Huawei’s official website unexpectedly unveiled its latest flagship smartphone, the Mate 60 Pro, on August 29, 2023, followed by the release of the Mate 60 the next day. The Mate 60 Pro’s performance, powered by the Kirin 9000S SoC, has garnered significant attention in the market.

TrendForce’s Insights:

• Kirin 9000S Offers Comparable Computing Power to 2021 Flagships, But Energy Efficiency May Lag

According to benchmark test results from the Geekbench Browser, a product known as Huawei LNA-AL00, believed to be housing the Kirin 9000S, first appeared in test data on March 30, 2023, and has been continually updated since. The test results for Huawei LNA-AL00 during this period fall into two ranges. One range is roughly equivalent to the Qualcomm Snapdragon 8+ Gen 1, while the other is on par with the Qualcomm Snapdragon 888. This suggests potential variations in Kirin 9000S versions.

Further analysis of the Kirin 9000S reveals that its CPU architecture maintains the 1+3+4 configuration of the Kirin 9000 but operates at slightly lower clock speeds, with a difference of approximately 10-20%. The GPU is Huawei’s in-house Maleoon 910. However, in comparison to the Kirin 9000, which employs TSMC’s 5nm process, the Kirin 9000S has a larger chip size, roughly 30% larger. Additionally, the presence of a large Vapor Chamber beneath the Mate 60 Pro’s screen indicates that the Kirin 9000S may have higher energy consumption, reflecting the use of a less advanced process than TSMC’s 7nm. Overall, Kirin 9000S is expected to offer computing performance similar to mainstream flagships from 2021-2022, but its energy efficiency might align with levels seen in 2019-2020.

• Maintaining Performance Gap with Other Flagship SoCs Will Be a Key Challenge for Huawei and SMIC

Based on available information, Kirin 9000S is likely produced by SMIC. Currently, SMIC’s advanced process nodes include 14nm, N+1, and N+2. Since SMIC has indicated that the N+1 process is not equivalent to 7nm, it is speculated to fall between 10-8nm. To produce Kirin 9000S, it would need to utilize an N+2 process closer to 7nm, which is currently the most suitable process node for domestic wafer foundries in China.

Kirin 9000S undoubtedly represents the pinnacle of China’s domestic IC design and manufacturing capabilities. In terms of computing performance, it lags only 2-3 years behind Qualcomm and MediaTek’s upcoming flagship SoCs set to be launched in the second half of 2023. However, without access to EUV equipment, SMIC faces significant challenges in developing processes below 7nm, and even achieving mass production at 5nm is not a short-term goal.

As Qualcomm and MediaTek advance their products to 4nm and below, the Kirin series will likely remain constrained by SMIC’s process technology, making it difficult to significantly increase clock speeds and reduce power consumption. This situation will lead to a gradual widening of the performance gap between the Kirin series and Snapdragon 8 Gen series, and the Dimensity series. As they grapple with the responsibility of technological advancement, maintaining a competitive performance gap for the Kirin series against other flagship SoCs will be a primary challenge for Huawei and SMIC moving forward.

(Photo credit: Huawei)

DRAM Spot Market
Compared with last week, transaction prices in the spot market have generally stopped falling, but there is no sustained upward momentum. Although suppliers and other spot sellers have been firm on prices and are unwilling to make further concessions, the overall transaction volume has continued to shrink because there has been no turnaround in the demand for end products. Further observations are needed to determine the trajectory of spot prices in the future. Nevertheless, TrendForce believes that suppliers will need to further expand the scale of their production cuts in 4Q23 in order to effectively reduce their existing inventories. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) dropped by 0.07% from US$1.451 last week to US$1.450 this week.

NAND Flash Spot Market
Concluded prices have largely leveled to that of last week without dynamics for ongoing increment. Buyers, despite active stocking behaviors seen recently, are no longer following up on prices aggressively under the yet-to-be-improved level of actual end demand. Subsequent spot price trends will require further observation, though TrendForce believes that NAND Flash suppliers would be forced to expand production cuts during 4Q23 so as to further abate their existing inventory. 512Gb TLC wafer spots have risen by 0.63% this week, arriving at US$1.588.

According to a report by Taiwan’s Central News Agency, Tien Wu, CEO of the semiconductor packaging and testing giant ASE Group, believes that the semiconductor industry is experiencing ongoing inventory adjustments, with uncertainties remaining in the global economy. However, he maintains a positive long-term outlook, asserting that semiconductor demand remains robust. Wu also revealed that ASE Group is expanding its operations in Penang, Malaysia, with expectations of doubling its revenue to $750 million within 2 to 3 years.

The 2023 Semicon Taiwan is set to begin on the 6th, and when discussing the economic outlook for the second half of the year, Wu noted that the semiconductor industry is well-aware of the current inventory corrections and the lingering global economic uncertainties. Nevertheless, he maintains relative optimism about the industry’s long-term development.

Regarding the company’s involvement in advanced packaging, such as Chip-on-Wafer-on-Substrate (CoWoS), Wu mentioned that ASE Group offers corresponding services in this field. When asked about the contribution of artificial intelligence (AI) applications and advanced packaging to the company’s portfolio, he stated that it’s currently challenging to evaluate. However, he emphasized that AI is a significant focus for ASE Group.

In response to inquiries about whether customers have requested ASE Group to shift a portion of its production capacity outside of Taiwan (Taiwan+1) to mitigate risks, Wu clarified that there have been no specific requests from customers regarding proportional capacity transfers or deadlines for such transfers. Production capacity adjustments are primarily made flexibly, contingent on the readiness of the local supply chain. He emphasized that customer discussions regarding capacity adjustments are rational and logical.

Wu stressed that customer demands are being met in accordance with logic and regulatory considerations. In response to urgent service needs, ASE Group is expanding its operations in locations outside Taiwan. However, this does not signify a complete relocation of Taiwanese production capacity, nor does it indicate that customers have mandated such a shift.

He disclosed that ASE Group’s expansion is taking place in Penang, Malaysia, with the first five-story building expected to be completed by July next year. Plans are in place for a second building by 2025. Currently, ASE Group’s Penang facility generates approximately $350 million in annual revenue. It is projected that within 2 to 3 years, the facility’s revenue will double to $750 million.

In addition to its California presence, Wu highlighted that the ASE Group subsidiary, ISE Labs, has expanded its capacity in San Jose to meet customer demands. He emphasized that ASE Group continues to expand its operations in Taiwan as well, including locations in Zhongli, Kaohsiung, Taichung’s Tanzi.

(Photo credit: ASE)

According to a report by TechNews, TrendForce held the Micro LED Forum 2023 on the 5th, inviting numerous companies to share insights on the next-generation display market trends. Eric Chiou, Senior Research Vice President at TrendForce, believes that Micro LED technology is making significant strides in the metaverse sector this year. Many technological challenges need to be overcome, such as semiconductor integration techniques. Ever since AUO announced the mass production of Micro LED watches, cost reduction has become a major focus for many companies.

Chiou stated that to cut costs, chips are the most effective components to optimize. Manufacturers are shifting from using 6-inch wafers to 8-inch wafers for chip production to help reduce costs. In terms of mass transfer techniques, a few years ago, stamp transfer technology was in use, but the industry has been increasingly leaning towards laser transfer while striving for efficiency. In the future, there’s a strong possibility of moving towards a “hybrid transfer” approach, which combines stamp transfer and laser bonding methods.

For instance, companies purchasing equipment might conduct in-house experiments and modify equipment to suit their needs. Equipment providers are also drawing from industry experience to create new solutions, offering next-generation equipment to inexperienced customers, making the production process more practical.

Regarding product development, the most evident direction for Micro LED is in smartwatches. Chiou revealed that by 2026, the cost of a 2.12-inch Micro LED Apple Watch from Apple could potentially drop to $100, compared to the current $40-50 for OLED displays. This suggests that Micro LED may pose strong competition to OLED in the near future.

TrendForce anticipates that Apple Watch will attract more brands to invest in the development and promotion of Micro LED wearable devices, leading to a compound annual growth rate of 873% from 2022 to 2027. This year, the Micro LED chip production value is approximately $27 million, and with the market’s continuous expansion, it is expected to reach $600 million. The compound annual growth rate from 2022 to 2027 is projected to be 111%.

Dr. Mingchi Hsu, Special Assistant at the AUO Display Development Center, mentioned during the forum that the challenges of mass transfer in Micro LED technology were previously considered bottlenecks, but significant improvements have been made in the last two years. As for the inspection and repair aspects, AUO has developed its own equipment and has already completed its development.

Porotech’s primary technologies include Dynamic Pixel Tuning (DPT) and PoroGaN technology. Daniel He, Director of Product and Marketing Taiwan Branch Manager at Porotech, disclosed that they are currently mass-producing 8-inch GaN wafers and collaborating with Taiwanese foundries. Although they can produce 12-inch GaN chips, they plan to observe market response before proceeding.

Mr. Lin Mao-Song, General Manager of Coherent Technologies, a leading laser source technology company, stated that the inspection and repair phase in Micro LED manufacturing might be longer than the actual manufacturing process. A 99.95% yield rate implies a high repair proportion, making it crucial to enhance production yield and reduce costs. Laser technology plays a significant role in increasing production speed and yield, with excimer laser being the best choice for repair and mass transfer, achieving yields of over 99.99%.

In the realm of TV panels, after experiencing consecutive growth for two quarters, brand customers are increasingly feeling the pressure of rising procurement costs. Additionally, with the momentum for year-end promotions gradually winding down, brand customers are preparing to adjust their TV panel purchases, with these adjustments expected to gradually reflect in price trends over the coming months. Looking at TV panel prices in September, it is currently projected that 32-inch and 43-inch prices will remain stable, while 50-inch and 55-inch models will see a $1 increase, and 65-inch and 75-inch models will see a $3 increase. Compared to the previous months, price increases are expected to show significant convergence.

On the monitor panel front, demand in the commercial sector continues to be weak, and brand customers in the consumer sector are gradually reducing their procurement needs. Furthermore, they are adopting a more conservative outlook for fourth-quarter demand, resulting in a shrinking price increase potential. While there is still some room for minor upward adjustments in prices for certain lower-priced models, overall, the trend of continuous price increases witnessed in recent months is expected to cease. It is currently anticipated that monitor panel prices in September will remain stable across the board.

Turning our attention to notebook panels, overall demand has reached its peak. However, panel manufacturers remain proactive in pushing for higher panel prices. When it comes to specifications, demand for lower-tier TN models is still relatively stronger compared to mid to high-tier IPS models. Consequently, there is a possibility of TN panel prices maintaining their previous months’ upward trend, while IPS panels also have a chance of seeing price increases in September due to the active efforts of panel manufacturers. It is currently projected that lower-tier TN models may see a $0.2 increase in September, while mid to high-tier IPS models may see a $0.1 increase.