price is exceptionally high. Therefore, for some Chinese enterprises, there is still an incentive to adopt self-developed AI chips. In the future, whether the potential for domestically-produced AI chips in China can disrupt NVIDIA’s monopoly is yet to be seen.

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• [News] TSMC to Expedite Production of NVIDIA’s Specialized Chips for China

(Photo credit: NVIDIA)

With its 3nm manufacturing process in mass production for approximately a year, TSMC is expected to have a breakthrough in customer acquisition and capacity utilization in 2024.

According to predictions from a South Korean outlet The Elec, aside from Apple, customers such as NVIDIA, AMD, Qualcomm, and MediaTek are expected to place orders for the second generation of the 3nm process within the year. This is anticipated to significantly boost TSMC’s 3nm process capacity utilization to 80% by the end of the year.

Chinese tech media ICsmart further quoted from the report, stating that although TSMC announced the mass production of its 3nm process in December 2022, the first-generation 3nm process (N3B) had only one customer throughout 2023, which was Apple. Companies like MediaTek and Qualcomm opted for the 4nm process due to cost considerations.

However, the report suggests that in 2024, more companies, in addition to Apple, are expected to place orders for the more cost-effective second generation of the 3nm process (N3E). This is anticipated to boost TSMC’s overall production capacity for the 3nm process.

Several chip companies are expected to adopt the N3E process for their new products. The report suggests that TSMC’s customers for this process may include Qualcomm, which is gearing up to launch the new Snapdragon 8 Gen 4, MediaTek with its next-generation Dimensity 9400, Apple with its M3 Ultra chip and A18 Pro processor, AMD with the Zen 5 CPU and RDNA 4 GPU, and NVIDIA with the Blackwell architecture GPU. Notably, the Apple M3 Ultra chip might make its debut in the upgraded Mac Studio around mid-year.

The report notes that TSMC initially anticipated steady growth for the 3nm process in early 2023 as yields improved, but with only Apple as a customer, the “steady growth” of the 3nm process negatively impacted TSMC’s performance.

The report suggests that with TSMC’s new orders from customers beyond Apple for the 3nm process, a considerable rebound is expected. Monthly production is projected to reach 100,000 wafers by 2024, and the 3nm production capacity utilization rate is poised to soar to 80% by the end of 2024.

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(Photo credit: TSMC)

During last year’s WWDC conference, Apple unveiled its first-ever head-mounted display product, the Vision Pro. At that time, the official statement mentioned a scheduled market release in early 2024, prompting speculation about the precise launch date of Vision Pro.

According to Chinese media outlet “Wall Street” citing information from supply chain sources, Vision Pro is expected to be launched in the United States on January 27. However, some media outlets have suggested that the mentioned “January 27” is likely in China time, translating to January 26 in U.S. time, as Apple rarely introduces new products on Saturdays.

However, Bloomberg Chief Correspondent Mark Gurman pointed out that Apple has experience launching new products on Saturdays, citing the initial iPad release. Gurman acknowledged that January 26 is indeed a date heard recently from several Chinese supply chain sources.

Regardless of the official release date for Vision Pro, current rumors align with the earlier predictions of TF International Securities analyst Ming-Chi Kuo, who anticipated Vision Pro to hit shelves at the end of January or early February.

Additionally, Gurman reiterated on his own X platform that Apple plans to launch the retail version of Vision Pro in February.

(Image: Apple)