TV panel prices have been on a continuous rise from the bottom of the first quarter to the second quarter, surpassing cash costs. Panel manufacturers are determined to reverse their losses and maintain a strong stance on price hikes. They are also adjusting production rates to maintain the supply-demand balance. However, the demand side indicates a slowdown as the Chinese e-commerce sale season has completed its stocking, and a significant surge in demand is expected to occur in the third quarter. As a result, the overall demand momentum is currently leveling off. Consequently, this month’s price increases for TV panels are expected to show a slight convergence.

Some panel manufacturers are actively increasing monitor panel prices after a period of stability. The prices of Open Cell panel products were previously too low, allowing room for further price increases. This month, prices are expected to rise by USD 0.2~0.5. However, the trend for panel module products is less clear due to varying attitudes toward price hikes among manufacturers, especially newer entrants trying to secure orders with lower prices. As a result, mainstream panel sizes like 23.8 inches and 27 inches are expected to remain mostly unchanged in price this month.

Notebook panel prices have remained stable despite a pricing struggle between brand customers and manufacturers. Demand is steadily increasing, leading panel manufacturers to consider price hikes. However, brand customers are hesitant due to uncertain prospects in the coming months. While there is growth in demand, it is mainly driven by inventory restocking rather than additional demand. As a result, panel prices are expected to stay flat this month, with little room for increases until the end of Q2.

Recently, there has been news of collaboration between NVIDIA and MediaTek. Speculation suggests that the future collaboration may extend to smartphone SoCs, allowing MediaTek to enhance the graphical computing and AI performance of Dimensity smartphone SoCs through NVIDIA’s GPU technology licensing.

Currently, the focus of this collaboration is primarily on NB SoC development, with some progress in the automotive-related chip sector. As for the scope of smartphone SoC collaboration, it is still under discussion, but the potential for related partnerships is worth noting.

In the announced collaboration between NVIDIA and MediaTek for the NB SoC products, MediaTek is mainly responsible for CPU, while other part such as GPU, DSP, ISP, and interface IP are provided by NVIDIA or external partners. NVIDIA holds the leadership position, while MediaTek plays a supporting role in this collaboration.

Regarding the industry’s speculation about possible collaboration in smartphone SoC development, it is estimated that MediaTek will take the lead in the design. Therefore, it is necessary to explore the motivations behind MediaTek’s adoption of related technologies.

Firstly, since the era of the Arm V9 instruction set, Arm’s reference GPU, Immortalis, has incorporated ray tracing functionality, assisting MediaTek’s flagship SoCs in improving gaming performance. This indicates that optimizing gaming scenarios is a key development focus for SoC manufacturers.

However, for high-end gaming applications, the current GPU performance of smartphone SoCs still cannot maintain high frame rates and native resolutions during gameplay. While selecting a pure core stacking approach to improve computational power is effective, it puts pressure on device power consumption. In light of this, Qualcomm introduced Snapdragon Game Super Resolution (GSR) technology this year, which simultaneously reduces power consumption and enhances game graphics quality. MediaTek has not yet explored this technology, and Arm Immortalis has not been released. Therefore, when it comes to GPU performance computing, MediaTek has incentives to seek external collaborations.

Furthermore, with the rapid upgrading of GPUs on smartphone SoCs, PC-level games are now being introduced to smartphones, and industry players are promoting compatibility with graphics APIs, opening doors for NVIDIA, AMD, and even Intel to enter the mobile gaming market. Samsung has partnered with AMD for its Exynos SoC GPU, while NVIDIA, with similar technology to Qualcomm Snapdragon GSR, becomes a logical choice as a cooperation partner for MediaTek.

TrendForce believes that if MediaTek integrates NVIDIA GPUs into Dimensity SoCs and leverages TSMC’s process power efficiency advantages, it could bring a new wave of excitement to MediaTek in the flagship or gaming device market, attracting consumer interest. However, despite the potential technical benefits of collaboration, considering the influence of geopolitical factors, MediaTek, which primarily sells its smartphone SoCs to Chinese customers, may ultimately abandon this collaboration option due to related policy risks.

According to the latest weekly memory spot prices published by TrendForce, the spot prices of DDR5 chips have returned to a downward trend, resulting in no signs of recovery in overall spot prices. For more details, please refer to the information below:

DRAM Spot Market:
Spot prices of DDR5 chips have swung down again, and spot prices of DDR4 and DDR3 products continue to register incremental declines on a daily basis. The spot market on the whole has yet to show signs of a price rebound. Lately, some buyers have been seeking quotes for small-quantity orders, but this kind of demand does not generate a sufficient momentum to expand the overall transaction volume. Presently, most traders generally believe that spot prices are almost at the bottom, but they remain passive in stocking up because the demand outlook is quite negative. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) fell by 0.97% from US$1.543 last week to US$1.528 this week.

NAND Flash Spot Market:
It is now a consensus within the market that prices are no longer able to drop further amidst the manifestation of efficacy from the diminished provision among suppliers. Spot prices are now starting to stabilize on the whole despite transactions having yet to magnify accordingly. 512Gb TLC wafer has dropped by 0.49% this week, arriving at US$1.420.

Tesla, the driving force behind the next-generation electric vehicle(EV) battery standards, has been vigorously promoting the 46800 cylindrical battery cell in recent years.

Being Tesla’s key collaborator, Panasonic had initially scheduled mass production of these batteries for April this year. However, in a recent announcement, they revealed that their production plans would be delayed by at least a year, with full-scale production not set to kick off until between April and September 2024.

This strategic pivot is aimed at optimizing performance, but what we care about is the implications it might hold for the EV supply chain – could this mean that the strong alliance between these two giants is beginning to waver? And if so, what sort of ripple effect could this have on the relevant market?

Tesla’s secret weapon in the EV price war

Given the capacity of 46800 battery cell is five times that of the 21700 battery, it means fewer cells are required to achieve the same total battery pack capacity.

For instance, a 75kWh-based Model 3 uses 4,416 units of the 21700 battery cells packed in the traditional way of Cell to Module (CTM), which assembles batteries into modules which are then encased into a battery pack and then fitted onto the vehicle’s chassis.

In contrast, a Model Y with the same battery capacity would need only 828 units of the 46800 battery cells, leading to a 14% saving on battery costs. Coupled with Tesla’s integrated chassis technology (CTC), where batteries are not assembled into modules but instead directly encapsulated under the cabin floor, this provides an ultimate, cost-effective solution for Tesla.

When Tesla first announced its 46800 battery plan in 2020, its battery capacity was pioneering among all batteries. Taking advantage of this favorable environment, Tesla has been both expanding their production and involving cylindrical battery manufacturers, like Panasonic, in their comprehensive plans.

Tesla has set up a 46800 battery production line at their Fremont factory in California. As of the end of 2022, their production capacity was about 4GWh, which can only support 50,000 to 60,000 75kWh EVs and is far from their sales volume.

In terms of a long-term strategy, Tesla not only aims to ramp up their production capacity but is also heavily reliant on external suppliers like Panasonic to support its ever-growing demand.

Hence, ever since the launch of Model S in 2012, Panasonic has remained Tesla’s primary supplier of power batteries. And thanks to Tesla’s booming sales, Panasonic has dominated the power battery market for quite a while.

Roadblocks for Tesla and Panasonic’s Alliance

So, what does Panasonic’s delay mean for its position in the market? In fact, as an important chess piece in Tesla’s battery market strategy, Panasonic has been under considerable pressure.

Externally, there’s the relentless price cuts from Tesla. In 2018, as Tesla’s sales skyrocketed, they started purchasing batteries from more suppliers, thereby indirectly pressuring Panasonic to lower prices.

In addition, the internal discord has also been shadowing the project. On one hand, the long-term supply to Tesla has not brought as impressive profit performance as anticipated for Panasonic’s battery business. On the other hand, sticking to Tesla’s technology route, Panasonic has missed a great deal of opportunities to partner with Japanese car makers due to its conservative investments in the mainstream hydrogen energy batteries, which has in turn stirred internal questioning.

Since 2020, both South LGES and CATL have become suppliers to Tesla, causing Panasonic’s market share to fall to third place globally. But even then, Panasonic’s many years of expertise in cylindrical batteries made it Tesla’s Top choice when deciding to manufacture the 46800 battery. This was widely seen as Panasonic’s best chance to regain its leading ground and to solidify long-term partnership with Tesla.

Is Panasonic about to miss out on its prime opportunity?

All in all, we believe that this delay could not only disrupt Tesla’s price war strategy but also make Panasonic miss the golden chance to secure its dominance in the new technology. With multiple battery manufacturers, such as CATL, LGES, and Eve Energy, announcing that they will start mass production of the 46800 battery in 2024 or 2025, Panasonic will face unprecedented competition.

As of Q1 2023, Panasonic has seen its market share fall to fourth place. Obviously, maintaining its industry leadership becomes more of a daunting task for the company in the race. Although they’ve announced plans to build at least two 46800 battery factories in North America, it won’t serve as a panacea for their problems.

Beyond overcoming technical hurdles and expediting mass production, Panasonic also has a mountain to climb in terms of diversifying its customer base, further lessening the risk of an over-reliance on Tesla. These are inevitably long-term challenges that Panasonic cannot sidestep.

ChatGPT’s debut has sparked a thrilling spec upgrade in the server market, which has breathed new life into the supply chain and unlocked unparalleled business opportunities. Amidst all this, the big winners look set to be the suppliers of ABF (Ajinomoto Build-up Film) substrates, who are poised to reap enormous benefits.

In the previous article, “AI Sparks a Revolution Up In the Cloud,” we explored how the surge in data volumes is driving the spec of AI servers as well as the cost issue that comes with it. This time around, we’ll take a closer look at the crucial GPU and CPU platforms, focusing on how they can transform the ABF substrate market.

NVIDIA’s Dual-Track AI Server Chip Strategy Fuels ABF Consumption

In response to the vast data demands of fast-evolving AI servers, NVIDIA is leading the pack in defining the industry-standard specs.

This contrasts with standard GPU servers, where one CPU backs 2 to 6 GPUs. Instead, NVIDIA’s AI servers, geared towards DL(Deep Learning) and ML(Machine Learning), typically support 2 CPUs and 4 to 8 GPUs, thus doubling the ABF substrate usage compared to conventional GPU servers.

NVIDIA has devised a dual-track chip strategy, tailoring their offerings for international and Chinese markets. The primary chip for ChatGPT is NVIDIA’s A100. However, for China, in line with U.S. export regulations, they’ve introduced the A800 chip, reducing interconnect speeds from 600GBps (as on the A100) to 400GBps.

Their latest H100 GPU chip, manufactured at TSMC’s 4nm process, boasts an AI training performance 9 times greater than its A100 predecessor and inferencing power that’s 30 times higher. To match the new H100, H800 was also released with an interconnect speed capped at 300GBps. Notably, Baidu’s pioneering AI model, Wenxin, employs the A800 chip.

To stay competitive globally in AI, Chinese manufacturers are expected to aim for the computational prowess on par with the H100 and A100 by integrating more A800 and H800 chips. This move will boost the overall ABF substrate consumption.

With the ChatBot boom, it is predicted a 38.4% YoY increase in 2023’s AI server shipments and a robust CAGR of 22% from 2022 to 2026 – significantly outpacing the typical single-digit server growth, according to TrendForce’s prediction.

AMD, Intel Server Platforms Drive ABF Substrate Demand

Meanwhile, examining AMD and Intel’s high-end server platforms, we can observe how spec upgrades are propelling ABF substrate consumption forward.

• AMD Zen 4:

Since 2019, AMD’s EPYC Zen 2 server processors have used Chiplet multi-chip packaging, which due to its higher conductivity and cooling demands, has consistently bolstered ABF substrate demand.

• Intel Eagle Stream:

Intel’s advanced Eagle Stream Sapphire Rapids platform boasts 40-50% higher computation speed than its predecessor, the Whitley, and supports PCIe5, which triggers a 20% uptick in substrate layers. This platform employs Intel’s 2.5D EMIB tech and Silicon Bridge, integrating various chips to minimize signal transmission time.

The Sapphire Rapids lineup includes SPR XCC and the more advanced SPR HBM, with the latter’s ABF substrate area being 30% larger than the previous generation’s. The incorporation of EMIB’s Silicon Bridge within the ABF substrate increases lamination complexity and reduces overall yield. Simply put, for every 1% increase in Eagle Stream’s server market penetration, ABF substrate demand is projected to rise by 2%.

As the upgrades for server-grade ABF substrates continue to advance, production complexity, layer count, and area all increase correspondingly. This implies that the average yield rate might decrease from 60-70% to 40-50%. Therefore, the actual ABF substrate capacity required for future server CPU platforms will likely be more than double that of previous generations.

ABF Substrate Suppliers Riding the Tide

By our estimates, the global ABF substrate market size is set to grow from $9.3 billion in 2023 to $15 billion in 2026 – a CAGR of 17%, underscoring the tremendous growth and ongoing investment potential in the ABF supply chain.

Currently, Taiwanese and Japanese manufacturers cover about 80% of the global ABF substrate capacity. Major players like Japan’s Ibiden, Shinko and AT&S, along with Taiwan’s Unimicron, Nan Ya, and Kinsus all consider expanding their ABF substrate production capabilities as a long-term strategy.

As we analyzed in another piece, “Chiplet Design: A Real Game-Changer for Substrates,” despite the recent economic headwinds, capacity expansion of ABF substrate can still be seen as a solid trend, which is secured by the robust growth of high-end servers. Hence, the ability to precisely forecast capacity needs and simultaneously improve production yields will be the key to competitiveness for all substrate suppliers.

Read more:

• HBM Supply Leader SK Hynix’s Market Share to Exceed 50% in 2023 Due to Demand for AI Servers, Says TrendForce
• Shipments of AI Servers Will Climb at CAGR of 10.8% from 2022 to 2026, Says TrendForce

(Photo Credit: Google)