Australian mining company, Liontown Resources Ltd., has just announced it’s agreed to a buyout proposal of AUD 6.6 billion (USD 4.3 billion) by US lithium producer Albemarle Corp (ALB). TrendForce’s latest “2023 Global Li-Ion Battery Industry Chain Market Supply and Demand Report,” indicates that global lithium production in 2022 hit approximately 860,000 tons of Lithium Carbonate Equivalent (LCE). ALB, with its diverse lithium portfolio (spodumene, lithium salt, and tolling), accounted for over 180,000 tons of LCE. Predictions for 2023 spotlight a global lithium production reaching 1.21 million tons LCE, and ALB is set to churn out 200,000 tons of that, holding firmly onto the lead with its 17% market share.

TrendForce reports that ALB has strategically secured the planet’s most abundant, high-quality, and cost-efficient reserves of lithium salt lake and minerals across regions like Chile, Australia, and the US. Moreover, when it comes to lithium refinement, ALB emerges as the global titan with the world’s greatest lithium salt production capacity. As it stands, ALB’s annual production capacity for lithium hydroxide reaches 110,000 tons, accounting for 23% of the world’s entire production.

Liontown, a key supplier of Australia’s battery minerals, holds the reins to two major hard rock lithium deposits: Kathleen Valley and Buldania. These areas boast lithium reserves of 156 million tons (5.4 million tons LCE) and 14.9 million tons (370,000 tons LCE), respectively. As Kathleen Valley gears up for completion by the end of 2023, its inaugural production phase is set to roll out by 2Q24, targeting an annual yield of 500,000 tons of lithium spodumene concentrate. And that’s just the start, with plans to elevate this figure to a whopping 700,000 tons annually. On the other hand, the Buldania project is still in its nascent stage, focused on exploration and surveying.

With ambitions to acquire Australian miner Liontown, ALB set to command the world’s largest lithium resources, TrendForce believes.

Should ALB’s acquisition of Liontown materialize, it would cement its control of global lithium resources and bolster its lithium salt production framework. Yet, ALB isn’t the sole player in this vast industry. Major lithium producers, including SQM, Tianqi Lithium, Ganfeng Lithium, Yahua Industrial, Chengxin Lithium, and Livent, are fervently ramping up their production capabilities in lithium carbonate and lithium hydroxide.

Lithium, the backbone of modern tech, is set to see its global demand skyrocket. TrendForce’s insights reveal a bustling 2022 with around 40 lithium mining projects worldwide. After 2025, the number of projects in production will increase to a staggering 100+. To safeguard their global dominance and sharpen their competitive edge, lithium chemical producers are strategically aligning with upstream lithium miners to secure lithium resources. Case in point: Livent’s recent merger with Allkem in May of this year and ALB’s designs on Liontown. This momentum signifies a trend toward a more consolidated global lithium resource landscape, with mergers and acquisitions becoming the norm in upcoming years.

According to a report by Taiwan’s Central News Agency, the Apple iPhone 15 series has made its debut, and analysts have examined the supply chain, highlighting the increasing penetration of Chinese manufacturers in key components such as packaging modules, back glass, batteries, USB-C ports, acoustic components, wireless charging, and assembly. The role of Chinese manufacturers in critical optical components, including prisms, is particularly noteworthy.

Apple recently unveiled the iPhone 15 series, drawing market attention to the status of component suppliers, especially the progress made by Chinese manufacturers in optical key components. The top-tier iPhone 15 Pro Max features a tetraprism design in its telephoto camera. Ming-Chi Kuo, an analyst at TF International Securities, pointed out that this prism is a key component used for the first time in Apple’s iPhones. He speculates that the prism may be primarily supplied by China’s Lante Optics, with Crystal-Optech possibly being the second supplier.

In the realm of camera lenses, both reports from Japanese securities and Ming-Chi Kuo suggest that China’s Cowell may enter the supply chain for the front camera modules of the iPhone 15 series. Analysts also speculate that China’s Sunny Optical Technology may join the supply chain for camera lens components in the iPhone 15 series.

Regarding semiconductor packaging, while the system-in-package (SiP) modules for the iPhone 15 series are still primarily supplied by USI under the ASE Group, analysts anticipate that China’s JCET Group and Luxshare Precision will also enter the supply chain for SiP modules.

In the realm of back glass, the market generally expects that Lens Tech and Biel Crystal will remain the only two suppliers. In terms of acoustic components, GoerTek Acoustics is expected to provide a significant portion of the supply.

Analyzing the battery sector, reports from Japanese securities reports indicate that China’s Desay and Sunwoda are entering the supply chain for battery packaging in the iPhone 15 series.

Additionally, Luxshare Precision’s position in the supply chain for the iPhone 15 series cannot be underestimated. Analysts suggest that Luxshare has entered the assembly subcontracting supply chain for the iPhone 15, iPhone 15 Plus, and the top-tier iPhone 15 Pro Max. Some analysts estimate that Luxshare’s overall assembly share in the iPhone 15 series has increased to 28% to 30%, trailing only behind Hon Hai Precision Industry Group’s share of 58% to 60%.

Furthermore, analysts also point out that Luxshare has ventured into components such as wireless charging modules, USB-C ports and cables, as well as haptic technology elements in the iPhone 15 series.

Report to China Times, due to the declining cost of batteries, by 2024, the prices of electric vehicles (EVs) in Europe will be on par with those of gasoline-powered cars, while the American market will have to wait until 2026. Furthermore, it’s projected that by 2030, two-thirds of all cars sold globally will be electric vehicles.

A report released on the 14th by the non-profit organization Rocky Mountain Institute (RMI) predicts that battery costs will be cut in half over the next decade. This reduction will bring the cost of batteries down from $151 per kilowatt-hour (kWh) in 2022 to a range between USD 60~90.

According to TrendForce, in 1H23, the total sales of new energy vehicles (NEVs, including BEV, PHEV, FCEV), including pure electric vehicles, plug-in hybrid electric vehicles, and hydrogen fuel cell vehicles, reached 5.462 million units, by YoY of 33.6%. Specifically, NEV sales in the second quarter amounted to 3.03 million units, up 42.8% YoY, and accounting for 14.4% of the overall automobile sales in the second quarter.

Price-wise, TrendForce believes that when the cost of pure electric cars falls below approximately USD100 per kWh, there will be an opportunity to compete with gasoline cars.

By 2030, electric vehicle prices will finally match those of gasoline cars. The high cost of EV batteries, which accounts for approximately 40% of the price of electric cars, has been a barrier preventing many consumers from affording electric vehicles. RMI points out that automakers are investing in the development of new battery chemistries, materials, and software to improve electric vehicle efficiency, gradually driving down both battery and electric vehicle prices. RMI analysts suggest that as electric vehicles rapidly grow in popularity in Europe and China, EV sales could increase at least six times by 2030, with a global market share of 62~86%.

(Source: https://www.ctee.com.tw/news/20230915700374-430704)

According to the news from Taiwan media, CNA, Huawei has broken through the U.S. blockade and launched a 5G smartphone equipped with domestically produced Chinese chips, sparking discussions. Huawei stated that although Chinese-made chips lag behind foreign counterparts, if they are not used, staying behind will always be a setback. If widely adopted, it could drive technological progress and catch up gradually.

According to reports from Chinese media Yicai, representatives from Huawei made these remarks during a speech at the “2023 World Computing Conference” on the 15th.

Huawei mentioned that the computing industry includes PCs, servers, operating systems, databases, as well as processors, memory modules, SSDs, HDDs, network cards, RAID cards, SSD controllers, network chipsets, and RAID card chipsets that constitute PCs and servers, which are the most critical problems to solve.

“We couldn’t even make LOM and RAID cards before, and we couldn’t even create a PMIC for a server. So, we need to return to the basics of the computing industry.”

Huawei believes that China needs to develop its own processors, operating systems, and databases. If all of these are sourced from external suppliers, there is a risk of information breaches through backdoors and vulnerabilities in PCs and servers. It could also be exploited as a means of attacking other servers and PCs.

“If our opponent is at an expert level, even though we have domestically produced products, we are still at a basic level, making it relatively easy to attack and steal information”. Huawei emphasizes that domestic production does not necessarily equate to security; only by enhancing capabilities can genuine security be achieved.

“There are currently more than 600 Chinese enterprises listed on the U.S. government’s entity list,” said Huawei’s representative, covering chips, hardware, software, algorithms, and applications. Additionally, export controls have impacted everything from design tools and materials to manufacturing equipment and chip products.

“In this situation, a practical problem we face in the long term is that China’s semiconductor manufacturing process will remain behind for quite a while. Huawei believes that this situation will persist for a considerable period because advanced processes are needed to produce more advanced chips. On the other hand, due to U.S. sanctions, obtaining advanced chips or computing systems presents challenges, if not impossibilities. Based on our years of experience and future judgment, this is a long-term situation. Don’t harbor any illusions about the future.”

“Although the chips, servers, and PCs we produce lag behind those produced abroad, if we don’t use them, the gap will always be there, and falling behind will always be the case. But if we use them on a large scale, it could drive progress in our entire technology and product development, gradually catching up”. According to Huawei, only through widespread use of domestic chips can push the entire computing industry to progress and develop.

Huawei recently quietly launched a high-end 5G smartphone equipped with the 7nm chip “Kirin 9000S,” manufactured by SMIC. While Chinese public opinion refers to it as a “breakthrough of the U.S. blockade” and a “strong return to 5G,” experts point out that its performance still lags behind the latest smartphone chips by two generations and question its manufacturing yield rate and output.

(Source: https://www.cna.com.tw/news/acn/202309160229.aspx)

According to a report by Taiwan’s Media TechNews, Taiwan’s leading semiconductor foundry, TSMC (Taiwan Semiconductor Manufacturing Company), experienced a significant 2.43% decline in its ADR (American Depositary Receipt) on the last trading day of the previous week in the U.S. stock market. This drop was attributed to media reports indicating that TSMC had requested its suppliers to delay equipment deliveries, subsequently affecting the stock prices of related semiconductor equipment companies. Furthermore, Goldman Sachs Securities has reduced its projections for TSMC’s capital expenditure over the next two years.

Goldman Sachs Securities noted that due to the slower-than-expected recovery in end-market demand, they have adjusted their revenue and capital expenditure estimates for TSMC and believe that both TSMC and UMC, another major semiconductor foundry, might delay their capacity expansion schedules. To enhance efficiency, these companies may also allocate equipment resources more effectively, reducing capital expenditures for 2024 and 2025.

Goldman Sachs Securities estimates that TSMC’s capital expenditure for 2023 will remain around $31.6 billion, with no adjustments made. However, due to the uncertainty surrounding demand recovery, TSMC is likely to reduce the pace of equipment procurement for advanced nodes. Instead, some of Taiwan’s equipment may be relocated to overseas production bases in Japan and the United States. Consequently, Goldman Sachs expects TSMC’s capital expenditure for 2024 to decrease from $28 billion to $25 billion, a 21% reduction compared to 2023. As for 2025, the capital expenditure projection has been adjusted from $36 billion to $35 billion.

Additionally, Goldman Sachs Securities has also lowered the utilization rates for TSMC’s 3nm process. Utilization rates for 2023 and 2024 have been adjusted from 40% and 71% to 36% and 65%, respectively, while the 2025 utilization rate is expected to remain unchanged at 78%. The production capacity for the 3nm process in 2024 and 2025 has also been revised from 80,000 and 90,000 wafers per month to 70,000 and 80,000 wafers per month.

(Photo credit: TSMC)