Samsung Electronics has disclosed its financial results for 2Q23, reporting quarterly revenue of 60.01 trillion Korean won. Although the DS division saw a rebound in revenue, the fall in smartphone shipments led to a 22% YoY decline.

Samsung highlighted an upturn in its memory business in Q2 due to a concentrated focus on HBM and DDR5 products. The company anticipates strong demand in AI applications, which has helped their DRAM shipments surpass expectations. In terms of panel production, earnings from smartphone panels paralleled those of the first quarter, largely owing to the sales of high-end panels. Meanwhile, the production of large panels continues to target the high-end QD-OLED market.

On the foundry side, Samsung reported a quarterly revenue increase during the second quarter, which was bolstered by growing sales to certain American clients. Yet, fab expansion and uncertainty in short-term demand contributed to a reduction in the utilization rate, triggering a substantial decrease in operating profit. The smartphone division experienced a drop in market demand, influenced by macroeconomic conditions such as high interest rates and inflation.

TrendForce reports that Samsung projects a rebound in global demand during 2H23, which could boost their earnings. Although potential macroeconomic risks are on the horizon, they aim to sustain profitability through sales of high-value products and the launch of innovative new products. However, considering the uncertainties for demand, TrendForce cautions that recovery in demand is expected to be gradual, with commodities prices only improving if suppliers maintain ongoing production cuts.

(Photo credit: Samsung)

China’s Automotive Price War Rages On: Some automakers have been gradually reclaiming outsourced orders for the battery, motor, electronic control system since May and June, shifting towards in-house production. Recently, they have asked suppliers to requote for second-half orders, with Samsung, Murata, Taiyo Yuden, PSA and Yageo actively vying for contracts.

Due to the more stringent certifications in the automakers’ supply chain compared to tier 1 suppliers, the majority of battery, motor, electronic control system MLCC suppliers still come from Taiwan, Japan, and Korea. Among them, Korean manufacturer Samsung has made significant progress in the Chinese automotive market this year. They have been actively providing sample for certifications and competitive pricing, securing a large share of orders and displacing Japanese manufacturers Murata and TDK, who had long held the lead.

Ongoing negotiations between automakers are expected to conclude with finalized orders by the end of August. According to the channel check from TrendForce, it appears that Samsung will maintain its leading position with a low-price strategy, while Murata, unwilling to be drawn into a price war reminiscent of consumer electronics, will remain conservative with pricing to secure a substantial market share. Taiyo Yuden, PSA and Yageo, though limited in automotive product offerings, have been proactive in their bidding efforts and have secured several orders.

(Photo credit: Yageo)

TrendForce will host the “LED Forum 2023” on September 5th at the National Taiwan University Hospital International Conference Center. The event will showcase presentations from TrendForce’s Senior Research Vice President, Eric Chiou, and representatives from various companies and institutes, including Mojo Vision, ITRI, Lumus, and others. Majorly focus on the advancements in Micro LED technology and its applications.

This event will host the Micro LED Forum on September 5th. The forum will cover key topics including Metaverse trends, Micro LED technology advancements and innovative applications. Industry experts will share market insights, company progress updates, and notable technological breakthroughs in 2023.

【Information】

• Date: September 5^th, 2023
• Time: 09:30~17:00（Registration starts at 8:45）
• Location: Room 401, NTUH International Convention Center
• Website：https://seminar.trendforce.com/LEDforum/2023/TW/index/

DRAM Spot Market:

Unlike the contract market, the spot market still shows daily drops mainly due to the influx of used chips that were stripped from decommissioned server DRAM modules. Since the demand situation has yet to turn around, spot prices on the whole continue to slide. There are no indications of a rebound in the near future. Regarding the mainstream chips (i.e., DDR4 1Gx8 2666MT/s), their average spot price fell by 0.67% from US$1.492 last week to US$1.482 this week.

NAND Flash Spot Market:

The NAND Flash spot market has yet to recover from its sluggishness since the end of June, and suppliers are still lingering under heavy sales pressure with no aggressive purchases due to the absence of peak season demand from Europe and America that was previously anticipated. These aforementioned stocking dynamics have led to an increase of 0.14% in 512Gb TLC wafer spots this week, arriving at US$1.404.

As the pandemic has eased, the global automotive market is picking up momentum, and it is estimated that the global shipments of automotive panels will exceed 200 million units in 2023. With the continuous demand for size enlargement and specification improvement in automotive panels, the adoption of TDDI architecture is becoming more prevalent, and it is expected that TDDI will gradually become the mainstream for automotive panels.

On the other hand, AMOLED panels have started to have opportunities for adoption in emerging electric vehicles and some high-end car models. However, their adoption has been slow due to potential issues with reliability, lifespan, and brightness. Currently, the overall penetration rate for AMOLED panels in the automotive sector is estimated to reach 6% by 2026.

Can Panel Manufacturers Replace Traditional Tier 1 Players and Directly Serve Automakers?

As traditional internal combustion engine vehicles transition to electric vehicles and the level of in-car electronics continues to rise, coupled with the development of autonomous driving technologies, the demand for automotive displays is constantly expanding. The integration of digital display panels with touch functionality is gradually becoming mainstream, and panel sizes are increasing, moving towards more integrated designs. Specifications such as resolution, wide viewing angles, and high refresh rates, as well as unique designs, are becoming focal points. Currently, display panel specifications are moving towards LTPS LCD panels, which offer larger sizes, superior display performance, and better energy efficiency.

Looking at the market conditions, after the outbreak of the pandemic in 2020, the demand for automotive panels declined, but it gradually recovered in 2021 and 2022. However, there is still an oversupply situation, and it is estimated that there will be a slight growth of 5.1% to reach 205 million units in 2023. In terms of shipment scale, China’s panel shipments maintain the best position with a share of over 40%, while Japanese panel manufacturers have been squeezed by Chinese counterparts, reducing their share to about 20%. Taiwan’s panel manufacturers account for approximately 21%, and Korean panel manufacturers represent 8%.

The traditional shipment model involves Tier 1 players contracting with car manufacturers for related validation, assembly, and supply chain management roles, and then subcontracting Tier 2 panel suppliers. With the transformation of the automotive industry and the semiconductor component shortages in the past few years, as well as the increased requirements for interior design in vehicles, car manufacturers are starting to seek better control over the supply chain. As a result, panel manufacturers may replace Tier 1 players and directly supply to automakers, and Tier 1 suppliers will face competition from panel manufacturers.

The Automotive TDDI Architecture Has Cost Advantages

In the early days, LCD automotive panels mainly used external touch solutions, with car-use DDI and independent touch ICs on the IC architecture. However, as panel sizes increased, the number of ICs used also increased, leading to higher costs. Therefore, the TDDI architecture became a new development direction.

TDDI is commonly used for panels up to 30 inches in size. A single TDDI solution can be used for 20-inch panels, while for 20-30 inch panels, a TDDI-cascade solution with approximately 2-3 TDDI-cascade architectures is often used. Panels larger than 30 inches use the LTDI (Local TDDI) structure.

New Display Technology Awaits Automotive Certification; Significant Growth Expected after 2025

AMOLED is mostly used in high-end car models or stylish new electric vehicles, but its rapid development is hindered by limitations in brightness, panel lifespan, and reliability. In comparison, LCDs with MiniLED BLU architecture offer similar display performance to AMOLED but at a more affordable price and with better safety, and they are expected to compete with AMOLED in the market.

For more information on this report or market data from TrendForce’s Department of Display Research, please click here, or email Ms. Grace Li from the Sales Department at graceli@trendforce.com