According to TechNews’ report, due to ongoing technology infringement disputes and the uncertainty in the tense relations between China and the United States, Samsung Electronics is cutting ties with the leading Chinese display supplier BOE. They are restructuring their supply chain, and other panel manufacturers such as AU Optronics (AUO), Sharp, and LG Display (LGD) are expected to benefit.

According to the Korean media outlet BusinessKorea’s report, industry insiders from South Korea revealed on the 15th that BOE is no longer among Samsung’s top three suppliers for TV panels in Q3, and its market share is starting to decline.

BOE accounted for approximately 10% of Samsung’s TV panel procurement in the first half of the year, originally ranking third among major panel suppliers.。

From the Q3 financial report, it is evident that Samsung has removed BOE from the main supplier list for TV and display screen device panels in the Device Experience (DX) division. This marks the first time since Q4 2015. Analysts believe that Samsung aims to restructure its partner relationships, focusing on domestic enterprises.

Samsung Electronics is planning to sever its medium to long-term partnership with BOE, primarily due to a patent infringement lawsuit involving its subsidiary Samsung Display (SDC) and BOE.

Insiders have revealed that collaboration between Samsung and BOE in the mobile phone panel sector has already ended. As for TV panels, the relationship has become tense due to significant cost pressure on Samsung caused by the panel manufacturer aggressively raising TV panel prices.

South Korean industry insiders anticipate that Samsung will increase collaboration with other suppliers, including LGD, Sharp, and AUO. Industry experts suggest that for next year’s TV panel procurement allocation, Samsung intends to increase the proportion of panels sourced from Japanese, Taiwanese, and South Korean manufacturers.

However, considering the significant production capacity of Chinese panel manufacturers and their production advantages in certain sizes, Samsung does not plan to completely sever cooperation.

Currently, Chinese panel manufacturers maintain an absolute advantage in global production capacity and are working to mend customer relationships. Besides, AUO’s TV panel production capacity may not be able to fully meet customer demands.

Reportedly, in preparation for the supply chain restructuring, LGD plans to increase the utilization rate of its LCD plant in Guangzhou, China, raising shipments from 9 million units this year to 16 million units next year.

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(Photo credit: AUO)

According to CNA’s news, the potential business opportunities in artificial intelligence have spurred major tech giants, with NVIDIA, AMD, Intel, MediaTek, and Qualcomm sequentially launching products featuring the latest AI capabilities.

This AI arms race has expanded its battleground from servers to smartphones and laptops, as companies hope that the infusion of AI will inject vitality into mature markets.

Generative AI is experiencing robust development, with MediaTek considering this year as the “Generative AI Year.” They anticipate a potential paradigm shift in the IC design industry, contributing to increased productivity and significantly impacting IC products.

This not only brings forth new applications but also propels the demand for new algorithms and computational processors.

MediaTek and Qualcomm recently introduced their flagship 5G generative AI mobile chips, the Dimensity 9300 and Snapdragon 8 Gen 3, respectively. The Dimensity 9300, integrated with the built-in APU 790, enables faster and more secure edge AI computing, capable of generating images within 1 second.

MediaTek points out that the smartphone industry is experiencing a gradual growth slowdown, and generative AI is expected to provide new services, potentially stimulating a new wave of consumer demand growth. Smartphones equipped with the Dimensity 9300 and Snapdragon 8 Gen 3 are set to be released gradually by the end of this year.

Targeting the AI personal computer (PC) market, Intel is set to launch the Meteor Lake processor on December 14. Two major computer brands, Acer and ASUS, are both customers for Intel’s AI PC.

High-speed transmission interface chip manufacturer Parade and network communication chip manufacturer Realtek are optimistic. The integration of AI features into personal computers and laptops is expected to stimulate demand for upgrades, leading to a potential increase in PC shipments next year.

In TrendForces’ report on November 8th, it has indicated that the emerging market for AI PCs does not have a clear definition at present, but due to the high costs of upgrading both software and hardware associated with AI PCs, early development will be focused on high-end business users and content creators.

For consumers, current PCs offer a range of cloud AI applications sufficient for daily life and entertainment needs. However, without the emergence of a groundbreaking AI application in the short term to significantly enhance the AI experience, it will be challenging to rapidly boost the adoption of consumer AI PCs.

For the average consumer, with disposable income becoming increasingly tight, the prospect of purchasing an expensive, non-essential computer is likely wishful thinking on the part of suppliers. Nevertheless, looking to the long term, the potential development of more diverse AI tools—along with a price reduction—may still lead to a higher adoption rate of consumer AI PCs.

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(Image: Qualcomm)

This year, increasing demand for ChatGPT, along with ongoing innovations in PC and server technologies, has driven a growing market preference for high-value DRAM chips such as HBM and DDR5. Memory giants are collectively and actively positioning themselves in the production of these products.

DDR5: Micron Unveils New Products, Samsung Plans Line Expansion

The current DDR5 process has advanced to 1β DRAM. In October, Micron announced the release of DDR5 memory based on 1β technology, boasting speeds of up to 7200 MT/s. This product is now shipping to all customers in the data centers and PC markets.

Recently, Micron introduced the 128GB DDR5 RDIMM memory, utilizing 32Gb chips. With speeds of up to 8000 MT/s, it is suitable for servers and workstations. It also employs Micron’s 1β technology, and achieves a 24% improvement in energy efficiency and a 16% reduction in latency. Micron plans to launch models with speeds of 4800 MT/s, 5600 MT/s, and 6400 MT/s in 2024, with a future model reaching 8000 MT/s.

On the other hand, memory giant Samsung is committed to increasing DDR5 production capacity. Reports suggest that Samsung is planning to expand the production of high-value DRAM, investing in the infrastructure for advanced DRAM and increasing R&D spending to solidify its long-term market dominance.

Samsung, report as per KED Global News, is internally considering expanding DDR5 production lines. Given the high value of DDR5 and its adoption in the PC and server markets, this year is essentially regarded as the “year of widespread DDR5 adoption.”

HBM: Expansion Trend Begins, Significant Revenue Growth Expected

Amid the AI boom, HBM continues to gain popularity with demand supply outpacing. To meet this demand, storage giants are actively expanding production.

Recent reports indicate that companies like Samsung are planning to increase HBM production by 2.5 times. Additionally, in early November, it was reported that Samsung, to expand HBM capacity, acquired certain buildings and equipment within the Samsung Display Cheonan Factory. Samsung plans to establish a new packaging line at Cheonan for large-scale HBM production, having spent 10.5 billion Korean won on the acquisition and planning additional investments ranging from 700 billion to 1 trillion Korean won.

Micron, on the other hand, announced the official activation of its Taiwan-based Taichung Fab on November 6th. This facility will integrate advanced probe and 3D- packaging test, producing HBM3E and other products to meet the growing demand in various applications such as AI, data centers, edge computing, and the cloud.

TrendForce indicates that HBM, a memory embedded in high-end AI chips, is primarily supplied by three major vendors: Samsung, SK Hynix, and Micron. With the AI trend driving demand for AI chips, demand for HBM is also expected to increase in 2023 and 2024, prompting manufacturers to ramp up HBM production.

Looking ahead to 2024, the supply of HBM is expected to improve significantly. In terms of specifications, as AI chips demand higher performance, the mainstream for HBM in 2024 is expected to shift to HBM3 and HBM3e. Overall, with increased demand and higher average selling prices for HBM3 and HBM3e compared to the previous generation, HBM revenue is expected to see significant growth in 2024.
(Image: Samsung)

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In May 2023, Hyundai announced a local investment of KRW 2 trillion (approximately USD 1.52 billion) to establish an EV factory in South Korea, with a groundbreaking ceremony held on November 13. The factory is expected to be completed in 2025, with electric vehicle production set to commence in the first quarter of 2026.

The initial production capacity is planned at 200,000 vehicles per year, focusing on electric SUVs under Hyundai’s premium brand, Genesis.

TrendForce’s Insights:

1. IONIQ 5’s High Cost-Performance Welcomed in the North American Market, Serving as a Pillar for Hyundai’s Electric Vehicle Endeavors

The IONIQ 5, built on Hyundai’s E-GMP platform, boasts an 800V charging infrastructure and a 3.5-second acceleration from 0 to 100 km/h, all priced around USD 40,000. In comparison to other 800V competitors in the North American market, such as the Audi e-tron GT, Lucid Air, and Taycan, which are priced at approximately USD 80,000 to 100,000, the IONIQ 5 stands out with competitive features.

South Korea demonstrates a significant level of self-sufficiency in the strategic components of electric vehicles. Battery suppliers Samsung SDI and LG Energy Solution (LGES) rank among the world’s top ten battery suppliers.

Additionally, Hyundai Mobis stands as South Korea’s largest automotive parts supplier, offering a comprehensive product line that includes various components in electric motors and controls. With robust support from a powerful supply chain, this enhances Hyundai’s market competitiveness.

According to Hyundai North America’s reported sales figures for August 2023, the IONIQ 5 and IONIQ 6, both built on the E-GMP platform, collectively sold 5,235 units in the North American market. This reflects a remarkable 245% growth compared to the same period in 2022.

The year-to-date total sales of the IONIQ 5 and 6 reached 28,000 units by August, showing a notable 63% growth compared to the same period last year. It’s noteworthy that these achievements were made without the benefit of the USD 7,500 subsidy under the “Inflation Reduction Act.”

The success of the IONIQ series has bolstered Hyundai’s confidence in making this platform a core element, facilitating the development of related models and further investments in the electric vehicle business.

2. IONIQ Temporarily Pauses Entry into Chinese Market Amidst Intense Homogeneous Product Competition

With the rise of local Chinese automotive brands and the trend toward electrification, Hyundai’s sales in the Chinese market have plummeted from 1.14 million vehicles in 2016 to 250,000 vehicles in 2022, as per data released by the China Association of Automobile Manufacturers.

In 2021, Hyundai sold its first factory in Shunyi to Li Auto, and in June 2023, Hyundai announced plans to sell two more of its remaining four plants.

In the electric vehicle sector, the IONIQ 5 is built on an all-new electric vehicle platform, outperforming earlier models based on oil-to-electric conversion platforms in both overall efficiency and performance. With its affordable price, it presents a formidable challenge to equivalent models in Europe and the United States.

However, given China’s early development of new energy vehicle platforms and the completion of pure electric vehicle platforms by many domestic manufacturers, coupled with highly autonomous supply chains, IONIQ does not enjoy overwhelming advantages in China. Therefore, the initial focus on the European and American markets is a strategically sound decision.

As European and American automakers continue to establish pure electric vehicle platforms and competitors like Audi and Stellantis strengthen their technological exchanges with Chinese manufacturers, the advantages of the E-GMP platform will face challenges. To further enhance the economic scale of their products, the Chinese market remains a crucial challenge that Hyundai cannot ignore.

TrendForce’s late-November panel price update indicates an ongoing decrease in TV panel prices, influenced by subdued demand and ongoing negotiations. In contrast, prices for mainstream-sized MNT and NB panels remain steady.

• TV Panel

Entering the fourth quarter, TV panel shipments have noticeably weakened, with continuous price negotiations between buyers and sellers. Major TV brands have been consistently adjusting order demands since the latter half of the third quarter.

Faced with sluggish demand, panel manufacturers are attempting to slow down the decline in panel prices by expanding the scale of production cuts. The expected decline in TV panel prices for the entire month of November is anticipated to be comparable to the early estimates of the month.

Specifically, 32″, 43″, 50″, and 55″ panels are expected to decrease by USD 2 dollars, while 65″ and 75″ panels are expected to decrease by USD 3 dollars, and 85″ panels are expected to decrease by USD 5 dollars by the end of this month.

• MNT Panel

Entering the fourth quarter, there is a noticeable decline in demand for MNT panels. Some brand customers are beginning to request a reduction in panel prices. However, panel manufacturers are attempting to alleviate the overall price pressure by adjusting product combinations.

Mainstream specification panel prices are holding steady, with a slight decrease in prices for high-end specification panels.

It is anticipated that the prices of mainstream-sized MNT panels will remain stable in November, while larger-sized high-end models may experience a potential decline.

• NB Panel

Entering the fourth quarter, there is a sustained weakening in demand for NB (Notebook) panels. There is a significant divergence in pricing perspectives between buyers and sellers.

Some brand customers believe that panel prices should start to decline, while panel manufacturers insist on maintaining stable prices. However, panel manufacturers are inclined to provide certain purchasing-scale customers with private concessions.

Therefore, it is expected that NB panel prices will remain stable in November at the current stage.

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