DRAM Spot Market
Spot prices of DRAM products have risen slightly lately due to Samsung’s earlier attempt to raise prices of 3D NAND Flash wafers as well as the temporary halt in the flow of rebelled used chips into the market. DDR4 products have experienced a more noticeable price increase compared with DDR5 products. However, there is still insufficient actual demand to sustain the rise in spot prices. Furthermore, most spot traders already have sufficient inventory. Therefore, prices have stopped falling, but the overall transaction volume is not expanding. TrendForce believes spot prices are near the trough for this downturn phase of the price cycle. Nevertheless, there is some time before the overall average spot will rebound because demand visibility is limited. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) fell by 0.34% from US$1.456 last week to US$1.451 this week.

NAND Flash Spot Market
The intermittent price increases of packaged dies at various capacities are reflecting persistently sluggish market demand, while wafer prices, after several consecutive weeks of elevation in prices, are now gradually subsiding in differences to that of the contract market. 512Gb TLC wafer spots have risen by 3.88% this week, arriving at US$1.578.

According to Taiwan’s TechNews report, Intel has revealed the architecture and supply schedule of the new generation data center Xeon processors, Sierra Forest and Granite Rapids. They are also set to unveil the consumer processor codenamed Meteor Lake in mid-September. However, with the semiconductor market’s current weak recovery, the impact of Intel’s new processors on driving upgrades and benefiting Taiwanese supply chain manufacturers remains uncertain, making it a market focal point.

Regarding the consumer-oriented Meteor Lake processor, industry sources suggest that it will not only be the first to adopt “Intel 4” technology, but also the first to utilize EUV lithography for cost reduction in mass-producing CPU tiles. TSMC will assist in production using the 5/6 nanometer process for graphics chip modules (GFX tile), system chip modules (SoC tile), and input/output chip modules (IOE tile), aiming for higher yields to decrease production costs.

Furthermore, the Meteor Lake processor shifts from traditional monolithic chip design to chiplet technology. After separating functions like graphics, system, and I/O chips, it employs the 3D Foveros advanced packaging technology. Through Foveros interconnects, multiple chiplets are vertically stacked into one chip. This approach not only increases the yield of critical modules but also reduces costs, granting Intel greater flexibility in rapidly creating next-generation chip capacities.

For the upcoming Meteor Lake processor, its direct beneficiary is undoubtedly TSMC, which assists in producing graphics chip modules, system chip modules, and input/output chip modules using the 5/6 nanometer process. This collaboration not only boosts revenue but also maintains the ongoing partnership with Intel.

However, despite Taiwanese foundries and board manufacturers securing orders for Intel’s new-generation processors, the current economic environment remains unfavorable. With a cautious and conservative outlook on consumer spending in the global market, the launch of Intel’s new products could either boost supply chain revenue or lead to increased inventory in the next phase, requiring further observation.

(Photo credit: Intel)

According to a report from Taiwan’s TechNews, NVIDIA has delivered impressive results in its latest financial report, coupled with an optimistic outlook for its financial projections. This demonstrates that the demand for AI remains robust for the coming quarters. Currently, NVIDIA’s H100 and A100 chips both utilize TSMC’s CoWoS advanced packaging technology, making TSMC’s production capacity a crucial factor.

Examining the core GPU market, NVIDIA holds a dominant market share of 90%, while AMD accounts for about 10%. While other companies might adopt Google’s TPU or develop customized chips, they currently lack significant operational cost advantages.

In the short term, the shortage of CoWoS has led to tight chip supplies. However, according to a recent report by Morgan Stanley Securities, NVIDIA believes that TSMC’s CoWoS capacity won’t restrict shipments of the next quarter’s H100 GPUs. The company anticipates an increase in supply for each quarter next year. Simultaneously, TSMC is raising CoWoS prices by 20% for rush orders, indicating that the anticipated CoWoS bottleneck might alleviate.

According to industry sources, NVIDIA is actively diversifying its CoWoS supply chain away from TSMC. UMC, ASE, Amkor, and SPIL are significant players in this effort. Currently, UMC is expanding its interposer production capacity, aiming to double its capacity to relieve the tight CoWoS supply situation.

According to Morgan Stanley Securities, TSMC’s monthly CoWoS capacity this year is around 11,000 wafers, projected to reach 25,000 wafers by the end of next year. Non-TSMC CoWoS supply chain’s monthly capacity can reach 3,000 wafers, with a planned increase to 5,000 wafers by the end of next year.

(Photo credit: TSMC)

According to the news from Chinatimes, Tesla, the leading electric vehicle manufacturer in the United States, achieved a record-breaking delivery volume of 466,140 units in the second quarter of this year. Meanwhile, Chinese electric car companies like NIO and BYD have made strides in the European market, increasing their sales market share from 4% in 2021 to 6% in 2022, and now reaching an impressive 8% in early 2023.

The Biden administration’s implementation of the IRA Act is expected to drive a significant increase in sales for Tesla and other EV manufacturers. It is projected that the annual growth rate for EV sales in the U.S. could potentially reach 49% this year. In China, the growth is mainly attributed to the continuation of the government’s policy of exempting consumers from purchase taxes. The estimated growth rate for Chinese EV sales this year is around 26%. In Europe, there is optimism for countries like Germany, France, and the UK, where EV penetration is currently only at around 20%. There is potential for a 37% increase in sales this year in these regions.

According to the market insider says the global EV market has witnessed fierce competition in 1H23, with major manufacturers engaging in price wars to capture market share. For instance, Tesla’s best-selling EV, the Model Y, sold 889,000 units in 1H23, accounting for around 49.38% of the total annual sales of 1.8 million units. BYD, the top-selling electric car manufacturer in China, sold 1.2556 million units in the first half of the year, achieving 41.85% of its annual target of 3 million units. Another emerging Chinese EV brand, Li Auto, also achieved a sales target rate of nearly 50% in 1H23.

Leading electric vehicle manufacturers globally, including Tesla from the United States and NIO and BYD from China, have successfully increased their sales through a series of price reduction strategies and aggressive expansion into international markets. While short-term price reductions might impact profit margins and stock prices, the long-term outlook is promising. As these manufacturers enhance their market share, potentially even achieving “super dominance” in the market rankings, the excess market share can contribute to their competitive advantage and long-term profitability, enabling them to tap into other revenue streams beyond high market share dividends.

The market forecast indicates that electric vehicle sales in 2023 could surge to 13.32 million units, representing a growth rate of over 30% compared to 2022. The driving forces behind this growth remain centered in the United States, China, and the European countries including Germany, the UK, and France. (Image credit: BYD)

(Source: https://www.chinatimes.com/realtimenews/20230829001265-260410?ctrack=pc_main_rtime_p03&chdtv)

According to a report by Taiwan’s TechNews, Chinese electric vehicle giant BYD group announced on yesterday its intention to acquire the mobile electronics manufacturing business of American electronic contract manufacturer Jabil for nearly $2.2 billion in cash, encompassing operations in Chengdu and Wuxi, China. This move is widely interpreted as BYD’s strategy to infiltrate Apple’s supply chain, potentially encroaching on orders from Foxconn and Pegatron.

Notably, Jabil has been a significant supplier of iPhone components to Apple in the past. With BYD acquiring Jabil’s business in Chengdu and Wuxi, there’s speculation that BYD’s aim is to compete for orders from Foxconn and Pegatron. This development has again brought attention to the Apple supply chain dynamics.

In fact, recent times have seen frequent actions within the Apple supply chain landscape. Just last week, China’s Wingtec’s Kunming plant received the “3C Quality Certificate” for Apple’s M2 MacBook Air, indicating that, similar to the M1 MacBook Air, the M2 version will also be produced in China. Beyond BYD and Wingtec, Chinese companies like Luxshare Precision, GoerTek, and Tianma Microelectronics have made inroads into the Apple supply chain through various product avenues.

However, whether BYD’s acquisition of Jabil will significantly impact the volume of Apple orders for Taiwanese manufacturers remains to be observed. An industry insider shared insights with TechNews, suggesting that Jabil’s decision to sell its operations in Chengdu and Wuxi to BYD might be due to the increasing number of American companies relocating from China due to U.S.-China tensions.

Furthermore, there are rumors that Jabil is contemplating a corporate transformation, although the exact nature of this transformation remains unknown. Selling a portion of its business could potentially mark the first step in this transformation journey.

Additionally, while BYD is acquiring Jabil’s business in Chengdu and Wuxi for nearly $2.2 billion, this amount might not be substantial from a corporate perspective, implying that Jabil’s previous capacity offered might be considerably smaller than that of Taiwanese manufacturers.

The industry source also posits that BYD’s acquisition of Jabil’s business in China might simply signify BYD’s intention to venture into institutional component manufacturing, without necessarily indicating a shift towards producing Apple-related products in the end.

(Photo credit: BYD)