During the Snapdragon Summit 2023 in October, Qualcomm made a big announcement by introducing the Snapdragon X Elite chip, built on TSMC’s cutting-edge 4nm process. Qualcomm’s claim is bold; they assert that the chip will deliver superior performance compared to Intel’s x86 architecture and Apple’s M2 chip. Simultaneously, towards the end of October, Apple revealed its own Arm-based M3 chip. Notably, semiconductor giants AMD and NVIDIA are rumored to be exploring the development of new PC processors on the Arm architecture. The future outlook suggests that Arm-based processors may gradually cut in the market share traditionally held by x86 architecture processors.

TrendForce’s Insights:

1. Qualcomm’s New PC Processor Poised to Expand the Arm-Based PC Processor Market

Following Intel’s September 2023 Meteor Lake processor release, Qualcomm introduced the Snapdragon X Elite, its latest Arm-based PC processor in October. This chip leverages TSMC’s advanced 4nm technology. Qualcomm is forging partnerships with Taiwanese heavyweights such as Quanta, Compal, Wistron, Acer, Asus, Realtek, Nuvoton and others, aiming to secure a foothold in the CPU market within the PC supply chain. This collaborative effort is expected to yield new PC products hitting the market in 2024.

As of 2023, Arm commands approximately 11% of the market share. Apple, a pioneer in PC chips built on the Arm architecture, has seen success with the release of three generations of processors since the 2020 debut of M1 chip.

With Qualcomm entering the Arm architecture group, AMD also intends to step into Arm architecture with the upcoming Phoenix processor, set for launch in 2025. There are also whispers of NVIDIA partnering with MediaTek to develop a chip processor featuring SoC+GPU capabilities on the Arm architecture, with an initial focus on ChromeBook market, where MediaTek boasts years of experience.

In the PC market, significant factors include processor development timelines, product performance, power efficiency, extended battery life, and compatibility with software and hardware. High-end CPUs and GPUs have become indispensable components for high-end computers. Currently, Intel leads the CPU market, with AMD following closely in the x86 landscape. As more companies delve into the development of Arm-based processors, there is potential for them to carve a share from the x86 market in the future.

2. Arm Architecture Processors Gain Momentum, Intel Focusing on AI Software Application Processor Development

Apple’s M-series chips demonstrate their efficiency and extended battery life. Microsoft recognizes the advantages of the Arm architecture and is dedicated to fostering a strategic collaboration for Windows on Arm. This collaboration involves integrating operating systems with processors to attract leading manufacturers to engage in Arm-based processor development, aligning with the growing demands for AI PCs.

In the realm of x86 architecture, Intel enjoys a dominant position in the CPU market. To tap into the opportunities arising from AI PCs, Intel has integrated AI acceleration engine features into its processors, introducing a new generation of AI application processors that combine CPU, GPU, and NPU (Neural Processing Unit) functionalities. This caters to the growing demand for generative AI applications in enterprise mobile PCs. Furthermore, Intel has joined forces with major laptop brands to launch new AI PCs, aiming to seize a substantial share of the market.

As momentum grows in Arm-based processor development, Intel maintains confidence that their immediate effect on the demand for x86 architecture processors will be restrained. It is unlikely to hinder Intel’s continuous advancement in developing new processors. Unlike competitors concentrating on Arm architecture processor development, Intel places a stronger focus on AI software applications and the market opportunities arising from its partnership with the Microsoft platform.

Explore more:

• [News] Qualcomm Challenges Intel & AMD in AI PC Chip Race
• [News] Intel, Samsung, TSMC Race in Cutting-Edge Processes

TrendForce released the early November panel price trends today, with TV panel prices experiencing an unstoppable decline, while MNT (Monitor) and NB panel prices remained relatively stable.

TV panel

Entering the fourth quarter, TV panel shipments continue to weaken. However, the attempt by agents to influence panel prices through a surge in shipments of small-sized TV panels seems to have subsided, and panel prices are returning to a more balanced negotiation between buyers and sellers.

Major TV brands have been adjusting their orders since the latter half of the third quarter, and these adjustments have expanded into the all panel sizes in the fourth quarter.

Although panel manufacturers are still controlling production, it appears that they are finding it challenging to resist the decline in panel prices due to sluggish demand. As of the current outlook, it is expected that in November, panel prices will decrease by 2-dollar for the entire month in the sizes of 32″, 43″, 50″, and 55″, while sizes of 65″ and 75″ will experience a 3-dollar drop, and 85″ will face a 5-dollar decline.

MNT Panel

Entering the fourth quarter, demand for MNT panels has started to weaken. In October, mainstream panel sizes showed a tendency to stabilize in terms of pricing, with only some high-end models having slight room for price reductions, especially for high refresh rate specifications.

Currently, it is expected that panel manufacturers will continue to maintain a stable price trend for mainstream size MNT panels in November. However, should brand demand fall short of expectations, there is a possibility of price decreases, particularly in Open Cell panels or in larger-sized, high-end models.

NB Panel

Entering the fourth quarter, demand for NB panels continues to weaken. However, panel manufacturers remain committed to maintaining stable panel prices, especially as they face downward price pressures in TV and MNT panels. Panel manufacturers are reluctant to make significant concessions on NB panel prices, except for the possibility of offering certain discounts through project-based bundling models.

Currently, it is expected that NB panel prices, whether for entry-level TN panels or mid- to high-range IPS panels, will continue to maintain a stable trend in November.

According to TechNews’ report, Foxconn announced its October revenue on November 5th, reaching 741.2 billion NTD (New Taiwan Dollars). This represents a 12.20% month-on-month increase and a 4.56% year-on-year decrease, marking one of the highest revenues for the same period in recent years. For the accumulated revenue in the first ten months of this year, Foxconn achieved 5.494 trillion NTD, marking a 7.21% year-on-year decrease but still staying relatively high compared to past years.

Examining the performance by product categories on a monthly basis, the “Computing Products” category exhibited robust growth, benefiting from pre-holiday stockpiling due to the Chinese “Double 11” Shopping Festival and the Thanksgiving holiday in North America. The “Cloud and Network Products” category also saw strong growth as a result of increased demand from American server brand clients.

The “Smart Consumer Electronics” category experienced growth due to demand for new products, as well as early holiday stockpiling in preparation for Chinese Double 11 and the North American Thanksgiving. In contrast, the “Components and Other Products” category remained relatively stable month-over-month, as increased shipments of components for consumer intelligent products were offset by reduced demand in non-core business segments.

Looking at annual performance by product categories, the “Components and Other Products” category experienced substantial growth, attributed to an increased share of supply in consumer intelligent products and growth in shipments of automotive electronic components. The “Consumer Intelligent Products” category remained relatively steady.

In contrast, the “Cloud and Network Products” category displayed a more conservative momentum in client pull-ins, and the “Computer Terminal Products” category showed signs of weakening due to a slowdown in PC market demand.

Foxconn’s outlook for the fourth quarter remains positive, anticipating that the latter half of the year will benefit from the traditional peak season in the information technology industry. Therefore, operations are expected to gradually pick up each quarter, and the company maintains its view that the fourth quarter will exhibit significant growth compared to the third quarter.

Recent report from Anue has also suggested that Foxconn secured more than half of the orders for the MacBook series for the first time this year, along with strong sales of the iPhone 15 Pro, which are likely to drive revenue growth in the fourth quarter.

(Photo credit: Foxconn)

Ford announced the withdrawal of its full-year financial forecast due to the impact of the recent labor strike and ongoing challenges in the EV sector. Most consumers are reluctant to pay higher prices for electric cars compared to traditional or hybrid vehicles. Ford also postponed its planned $12 billion investment in expanding electric vehicle production capacity but remains committed to its goal of advancing its electric vehicle business.

TrendForce’s Insights:

1. Slower Market Demand Spurs Automakers to Rethink EV Strategies

The United Auto Workers (UAW) union initiated a six-week strike in Detroit starting on September 15, 2023, motivated by demands for improved compensation and benefits. The strike came to an end when consensus was reached with Ford, Stellantis, and GM (General Motors), resulting in the signing of a new contract.

According to predictions from Deutsche Bank, this new agreement will add an estimated $6.2 to $7.2 billion in costs for each of the three major automakers. This cost increase is nearly equivalent to the expense of building an electric vehicle platform. Compounded by the impact of slowing demand for global new energy vehicles (BEV and PHEV), with growth rates decreasing from 54% in 2022 to 30% in 2023, Ford announced the suspension of its $12 billion electric vehicle investment plan. This plan includes its partnership with SK On for a battery factory and a partly reduction in production capacity for the Mustang Mach-E.

2. Automakers Must Adopt More Practical EV Development Strategies to Address Price and Range Concerns

The slowdown in electric vehicle market demand stems from the issues of high vehicle prices and range anxiety, which affect consumer willingness to make a purchase. Addressing these two problems requires increasing battery energy density to achieve comparable driving range to conventional vehicles and constructing an adequate charging infrastructure. However, achieving these goals will take time and effort.

With range anxiety still unresolved and the goal of banning fossil fuel vehicles unchanged, automakers positioned between policy and the market face transition risks. At this juncture, choosing to independently develop electric vehicle platforms might add financial burden and risk, with the associated costs reflected in vehicle prices, potentially eroding competitiveness. A more practical approach would involve considering alternative development strategies, such as exploring platform outsourcing to reduce manufacturing costs.

Automakers or Tier 1 suppliers with proprietary electric vehicle platforms have the option to lease their platform production capacity to companies that are currently unable or unwilling to independently develop their own platforms. This strategy can increase production efficiency for lessees, allowing them to commission the production of all or some of their electric vehicle models from the lessor, ultimately reducing manufacturing costs and accelerating the release of new vehicle models.

By doing so, companies can maintain their market share in the electric vehicle race while waiting for the right opportunity to reevaluate the potential for developing their own electric vehicle platforms. In summary, as the demand for electric vehicles slows down, automakers will face tighter financial constraints, making it crucial for them to explore how to collaboratively leverage existing resources to create electric vehicles that align with market demands.

Read more

• [News] Ford Shifts EV Investment Focus Amidst Fierce Price Competition

(Photo credit: Ford’s Facebook)