In the third quarter of 2023, the passive component industry’s inventory has returned to normal levels. However, it continues to deplete due to sluggish end-demand. Nevertheless, downstream customers in the mobile phone and automotive sectors have begun rebuilding their inventories. Ample Electronic Technology, a major manufacturer of conductive paste and thick-film conductor materials, has already seen a recovery in its August 2023 revenue, indicating that the inventory adjustment process in the passive component industry, which began in the fourth quarter of 2021, has gradually bottomed out over nearly two years.

TrendForce Insights:

• Upstream operations in the passive component industry are rebounding, but true demand recovery awaits.

In the second quarter of 2023, the passive component industry’s inventory approached normal levels. However, due to weak end-demand, Chinese smartphone and PC manufacturers significantly reduced their component inventories in the second quarter of 2023, leading to continued poor performance for passive component manufacturers. It is expected that after hitting the bottom in the third quarter of 2023, operations will gradually improve. However, the timing of true demand recovery may need to wait until 2024, given the persistently sluggish consumer electronics market.

• AI servers are on the rise, and inductive components are in demand.

General-purpose servers primarily use molding power inductors, with quantities ranging from 20 to 30, an ASP of approximately $0.07 to $0.1 per unit, and a current rating of only 30 to 40A. In contrast, AI servers have power consumption levels generally exceeding 1000W. To improve transient response performance, each AI server requires an additional 10 TLVR (Trans Inductor Voltage Regulator) inductors, with an ASP of around $0.3 per unit. This significantly increases the revenue of inductance components for AI servers compared to general-purpose servers.

• Promising prospects in the automotive market, but validation takes time.

Conventional internal combustion engine vehicles require approximately 300 to 500 MLCCs (Multilayer Ceramic Capacitors), while Battery Electric Vehicles (BEVs) require between 2,000 and 2,500 MLCCs. Self-driving systems will also drive MLCC demand. For instance, in the case of automotive camera modules, the quantity increases from 2 to 10 to 15. From a holistic perspective, non-self-driving internal combustion engine vehicles require around 3,000 MLCCs, Hybrid Electric Vehicles (HEVs) with Level 2 autonomy need over 6,000 MLCCs, and Level 3 Electric Vehicles (EVs) require more than 10,000 MLCCs. This leads to a significant increase in the revenue of automotive MLCCs.

However, entering the automotive sector is challenging and requires at least 1 to 2 years for certification. Nevertheless, once established, it can secure long-term agreements for at least 5 years. Additionally, compared to the slowing growth of the consumer electronics market, the automotive sector offers substantial opportunities and provides a buffer against the cyclicality of passive component industries.

TrendForce anticipates that by 2026, the global tally of public charging stations will soar to 16 million, marking an impressive threefold increase from 2023 figures. As this unfolds, the global ownership of NEVs—which includes both PHEVs and BEVs—will surge to 96 million. This sets the vehicle-to-charger ratio at 6:1, a significant drop from the 10:1 ratio observed in 2021. Notably, major players like China are paving the way; having set ambitious goals to achieve a vehicle-to-charger ratio of 2:1 by 2030, China is unquestionably a driving force in the global push to reduce this ratio.

Europe is steaming ahead with its net-zero blueprint, targeting the construction of a whopping 17 million charging stations by 2030. America, though, presents a contrasting picture. With a little over 200,000 charging stations currently, the Biden administration aspires to hit the 500,000 mark by 2026. Unfortunately, this will coincide with a projected NEV count of 15 million, exacerbating the vehicle-to-charger ratio to 32:1 Around the same period, Europe and China are projected to sport more modest ratios of approximately 9:1 and 4:1, respectively. Using Europe’s ratio as a yardstick, the US charging infrastructure ambition may need to be bolstered by at least three to four times.

NEV owners globally grapple with a maze of charging standards. Prominent among these are the US standard CCS1 (Combo), the European standard CCS2 (Combo), Japan’s CHAdeMO, China’s GB/T, and Tesla’s NACS standard. Europe and China offer a simpler scenario for their citizens by adhering to a single domestic standard. In contrast, the US is a battleground, with both CCS1 and NACS standards vying for dominance. While adapters provide a temporary bridge between the two, the rapid rise of NACS kindles apprehension among CCS1 aficionados about their future stake.

A diverse array of charging standards across the globe means charging equipment manufacturers must adopt flexible product strategies to cater to different market specifications. Spotlighting Taiwanese firms: Hotron Precision’s charging cables, Longwell’s and SINBOS’s integrated charging systems are all laying tracks across GB/T, CCS1, and CCS2 standards. A feather in the cap for Hotron Precision is its induction into Tesla’s supply chain, while Longwell and SINBON primarily cater to North American charging enterprises. Riding the wave, following proclamations by giants like Ford, GM, and Volvo favoring the NACS standard in North America, charging station behemoths like Zerova and LITEON have thrown their hats into the NACS ring.

From 2025, the landscape will shift dramatically as countries step on the gas to phase out gasoline-fueled vehicles. While the ramp-up of charging station infrastructure still lags, auto giants are bracing themselves to spearhead the charging station market boom. Case in point: Titans like GM, Mercedes-Benz, BMW, HONDA, Hyundai-Kia, and Stellantis are joining forces to spin off dedicated charging infrastructure companies. Furthermore, TrendForce offers a nugget of advice for Taiwanese manufacturers: to stay ahead of the curve and serve North American clientele more effectively, consider setting up shop locally. With Pegatron and Delta Electronics already marking their territory in Texas, the focus for Taiwanese firms should be on nimbleness and adaptability, ensuring they remain unshackled by a single standard.

TV panel prices have reached relatively high levels after nearly two-quarters of increases. Brand customers face the dual pressures of weak demand and rising procurement costs, leading to early adjustments in their purchasing strategies. Third-quarter TV panel procurement has been revised down from the previous estimated 6-7% quarterly growth to near-flat levels. Fourth-quarter demand is also expected to decrease, requiring panel manufacturers to prepare for the off-season. Panel prices are anticipated to stabilize in late September.

Monitor panel demand surged in the second quarter, but third-quarter shipments are only expected to grow by 1~2%. As we approach the fourth quarter, brand customers will feel more pressure to adjust their demand. After a few months of slight price increases, monitor panel prices are expected to stabilize across the board in September.

Notebook panel demand peaked in August of the third quarter and is expected to dip slightly in September. However, overall third-quarter shipments are set to grow slightly compared to the second quarter. Some panel manufacturers aim to maintain price increases. With major brands increasing safety stock levels or working toward year-end goals, a marginal USD 0.1 increase in notebook panel prices is expected in September.

Report to Voice, After the release of the Huawei Mate 60 Pro, various components have begun to experience the long-lost sensation of surging demand, replenishment, and stockpiling. With the launch of the Apple iPhone 15, the once sluggish global consumer electronics market has suddenly come back to life. The current mindset among storage manufacturers is clear: regardless of whether there is a real or perceived shortage, the goal before the year-end is to raise prices until they are no longer incurring losses.

Leading storage giants have gone through a series of price drops, losses, and production reductions, and are now officially entering the “price hike” phase. Samsung, SK Hynix, Micron, and others have already expressed their intention to raise NAND Flash contract prices.

According to TrendForce latest price projection on NAND Flash, in response to persistent softening in demand, Samsung has taken a decisive step: a sweeping 50% production cut from September, with the focus mainly on processes under 128 layers. Other suppliers are also expected to follow suit and increase their production cutbacks in the fourth quarter to accelerate inventory reduction. With this maneuver in play, Q4 NAND Flash average prices are projected to either hold firm or witness a mild surge, possibly in the ballpark of 0~5%.

YMTC now is facing surging demand from both smartphone and module manufacturers. It is reported that the production capacity for the period up to 1H24 has already been fully booked, with PC and server manufacturers sharing the capacity, while module manufacturers may receive a smaller share.

The current NAND Flash market situation is such that trying to negotiate increased supply with NAND Flash manufacturers like Samsung, Micron, and YMTC may yield little new capacity, and accepting higher prices may be inevitable.

The sudden pre-sale launch of the Huawei Mate 60 Pro has undoubtedly acted as a major catalyst for the current smartphone market. Without it, many smartphone supply chain companies believed that the smartphone market wouldn’t recover until the second half of 2024, and the most pessimistic among them even doubted if it would improve by 2024. The release of the Huawei Mate 60 Pro and the Apple iPhone 15 has injected a long-awaited warmth into the global smartphone market, reinvigorating the entire smartphone component supply chain.

In recent times, the top-tier iPhone 15 Pro Max from Apple’s iPhone 15 series is expected to be available only in November, which some interpret as a sign of strong demand. However, it is more likely due to production bottlenecks, particularly related to technologies like CIS, which have resulted in limited shipments of the iPhone 15 Pro Max. Overall, the estimated shipment volume for the iPhone 15 series may still reach up to 80 million units.

Is this resurgence in smartphone demand a lasting trend with increased consumer willingness to upgrade, or is it a temporary phenomenon? Optimists and conservatives hold differing views, but what is certain is that the global smartphone shipment volume has entered a mature phase, with limited room for significant growth driven solely by new features. However, the storage capacity in each smartphone continues to increase, providing substantial opportunities for existing supply chain manufacturers.

While new opportunities like automotive and AI have emerged, there is still no demand in any new field that can entirely replace the massive smartphone market. Therefore, the consensus within the global tech industry is that for the economy to rebound, the consumer electronics sector, particularly smartphones, is indispensable at this stage. AI and electric vehicles alone cannot take the place of smartphones. (Image credit: YMTC)

(Source: https://mp.weixin.qq.com/s/cb0kRUpWU6MElLNh9CR9eA)

Report to InfoTimes, Chinese electric vehicle giant BYD is making impressive strides in Southeast Asia, not only leaving strong rivals like Tesla far behind but also dominating the market share in the region. Currently, in the local market, at least one out of every four electric vehicles is a BYD.

Industry analysts point out that BYD’s competitive advantage lies in its affordability and high value for money. Early on, the company partnered with large enterprises and conglomerates in Southeast Asia, adopting a distribution model to sell its vehicles. This approach allowed BYD to gradually expand its influence, understand the preferences of Southeast Asian car owners, and navigate the complex local regulations without running afoul of them.

According to TrendForce, in Q2, BEVs alone posted sales of 2.151 million units, marking 39.3% growth YoY. While Tesla maintains the lead with a market share of 21.7%, but BYD trails closely behind with a boosted share of 16.2%. In PHEVs, with the registering sales of 876,000 units in Q2—a striking 52.9% YoY increase. Astonishingly, about 66% of these sales hailed from the Chinese market. In this segment, BYD continued its lead with a whopping 36.5% market share.

In fact, this sales model is not something BYD pioneered. Japanese automakers employed a similar strategy decades ago when entering Southeast Asia. Collaborating with local businesses in a united front, as opposed to competing directly with Tesla, set BYD’s marketing approach apart.

Data reveals that BYD has forged partnerships with various Southeast Asian entities, including Sime Darby, a conglomerate with over a century of history in Malaysia and Singapore, Bakrie & Brothers in Indonesia, Ayala, a renowned conglomerate in the Philippines, and Rever Automotive in Thailand.

Automobile sales consultancy firm Urban Science believes that BYD’s collaboration with prominent local conglomerates helps establish a stable foothold before gaining fame. When Southeast Asian consumers have reservations about Chinese-made cars, knowing that well-known large corporations are involved should provide reassurance, particularly in terms of after-sales service.

Recently, BYD has invested nearly $500 million in building a new factory in Thailand. Starting in 2024, it aims to produce 150,000 electric vehicles annually and export them to various Southeast Asian and European countries. AC Motors, a subsidiary of the Philippines’ Ayala Group, plans to establish more than ten BYD service centers in the Philippines within the next 12 months.

AC Motors emphasizes that the initial focus of its operations is on building brand confidence and encouraging more people to consider buying electric vehicles. Some individuals may have concerns about running out of power with electric cars or find their prices too high.

Currently, Tesla has only opened two stores in Singapore, which caters to a higher-income demographic. However, Tesla is also actively recruiting in Thailand and Malaysia. Leveraging Elon Musk’s personal global influence, Tesla can operate directly toward consumers after leaving the United States, a strategy that sets it apart from other automakers.

To increase its visibility, BYD has partnered with Sime Darby Group to launch five BYD by 1826 centers in Singapore, combining car showrooms with delicious restaurants. This innovative approach aims to attract more people to discover the BYD brand through fine dining and, in turn, become part of BYD’s growing community of car owners. (Image credit: BYD)

(Source: https://www.chinatimes.com/cn/realtimenews/20230919001709-260410?chdtv)