Following China’s Big Fund’s substantial $14.56 billion RMB investment in Changxin Xinqiao Storage Technology, a memory chip manufacturer, at the end of October, there are now reports of an additional $39 billion RMB injection.

China is actively building a domestic semiconductor supply chain, and according to Nikkei Asia, Changxin Xinqiao is set to utilize this funding to expedite the construction of its facility in Hefei, Anhui province, with the aim of achieving mass production within a span of three years.

Hefei is also the location of a production facility for ChangXin Memory Technologies (CXMT), a major semiconductor manufacturer specializing in DRAM production. Changxin Xinqiao shares some shareholders and its general manager with CXMT, according to Tianyancha.

Chinese media points out that Changxin Xinqiao has ambitious plans to produce DRAM chips in Hefei, destined for use in computers and a wide array of electronic devices. At present, Changxin Xinqiao has initiated the tendering process for new facility equipment and is poised to accelerate procurement and related procedures using the recently acquired funding.

With support from the Hefei City government, Changxin Xinqiao initiated the DRAM factory construction project in 2019 and laid out a policy to make use of domestically manufactured semiconductor production equipment.

(Image: CXMT)

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• [News] With two October Investments, Big Fund Phase II Commits Nearly 19 Billion RMB
• Memory Spot Price Updates: DRAM and NAND Flash Prices Soaring at Relatively High Levels

The research institution TrendForce held its AnnualForecast 2024 Seminar on November 3, where they delved into discussions about global wafer foundry trends, the applications of AI, the dynamics of AI servers, and the demand for High Bandwidth Memory (HBM).

Joanne Chiao, analyst from TrendForce, observed that while AI servers have experienced robust growth over the past two years, AI chips account for just 4% of wafer consumption, limiting their impact on the overall wafer industry. Nevertheless, both advanced and mature processes offer business opportunities. The former benefits from the desire of companies like CSPs to develop customized chips, leading them to seek the assistance of design service providers; while the latter can consider venturing into sector such as power management ICs and I/O solutions.

Persisting US export restrictions continue to affect China’s foundries, causing delays in their expansion plans. Furthermore, the regionalisation of wafer foundry services is exacerbating issues related to uneven resource distribution.

Due to lackluster end-market demand and fierce market competition, the capacity utilization rate of 8-inch wafer foundries continue to decline until the first quarter of the upcoming year. Inventory adjustments are underway in the fields of industrial control and automotive electronics. Chinese foundries are more willing to offer competitive prices, and outperforming their counterparts in Taiwan and Korea in terms of order performance.

In the realm of 12-inch wafer foundry services, success relies on technological leadership and exclusivity. Competition isn’t as intense as it is with 8-inch wafers. This resurgence is driven by inventory replenishment, the demand for iPhone 15, select Android smartphone brands, and the need for AI chips. A moderate recovery is expected in the latter part of this year.

TrendForce indicates that, with the expansion of processes beyond 28nm, mature process capacity is expected to occupy less than 70% of the capacity of the top ten foundries by 2027. Under the pressure to transition towards mature processes, China is anticipated to account for 33% of mature process capacity by 2027, with the possibility of further increases.

It’s noteworthy that Japan is actively promoting the revival of its semiconductor industry and, through incentives for foreign companies establishing fabs, may secure 3% of advanced process capacity.

TrendForce’s analyst, Frank Kung, predicts that the shipment of Nvidia’s high-end GPU processors will exceed 1.5 million units this year, with a YoY growth rate of over 70%, expected to reach 90% by 2024. Starting from the latter half of this year, Nvidia’s high-end GPU market will transition primarily to H100. As for AMD, its high-end AI solutions are mainly targeted at CSPs and supercomputers. The AI server market, equipped with MI300, is expected to experience significant expansion in the latter half of this year.

In the 2023-2024 period, major CSPs are poised to become the primary drivers of AI server demand, with Microsoft, Google, and AWS ranking among the top three. Additionally, the robust demand for cloud-based AI training is expected to propel the growth of advanced AI chips, which may, in turn, stimulate growth in power management or high-speed transmission-related ICs in the future.

Lastly, concerning HBM, TrendForce’s senior research vice president, Avril Wu, mentioned that as Nvidia’s H100 gradually gains momentum, HBM3 is set to become the industry standard in the latter half of this year. With the launch of B100 next year, HBM3e is poised to replace HBM3 as the mainstream memory in the latter half of the following year. Overall, HBM plays a pivotal role in DRAM revenue, with expectations of an increase from 9% in 2023 to 18% in 2024, potentially leading to higher DRAM prices in the coming year.
(Image: TechNews)

DRAM Spot Market
Major module houses are still holding a fairly high level of inventory, so they are less adhered to the consensus that prices will go up. Currently, their main strategy in the spot market is to have their quotes closely aligned with the quotes in the contract market. Therefore, spot prices are not expected to change significantly before contract prices rise further in November. Even though the overall volume of spot trading remains low, the average prices of items are not fluctuating noticeably. For the mainstream chips (i.e., DDR4 1Gx8 2666MT/s), their average spot rose by 1.46% from US$1.577 last week to US$1.600 this week.

NAND Flash Spot Market

Spot transactions have been ramping up since September under the active inclination of price follow-ups among buyers, though spot prices have slightly mitigated in growth over the past two weeks after arriving at US$2, where some products are seeing a diminishing level of transactions due to the high markup. The continuity of price hikes will require further observations. 512Gb TLC wafer spots have risen by 12.72% this week, arriving at US$2.304.

SK hynix has introduced LPDDR5T (Low Power Double Data Rate 5 Turbo), a mobile DRAM with a remarkable 9.6Gbps speed. What sets this apart is its compatibility with Qualcomm’s new Snapdragon 8 Gen 3 Mobile Platform.

LPDDR5T features a 16GB-capacity version, delivering data processing speeds of 77GB per second while maintaining low power consumption. Its efficiency and speed are achieved through the incorporation of HKMG (High-K Metal Gate) technology, which reduces power usage and increases processing speed.

“Generative AI applications running on our new Snapdragon 8 Gen 3 enables exciting new use cases by executing LLMs and LVMs on device with minimal latency and at the lowest power,” said Ziad Asghar, Senior Vice President of Product Management at Qualcomm Technologies, Inc. “Our collaboration with SK hynix pairs the fastest mobile memory with our latest Snapdragon mobile platform and delivers amazing on-device, ultra-personalized AI experiences such as AI virtual assistants for smartphone users.”

“We are thrilled that we have met our customers’ needs for the ultra-high performance mobile DRAM with the provision of the LPDDR5T,” said Sungsoo Ryu, Head of DRAM Product Planning at SK hynix.

This collaboration between SK hynix and Qualcomm signals a new era for smartphones, aims to provide on-device, ultra-personalized AI experiences. As smartphones continue to evolve with enhanced DRAM for mobile, the partnership is set to strengthen and drive innovation in this space, positioning the devices as key vehicles for AI applications in the coming years.

(Image: SK hynix)

DRAM Spot Market

The price trend in the spot market has diverged slightly compared with the price trend in the contract price. Spot prices of DRAM chips and modules rose successively over the previous several weeks. However, the upward momentum has lost steam in recent days due to a lack of channel demand. In the case of module house Kingston, it currently holds a high level of DRAM inventory, so its pricing strategy is more conservative compared with other module houses. Also, since Kingston is the leading module house, spot prices of modules on the whole are constrained from climbing further. For now, buyers and sellers in the spot market are taking a wait-and-see approach. The trajectory of spot prices is expected to become clearer following the finalization of prices for 4Q23 contracts. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 0.71% from US$1.560 last week to US$1.571 this week.

NAND Flash Spot Market

Spot transactions have slightly shrunken recently under insufficient stocks on account of the drastically diminished level of wafer provision from suppliers. On the other hand, buyers who are suppressed in their sentiment of following up with prices, due to the accumulated increment that is already quite significant within the short term, have been relatively restricted in the increase of concluded prices, despite maintaining an upward trend. 512Gb TLC wafer spots have climbed 5.85% this week, arriving at US$2.044.