The demand situation of the global car market deteriorated in 2022 due to the impacts of the Russia-Ukraine military conflict and the ongoing COVID-19 outbreaks across China. However, the demand for automotive lighting products during the same year was propped up by two developments. First, the penetration rate of LED headlights (headlamps) rose further. Second, there were significant advances in technologies related to smart headlights, marker lights (lamps), and smart ambient lights.

Furthermore, costs surged for plastics during 2022, so suppliers for automotive lighting products had the opportunity to keep their prices steady or raise them. Hence, TrendForce estimates that the value of the global market for automotive lighting products has come to US$32.68 billion for 2022, reflecting a YoY growth of 4%.

Looking ahead, development trends in the automotive lighting market include personalized products, communication displays, solutions for ADAS, and improvements related to safety functions. TrendForce currently forecasts that the market value will scale up to US$34.314 billion for 2023, showing a YoY growth of 5%.

In addition to improvements in adaptive headlights and tail lights (lamps), TrendForce points to several other product categories that have gained greater importance and captured the attention of carmakers, automotive lighting suppliers, LED suppliers, and drive IC suppliers. Examples include marker lights, (smart) ambient lights, and solutions for light-signaling projection. The aforementioned market participants have been proactively developing offerings under these categories. Going forward, carmakers will continue to bring surprising and innovative ideas to the development of automotive lighting. This, in conjunction with the promotion of ADAS and automotive driving technologies, will create limitless market potential for automotive lighting suppliers.

TrendForce, the independent new energy research agency, forecasts that capacity for 210mm products will reach 57% in 2023. The penetration of 600W+ high-power modules is clearly accelerating, setting a distinct direction for both the industry chain and market.

As technology iteration is an essential force in driving industry development, an increasing number of module makers are now producing 210mm modules, marching into the 600W+ era.

More than 80% of module makers deploy 210mm technology as 600W+ high-power modules become a global standard

The 600W+ is now dominating major PV exhibitions around the world. 75% of the 600W+ products showcased by mainstream module makers at RE+2022 were fitted with 210mm wafers, demonstrating the advantage of the 210mm technology, and 30 companies had more than 40 600W products on display at Intersolar South America at the end of August. A similar pattern was seen at Intersolar Europe and SNEC.

According to TrendForce, more than 52 module makers (>80%) worldwide can now produce 210mm products. As indicated by TrendForce, capacity of large-sized modules has continued to expand this year, and new capacity is compatible with sizes of up to 210mm. Because of the extensive compatibility of 210mm cell and module technology, cutting-edge technologies such as TOPCon and HJT could be adopted, and module power output is likely to reach 700W+ soon.

Trina Solar, as the first mover of 210mm modules, recently put 210mm n-type capacity into mass production, reinforcing the company’s competitiveness with next-generation n-type cell technology. The refinement in 210mm products and n-type technology will further improve efficiency and cut costs.

Accumulated shipment of 210mm modules reached 50GW in first nine months of 2022

The production of 210mm modules is growing rapidly as the downstream high-power module market flourishes. In the first nine months of the year 50GW of 210mm cell modules were shipped. More than 76GW of such modules has been shipped as of third quarter 2022, and shipments were expected to accelerate in the last three months of 2022.

210mm module capacity to reach 57% by 2023

As indicated by TrendForce, large-sized modules (182mm and 210mm) are estimated to account for 512GW of capacity during 2022 at a ratio of 83%, of which 210mm capacity accounts for 287GW at 46%, representing year-on-year growth of 16%. Large-sized modules (182mm and 210mm), with their successive completion in capacity deployment next year, will occupy 89% of ratio then, and 210mm modules are likely to dominate, with estimated capacity of 466GW at 57%.

TrendForce forecasts that capacity of 210mm modules will continue to surge in 2023 and reach 66.04% by 2025, when 182mm module capacity will fall to 30%. In terms of wafers and cells, shipments of large-sized variations will continue to climb and dominate the market. New highs in global shipments of 210mm can be expected in the near future.

600W+ modules supreme in all-scenario for both utility and non-utility plants

High-power modules are widely used because of their superior LCOE and BOS costs. According to TrendForce, 600W+ high-power modules are becoming the trend in power stations, with 210mm technology seen as the first choice in making their 600W+ modules, which can reduce LCOE by up to 4.1%.

600W+ modules are yielding compatible solutions by adapting to different installation environments and projects that include ground-mounted power stations and distributed settings.

600W+ high-power modules lead the way as they deliver low LCOE

Low LCOE has been an ultimate target for the industry chain, and 600W+ modules that are equipped with high power, high efficiency, high energy yield, and high reliability can effectively reduce LCOE. Comparing 600W+ modules and 500W+ modules, the former have increased power output by 125-130W and increased module efficiency by 0.3-0.5%. 600W+ modules are also superior in energy yield, evidenced in test by their increase of 1.51~2.1% in single watt power generation. In addition, in five rigorous tests, 600W+ modules were proven to retain their highly reliable performance even in extreme climates.

Trina Solar, a pioneer in 210mm cell technology, has demonstrated to the market its solid strength and capability in the 600W+ field. As of third quarter 2022, Trina Solar has shipped 40GW 210mm modules, ranking first in the industry, with a total of 120GW of global modules shipments since its foundation.

According to TrendForce’s latest research, global NB shipments are forecasted to drop by 5.8% YoY to around 177 million units. However, the downtrend in NB shipments is starting to moderate, and the projected figure for 2023 is expected to represent the lowest point before 2025. Currently, inventory corrections for components and whole devices are taking place in the global supply chain for NBs. Prices are also being cut substantially across sales channels, and PC OEMs have scaled back component procurements. There is a chance that the NB market will return to its usual cyclical pattern and show growth during 2H23, when back-to-school and holiday-related promotions are expected to boost device sales.

However, this scenario will depend on two factors. First, PC OEMs will have been able to effectively get rid of the existing stock of NBs belonging to the older generations during 1H23. Second, global inflation will ease as 2023 progresses. Currently, the IMF forecasts that the rate of global inflation will slide down to 6.5% in 2023, compared with 8.8% in 2023. Such development will help raise the consumer spending related to electronics. All in all, notable inventory corrections and the reduction of inflationary pressure will allow the NB market to leave the gloomy situation of 2022 and get back to upbeat state of quarter-to-quarter shipment growth.

Market Segments for Commercial and Consumer NBs Will Both See Decline in 2023, Chromebooks, Gaming NBs, and Creator NBs Will Become Main Demand Drivers

Looking at the various segments of the NB market, unit shipments and market share are expected to drop for both commercial NBs and consumer NBs. Conversely, Chromebooks will grow in terms of shipments and market share despite various headwinds. In 1H23, mature regional markets such as the US and emerging regional markets such as Indonesia and India will be releasing tenders for Chromebook for educational uses. Turning to gaming NBs, their global shipments are forecasted to increase by 8.3% YoY to 17.45 million units for 2023 thanks to the seasonal demand surge in 2H23. As for creator NBs, the market for them is growing because professional content creators want to purchase a “mobile workstation” in place of a high-end gaming NB for tasks such as building 3D models and processing large amounts of multimedia files. Global shipments of creator NBs are forecasted to rise by 24.9% YoY to around 437,000 units for 2023.

(Note: “NB” stands for notebook or laptop computer.)

On December 6, TSMC held a ceremony for the first tool-in of its new Arizona fab. This event came after the foundry giant had publicized a series of overseas expansion projects. Within Taiwan, TSMC’s recent announcements have caused a stir in public opinion. Concerns have been raised about the possibility of a hollowing out of the island’s semiconductor industry due to a mass exodus of professionals involved in chip manufacturing.

TSMC’s Overseas Expansion Plan

TSMC actually embarked on the path to internationalize its business operations much earlier in 2015, when it made the announcement to build a fab in Nanjing, Mainland China. At that time, the chief reason behind this expansion project was that Huawei had become the second most important client next to Apple. Also, TSMC planned to have its 16nm node serve as the main manufacturing technology of the Nanjing fab. This decision was in line with the semiconductor technology export rules enforced by Taiwan’s Ministry of Economic Affairs. Specifically, domestic chipmakers are only allowed to deploy “n-1” technologies at overseas manufacturing sites. Despite being in compliance with all domestic laws and regulations, TSMC still attracted a lot of controversies with establishing a base of operation in Mainland China, and there were speculations that more advanced semiconductor technologies will be leaving Taiwan with the “westward expansion”.

Fast-forward to present day, China is not the only one that is focusing on the development of a homegrown semiconductor industry. After witnessing the impact of the COVID-19 pandemic on the global supply chain, many other countries are reconsidering the importance of semiconductor supply in their own industries. From the US to Japan and European countries, governments have begun to offer various subsidies and market-based incentives in order to entice major semiconductor manufacturers such as TSMC to build fabs in their territories.

A detailed survey of TSMC’s overseas expansion activities from 2015 onwards finds that the construction of the Nanjing fab commenced in 2016 a year after the announcement of the project. The fab then celebrated the formal start of mass production with a ceremony in 2018. Two years later, in 2020, TSMC revealed the plan to build a 12-inch wafer fab that deploys advanced nodes in Arizona. Moving into 2021, the foundry giant unveiled two more expansion projects in Japan. The plan to open a “3D IC material R&D center” in Tsukuba (Ibaraki Prefecture) was announced first. Later in October of that same year, TSMC said it will set up a fab in Kumamoto.

Where Will TSMC Go After US?

Regarding the locations of TSMC’s fabs worldwide, TrendForce’s latest research reveals that for 12-inch wafer foundry, TSMC has four fabs in Taiwan, including including two upcoming greenfield projects respectively located in Hsinchu and Kaohsiung. Outside Taiwan, TSMC has one operational 12-inch wafer fabs in Mainland China and two more under construction in the US and Japan. Besides these existing and planned fabs, a close eye is also being kept on TSMC’s possible expansion into the EU states. Germany has long been rumored to be TSMC’s candidate for setting up a fab in Europe. However, Ireland has a lot of potential as well since Intel previously announced its intention to expand its existing manufacturing operation in this country. Currently, TSMC is internally assessing the feasibility of landing a project in Ireland.

Taiwan Still Has Advantages in Talents, Business Culture, and Complete Industry Ecosystem

Going back to the issue of whether TSMC’s overseas expansion activities will negatively affect Taiwan’s semiconductor industry by causing an outward migration of related professionals or a weakening of the industry’s competitive advantage. According to TrendForce analyst Joanne Chiao, the deglobalization trend is gradually emerging in the supply-demand dynamics of the semiconductor market. Based on the latest data, the geographical distribution of TSMC’s production capacity (that is calculated in thousands of 12-inch wafer equivalents per month) for 2022 is estimated as follows: 93% in Taiwan, about 6% in Mainland China, and 1% in the US. The short-term effects of TSMC’s overseas projects will thus be very limited as the majority share of the foundry’s production capacity is going to stay in Taiwan.

As for the effects on the competitiveness of the domestic semiconductor industry in the long run, Chiao believes that deglobalization will lead to a general rise in operating costs for foundries worldwide. This means that every foundry will be facing increasing pressure related to pricing regardless of where they put their fabs. On the other hand, Taiwan’s importance as the world’s main chip production base will diminish somewhat over time because of the deglobalization trend.

Nevertheless, the foundry industry depends on tight relations with clients as well as highly synchronized and meticulous services among all participants across the supply chain. This is where Taiwan shines because the island is home to a complete ecosystem for the foundry industry. All participants in this ecosystem advance together when it comes to upgrading technological capabilities or overcoming technological bottlenecks. Apart from these advantages, a system of management has been well established on the island for the various aspects of fab operation. As foundries keep their fabs running 24/7, they are constantly tested in manpower scheduling. Therefore, they have to rely on locally cultivated talents and local experience that have taken decades to amass. In other words, fabs in Taiwan are performing at the highest level because of the local business and work culture.

（Image credit: TSMC Linkedin）

Due to persistent production constraints in 2H22, TrendForce estimates that global car sales will reach 81.1 million units for 2022, showing either a mostly flat growth or small decline from 2021. Regarding 2023, the shortage of automotive semiconductor components will ease in the first half of the year, and carmakers will be ramping up production in order to reduce the pile of backlogged orders. However, the global economic environment is expected to remain challenging, so global car sales for that year are now forecasted to increase marginally by 3.7% YoY to 84.2 million units. On the whole, car production is not expected to return to the pre-pandemic level before 2025.

NEV Sales Will Rise to 14.2 Million Units for 2023

Looking at the entire global electric car market, vehicle sales are projected to grow by 43% YoY to 13.6 million units for 2022. Sales of new energy vehicles (NEVs) are projected to rise by 55% YoY to 10.1 million units for 2022 and will then climb to 19.4 million units for 2023. NEVs as a category does not include hybrid electric vehicles (HEVs) that still have an internal combustion engine. The trend of vehicle electrification continues across many regional markets. However, countries have different policies for supporting electric cars because they vary with respect to the progress made in the development of electric cars and related infrastructure. China and some European countries have already enter the phase where subsidy support for purchasing an electric car are being gradually reduced or eliminated. Conversely, the US and other emerging markets are expanding subsidy support.

Safety Functions Required Under EU’s New General Safety Regulation Will Become Mandatory in 2024 and 2026

To ensure safe operation for new types of vehicles that are entering the European market, the New General Safety Regulation (EU) 2019/2144 finally came into force this July. This regulatory framework mandates that all on-road vehicles will conform to a set of new specification requirements and enhanced safety standards. The application of the rules under the regulatory framework will be implemented over successive phases. Many advanced safety functions will be made mandatory in 2024 and 2026. This, in turn, will help generate the demand for automotive cameras (located inside and outside of a vehicle), sensors (e.g., LiDAR), networking components, and data recording solutions. All in all, the New General Safety Regulation is worth the attention of suppliers for automotive technologies. The rules under this framework also serve as a useful reference for other countries that are developing similar policies and laws.

Commercialization of Autonomous Vehicles Is Growing in Importance

Investments in the development of autonomous vehicles can only be sustained if cases of their commercialization start to appear. Hence, robotaxi companies are searching for feasible ways to commercialize their services and create a viable business model. Chinese robotaxi companies, for example, are enhancing the controllability of the traffic environment, reducing the unit cost of vehicles, and hooking up with ride-hailing platforms. TrendForce believes Mainland China will continue to be the fastest-growing regional market for robotaxi services in 2023.

（Image credit: Tesla Linkedin）