According to the news reports from money.udn, which indicate that Foxconn, the prominent tech manufacturer, has clinched a substantial contract to supply Apple with AI servers, marking a monumental stride into the Apple AI server market. Notably, these servers will be dispatched from Foxconn’s manufacturing facility in Vietnam, positioning it as a pivotal player in Taiwan’s burgeoning AI sector.

While Foxconn traditionally refrains from commenting on individual clients and order specifics, market insiders reveal that Foxconn is not only the foremost assembler of Apple iPhones but also a crucial supplier of data center servers. As Apple charges ahead in the realm of AI applications, necessitating heightened support from AI servers, Foxconn’s stronghold in the AI server market has positioned it as Apple’s preferred collaborator due to its longstanding partnership.

Insiders indicate that Apple’s directive has prompted Foxconn to exclusively ship AI servers to Apple via its subsidiary, Foxconn Industrial Internet (FII), stationed in Vietnam.

Market research firms report that Foxconn currently holds a substantial global server market share of approximately 43%. This prominence not only establishes Foxconn as a manufacturing leader but also as the primary supplier to Amazon, the global cloud services (CSP) frontrunner. Having already supplied AI servers for ChatGPT and NVIDIA, and with primary customer Google rapidly venturing into generative AI, along with Apple’s recent strategic foray, Foxconn is poised for a surge in server business orders.

Apple’s CEO, Tim Cook, recently confirmed Apple’s longstanding involvement in various AI technologies, including generative AI, while emphasizing the current surge of resources into AI development. With Apple’s R&D expenditure rising to $22.61 billion last quarter, experts speculate that a significant portion has been allocated to AI development.

Moreover, international sources report that Apple is discreetly crafting the “Ajax” large-scale language model, potentially heralding the arrival of the generative chatbot “SiriGPT” in the near future. With Apple’s vast user base across the globe, abundant data resources could pose a threat to rivals such as Google and Microsoft.

Industry pundits assert that Apple’s extensive global user feedback from devices like iPhones, iPads, and Macs, combined with the mature ecosystem of the App Store, endows it with a strategic advantage in AI application development. Swiftly advancing AI server and data center deployment could enable Apple to navigate the curve and surge ahead in this competitive race.

Foxconn’s Chairman previously expressed optimism in the growth potential of CSP and AI servers. With Foxconn’s server revenues reaching $1.1 trillion last year, the company’s status as a server manufacturing leader naturally aligns with this burgeoning demand. Industry estimates underscore the dramatic increase in Foxconn’s AI server-related orders, reaching several billion dollars. This positions Foxconn as the definitive victor in the current AI wave, solidifying its place at the forefront of global AI server leadership.

(Source: https://money.udn.com/money/story/5612/7351082)

According to the latest report from TrendForce, the primary factors influencing the global market share of notebook CPUs in 2024 can be categorized into “Architectural Design” and “Economic Factors.”

“Architectural Design” as a long-term factor affecting market share:

(1) Both AMD (AMD 3D V-Cache) and Intel (Intel Foveros Direct) may potentially integrate 3D packaging technology into notebook computers in the future.

(2) Apple’s M-series processors, using the Arm core architecture, as well as Intel processors, have adopted a big/little core hybrid design. AMD might also introduce this in the Ryzen 8000 series.

(3) Despite further advancements in processor technology by 2024, the notebook computer market remains highly sensitive to the cost for IT equipment.

“Economic Factors” as more immediate influencers of market share:

(1) Until 2024, a return to lower interest rates in the global economic environment could favor corporate expansion of capital expenditure. This could result in increased procurement of business-oriented notebook models, potentially allowing Intel to further expand its CPU market share beyond 70% in the business sector.

(2) Concerns about economic prospects among global citizens until 2024 could have significant negative implications for the consumer notebook computer market. With the restart of physical economic activities, the demand for consumer-oriented notebook models has declined from the high levels seen during the pandemic. Consequently, the consumer market demand outlook for 2024 remains uncertain. For AMD, which relies more on consumer market demand, changes in market share may be harder to predict compared to Intel.

In the post-pandemic era, AMD, Arm/Apple, and Intel are pursuing distinct technological competition strategies to capture market share in the personal computing market.

AMD:

(1) The Socket AM5 platform is poised to aid AMD CPUs in achieving substantial performance and efficiency gains.

(2) The AMD Ryzen 7040 incorporates an artificial intelligence engine to emphasize AI computing performance’s importance in the thin and light notebook market.

Arm/Apple:

(1) The M2 Ultra processor heralds Apple’s complete transition of personal computing products to the Arm core. Apple Mac computer products will no longer be sold with Intel processor.

(2) The Apple M-series processors, built on the Arm core architecture, facilitate a “fanless design” to maintain MacBook’s slim profile. This feature highlights its irreplaceable positioning in the portable notebook computer market, emphasizing portability.

Intel:

(1) With the waning trend of the “hybrid work mode,” Intel is optimistic about diversified development in the post-pandemic era for desktop computer products. This includes microcomputers, micro workstations, and general workstations. Due to the characteristic of continuous operation for 24 hours, desktop computers still possess unique attributes that cannot be replaced by notebook computers.

(Photo credit: Intel)

Taiwan’s leading panel manufacturer, AUO, is reportedly making a significant workforce reduction of around 200 employees. In response, AUO promptly issued a statement clarifying that these job cuts are part of a voluntary retirement initiative aligned with their flexible operational strategy. The company also announced the decision to shutter its C5D and C6C facilities located in the Tainan Science Park. These plants have been a primary hub for producing panels used in laptops, monitors, and televisions.

AUO emphasized that this strategic move is driven by a comprehensive evaluation of evolving market dynamics, terminal demand patterns, and the overarching supply-demand landscape. Embracing a flexible operational blueprint and a strong focus on emerging market technologies and high-value goods, AUO aims to ensure optimal efficiency and configuration across its manufacturing operations.

This decision comes after a five-month-long matchmaking program that was initiated following a capacity adjustment earlier this year. For employees who may be unwilling or unable to transition to other roles within the company, AUO is offering a voluntary retirement plan.

By concentrating their production planning and capacity allocation on other production lines, AUO seeks to enhance overall manufacturing capabilities and better adapt to market shifts. This strategic realignment highlights AUO’s commitment to navigating a swiftly evolving industry landscape while maintaining a competitive edge.

(Photo credit: AUO)

As we enter the second half of 2023, smartphone brands are eagerly launching their new devices, hoping to revitalize the market that is yet to fully recover. Among them, Samsung stands out with its ambitions to captivate consumers with flagship models while maintaining stability in the mid-to-low-end segment.

However, the Galaxy A and M series, targeting the mid-range to low-end market, have faced lackluster sales. To reverse this trend, Samsung is gearing up to unveil new devices in the coming months, including the highly anticipated Galaxy Fold/Flip5. This foldable flagship is seen as a game-changer that could drive up shipments in the latter part of the year.

The company’s flagship models, which encompass the Galaxy S and Fold/Flip series, account for about 20% of its total shipments. Within this segment, foldable devices contribute approximately 5% to the overall sales.

On the mid-tier front, Samsung is planning to introduce the S23FE series later this year, targeting the mid-range flagship market. Although the S23FE will feature a dual-platform of AP configuration, catering to different regional markets, it will be equipped with older-generation processors. As a result, its potential to significantly boost sales might be limited. According to TrendForce’s estimate, the total production and shipment of the S23FE series are expected to be less than 1.5 million units by the end of 2023.

A comprehensive view of Samsung’s strategy reveals that the second half of 2023 will be driven by the flagship Fold/Flip and FE series. Despite the company’s efforts, the overall performance will still be influenced by the prevailing economic conditions, posing significant challenges.

Notably, the decision to unveil the FE series in the fourth quarter marks a strategic departure from the previous year’s delay of the S21FE until the following year’s first quarter. This move by Samsung demonstrates a strong commitment to address the market gap resulting from the absence of the A7x series mid-range models. By positioning the mid-tier flagship as a compelling marketing point, Samsung aims to entice consumers to upgrade their devices, potentially bolstering the company’s sales and maintaining a robust presence in the highly competitive smartphone market.

DRAM Spot Market:

Continuing from the previous week, the influx of used chips that were stripped from decommissioned server DRAM modules is still causing spot prices of DDR4 products to drop. As for DDR5 products, there is no such issue affecting their supply. However, module houses are holding a high level of inventory for DDR5 products because they stocked up aggressively in 2Q23, while the actual demand remains in a slump. Hence, spot prices on the whole have kept falling. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666 MT/s) dropped by 0.74% from US$1.479 last week to US$1.468 this week.

NAND Flash Spot Market:

The spot market has been lingering at sluggish transactions since July under feeble inquiries between market participants. Fortunately, the reduction of spot prices has somewhat mitigated over the past two weeks due to suppliers’ continuous intention in an on-going production cut and price increment. Certain components have not seen a further drop in prices after a consolidation at the low end, though the level of transactions remains at a rather insignificant extent, and the continuity of purchases will require further observations. 512Gb TLC wafer spots have risen by 1.21% this week, arriving at US$1.421.