The sales revenue of the 2023 semiconductor photoresist market is expected to decline by 6-9% year-on-year. With continuous improvement in downstream customer inventory and gradual recovery of production capacity, the semiconductor industry is expected to experience a revival in 2024, and demand for photoresists is also expected to rebound.

TrendForce has released its latest report, ‘Analysis of the Global Photoresist Market in 2023,’ analyzing the market conditions and competitive landscape of the photoresist market. Excerpts from the report are as follows:

1. Semiconductor Demand Expected to Rebound in 2024

With the ongoing improvement in downstream customer inventory, gradual recovery of production capacity utilization, and the maturation and surge in applications such as AI and smart automobiles, it is anticipated that the semiconductor industry will experience a revival in 2024.

The semiconductor photoresist market is also poised for a rebound, with market size returning to the historical peak of 2022 and further growing to surpass USD 2.8 billion by 2027.

2. High-End Photoresists Show Significant Growth Potential as Chinese and Korean Suppliers Strive for Localization Breakthroughs

With the sustained growth in demand for advanced processes, high-end photoresists such as EUV, ArFi/ArF, will continue to grow as well. In particular, EUV photoresists are poised for substantial growth as the industry pursues chips with increased computational power and energy efficiency.

The quantity of advanced chips produced using EUV technology is expected to surge significantly, making EUV photoresists the segment with the greatest growth potential in the semiconductor photoresist market. It is projected that by 2025, EUV photoresists will account for a 10% share of the market.

Due to the high barriers to entry in photoresist production, currently, Japanese manufacturers dominate the global photoresist market with a supply proportion of approximately 80%.

Particularly in advanced photoresist areas such as EUV, ArFi/ArF, major Japanese companies like JSR, TOK, and Shin-Etsu Chemical hold absolute dominance, and incidents of supply disruptions from Japanese photoresist suppliers are not uncommon.

In response to the risk of supply disruptions, both China and South Korea have actively promoted the localization of photoresist production. In South Korea, companies like Dongjin Semichem and SK Materials have made significant progress in the field of advanced photoresists, achieving domestic production of certain ArFi and EUV photoresists.

In China, the domestic production rate of photoresists in the mid-to-low-end range has reached 30%, and efforts in research and development are continually strengthening in the field of ArF and EUV photoresists. Partial import substitution has been achieved for ArF photoresists, and it is anticipated that the domestic production rate will gradually increase in the future.

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• [News] Global Photoresist Prices Are on the Rise, Posing Challenges for the Semiconductor Industry

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On November 6, 2023, MediaTek unveiled its latest flagship smartphone SoC, the Dimensity 9300. Benchmark data reveals that the Dimensity 9300 outperforms Qualcomm’s flagship chips in both CPU (multi-core) and GPU performance.

However, Qualcomm enjoys a strong brand reputation and recognition in the consumer market, making it a challenging task for MediaTek to capture the top market position for high-end SoCs in the Android camp with this chip.

TrendForce’s Insights:

1. Brand New Design Boosts Dimensity 9300 Benchmark Performance

Diverging from the conventional “big core + small core” architecture, MediaTek introduces a groundbreaking “4+4” design in the Dimensity 9300. This chip comprises 4 Cortex-X4 cores (clocking up to 3.25GHz) and 4 Cortex-A720 cores (running at 2.0GHz).

According to MediaTek’s official data, this new architecture delivers a 40% increase in multi-core peak performance compared to the previous-generation Dimensity 9200. Additionally, it achieves a 33% reduction in power consumption while maintaining the same level of performance.

In addition to its outstanding chip performance and energy efficiency, the Dimensity 9300 achieves a significant breakthrough in the field of AI. According to official data, powered by the seventh-generation AI processor APU790, the Dimensity 9300 achieves AI edge computing processing speeds up to 8 times faster than the previous generation. In practical terms, this means it can generate image content from text in less than 1 second.

Furthermore, through MediaTek’s exclusive memory compression technology, known as NeuroPilot Compression, it significantly reduces the memory footprint of AI Large Language Models (LLMs) on end-user devices. This enables smooth operation of LLMs with up to 1 billion, 7 billion, 13 billion, and even a maximum of 33 billion parameters on terminal devices.

2. Dimensity 9300 Outperforms, but Qualcomm Remains a Strong Contender

While Dimensity 9300 exhibits superior performance in both CPU (multi-core) and GPU compared to Qualcomm’s concurrent flagship Snapdragon 8 Gen 3 SoC, a consumer survey conducted by a well-known international tech product comparison website tells a different story.

Out of 1,833 valid respondents, even after being informed about Dimensity 9300’s better benchmark results, 946 people (representing 51.6% of respondents) still chose the Qualcomm chip with lower scores.

This is likely because major smartphone manufacturers have historically favored Qualcomm over MediaTek for their flagship devices. Qualcomm has built a stronger brand image and enjoys higher recognition in the market. Therefore, MediaTek faces a formidable challenge in its quest to capture the top spot for Android high-end smartphone SoC market share with Dimensity 9300.

Furthermore, since the current benchmark results are derived from engineering samples, and the ultimate products from smartphone manufacturers have not been officially released, it remains to be seen whether Dimensity 9300 can deliver the expected performance efficiency. The final verdict on its performance will depend on the adjustments and optimizations made by these manufacturers.

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• [News] MediaTek Unveils Dimensity 9300 AI Mobile Chip: Intensifying Competition in the Chinese Market

(Photo credit: MediaTek)

TrendForce released the early November panel price trends today, with TV panel prices experiencing an unstoppable decline, while MNT (Monitor) and NB panel prices remained relatively stable.

TV panel

Entering the fourth quarter, TV panel shipments continue to weaken. However, the attempt by agents to influence panel prices through a surge in shipments of small-sized TV panels seems to have subsided, and panel prices are returning to a more balanced negotiation between buyers and sellers.

Major TV brands have been adjusting their orders since the latter half of the third quarter, and these adjustments have expanded into the all panel sizes in the fourth quarter.

Although panel manufacturers are still controlling production, it appears that they are finding it challenging to resist the decline in panel prices due to sluggish demand. As of the current outlook, it is expected that in November, panel prices will decrease by 2-dollar for the entire month in the sizes of 32″, 43″, 50″, and 55″, while sizes of 65″ and 75″ will experience a 3-dollar drop, and 85″ will face a 5-dollar decline.

MNT Panel

Entering the fourth quarter, demand for MNT panels has started to weaken. In October, mainstream panel sizes showed a tendency to stabilize in terms of pricing, with only some high-end models having slight room for price reductions, especially for high refresh rate specifications.

Currently, it is expected that panel manufacturers will continue to maintain a stable price trend for mainstream size MNT panels in November. However, should brand demand fall short of expectations, there is a possibility of price decreases, particularly in Open Cell panels or in larger-sized, high-end models.

NB Panel

Entering the fourth quarter, demand for NB panels continues to weaken. However, panel manufacturers remain committed to maintaining stable panel prices, especially as they face downward price pressures in TV and MNT panels. Panel manufacturers are reluctant to make significant concessions on NB panel prices, except for the possibility of offering certain discounts through project-based bundling models.

Currently, it is expected that NB panel prices, whether for entry-level TN panels or mid- to high-range IPS panels, will continue to maintain a stable trend in November.

In TrendForce’s latest solar energy pricing, it is revealed that upstream polysilicon and wafer transactions have reached a standstill, while downstream cell and module prices continue to decline.

• Polysilicon

Polysilicon prices continue to decline throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 70/KG, while mono dense polysilicon is priced at RMB 68/KG and N-type polysilicon is currently priced at RMB 75/KG.

In terms of trading, this week has shown a slight improvement compared to the stagnation of the previous week. Some small orders have been placed, but the majority of companies are still in the negotiation process. Additionally, there are ongoing discussions about transaction prices for polysilicon and crystal pulling.

Examining the price trends, there’s a notable divergence between leading manufacturers and second-tier manufacturers, with the current prices approaching the cost threshold for the latter and older capacity.

When we analyze the supply and demand dynamics, it becomes evident that as polysilicon prices continue to decline, downstream manufacturers are considering production cuts, and new production capacity might face the challenge of running at a loss right after starting operations.

Moreover, considering the projected oversupply in the future and the potential for prices to hit rock bottom, some manufacturers have realized that the profits from new production capacity may differ significantly from their expectations, prompting them to adjust their production schedules.

However, in the short term, polysilicon output is showing a month-on-month growth trend this quarter. As downstream demand decreases, polysilicon prices will likely continue to face pressure. Overall, this week has seen a decline in quoted polysilicon prices, and the price gap between N-type and P-type polysilicon continues to narrow.

• Wafer

The prices of wafer have still reduced throughout the week. The mainstream concluded price for M10 wafer is RMB 2.30/Pc, while G12 wafer is priced at RMB 3.30/Pc. The current cell prices are causing significant losses in the cell business, leading to a substantial reduction in activation rates.

The overall market turnover is currently sluggish. Additionally, the quoted prices only reflect the trend of declining wafer prices and may not accurately represent the actual transaction prices for spot goods.

On the supply side, wafer prices have continued to decline over the past two weeks. If the prices of different types of wafers keep dropping, manufacturers may find themselves in a situation where their costs exceed their selling prices.

Consequently, wafer production schedules have seen a significant reduction, forcing some second and third-tier manufacturers to maintain OEM business for meager profits. The current wafer inventory level has decreased to 1.9-2.1 billion pieces, and there are indications that prices are reaching a bottom in the market.

On the demand side, downstream cell manufacturers are gradually reducing their production schedules, and inventory issues have not been effectively resolved. As a result, cell manufacturers are becoming more cautious when it comes to purchasing wafers. This week, wafer prices have continued to decline, but the rate of decline will narrow with cost support.

However, considering the price pressure imposed by downstream consumers, their high inventory levels, and other factors, wafer prices have yet to stabilize and are likely to continue falling in the future.

• Cell

Cell prices have still declined this week. The mainstream concluded price for M10 cell is RMB 0.48/W, while G12 cell is priced at RMB 0.52/W. The price of M10 mono TOPCon cell is RMB 0.49/W.

On the supply side, current cell inventory has remained high for more than seven days. Consequently, facing pressure from both the elevated inventory levels and downstream module manufacturers, cell prices have experienced a decline.

The current price of M10 P-type cells stands at 0.48 yuan per watt, which is approaching the production cost of leading integrated manufacturers. The reduction in cell production is the current scenario.

However, the shipment pressures haven’t been alleviated, and the price gap between N-type and P-type cells has narrowed, putting both types at risk of operating at a loss due to costs exceeding their prices. On the demand side, the domestic peak season for centralized cell procurement has concluded, and there has been no significant uptick in demand in overseas markets or the distributed PV sector.

As a result, the demand for cells has weakened. With module prices also under pressure, module manufacturers are inclined to push down cell prices. Although there has been some improvement in the rate of decline for cells this week, the accumulation of cell inventory, falling upstream material prices, and sluggish downstream demand continue to exert constant pressure on cell prices.

• Module

Module prices have gone down slightly throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 1.08/W, 210mm facial mono PERC module is priced at RMB 1.11/W, 182mm bifacial glass PERC module at RMB 1.09/W, and 210mm bifacial glass PERC module at RMB 1.12/W.

On the supply side, module prices are persistently decreasing and have come close to the cost price of integrated manufacturers. Specialized module manufacturers, in response to module prices falling below their cost, have had to reduce their production rates to avoid losses. This is evident from the reduced demand for various auxiliary materials associated with module production.

On the demand side, the primary driver of demand continues to be large domestic projects, whereas overseas demand has not shown any significant increase. The overseas market is still working through its high inventory. In domestic bidding projects, there’s a noticeable shift toward an increased proportion of N-type modules, indicating a faster transition in demand toward N-type technologies.

In the third round of centralized procurement for PV modules by Huadian Group, the quoted price stands at 0.9933 yuan per watt. In the same month, the bidding price for modules in the centralized procurement tender by CHN Energy is 0.945 yuan per watt, marking a record low within a single month.

This price trend underscores the inevitable intense competition within the module sector, as excess production capacity is evident throughout the entire industry chain. This week, module prices have continued their descent. In summary, it’s probable that module prices will remain volatile in the future, especially considering that bidding prices for modules are swiftly approaching the 1 yuan mark.

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• PV Industry Supply Chain Price Update

According to Bloomberg, Apple is quietly catching up with its competitors in the AI field. Observing Apple’s layout for the AI field, in addition to acquiring AI-related companies to gain relevant technology quickly, Apple is now developing its large language model (LLM).

TrendForce’s insights:

1. Apple’s Low-Profile Approach to AI: Seizing the Next Growth Opportunity

As the smartphone market matures, brands are not only focusing on hardware upgrades, particularly in camera modules, to stimulate device replacements, but they are also observing the emergence of numerous brands keen on introducing new AI functionalities in smartphones. This move is aimed at reigniting the growth potential of smartphones. Some Chinese brands have achieved notable progress in the AI field, especially in large language models.

For instance, Xiaomi introduced its large language model MiLM-6B, ranking tenth in the C-Eval list (a comprehensive evaluation benchmark for Chinese language models developed in collaboration with Tsinghua University, Shanghai Jiao Tong University, and the University of Edinburgh) and topping the list in its category in terms of parameters. Meanwhile, Vivo has launched the large model VivoLM, with its VivoLM-7B model securing the second position on the C-Eval ranking.

As for Apple, while it may appear to be in a mostly observatory role as other Silicon Valley companies like OpenAI release ChatGPT, and Google and Microsoft introduce AI versions of search engines, the reality is that since 2018, Apple has quietly acquired over 20 companies related to AI technology from the market. Apple’s approach is characterized by its extreme discretion, with only a few of these transactions publicly disclosing their final acquisition prices.

On another front, Apple has been discreetly developing its own large language model called Ajax. It commits daily expenditures of millions of dollars for training this model with the aim of making its performance even more robust compared to OpenAI’s ChatGPT 3.5 and Meta’s LLaMA.

2. Apple’s Advantage in Developing a Paid Subscription Model for Large Language Models Compared to Other Brands

Analyzing the current most common usage scenarios for smartphones among general consumers, these typically revolve around activities like taking photos, communication, and information retrieval. While there is potential to enhance user experiences with AI in some functionalities, these usage scenarios currently do not fall under the category of “essential AI features.”

However, if a killer application involving large language models were to emerge on smartphones in the future, Apple is poised to have an exclusive advantage in establishing such a service as a subscription-based model. This advantage is due to recent shifts in Apple’s revenue composition, notably the increasing contribution of “Service” revenue.

In August 2023, Apple CEO Tim Cook highlighted in Apple’s third-quarter financial report that Apple’s subscription services, which include Apple Arcade, Apple Music, iCloud, AppleCare, and others, had achieved record-breaking revenue and amassed over 1 billion paying subscribers.

In other words, compared to other smartphone brands, Apple is better positioned to monetize a large language model service through subscription due to its already substantial base of paying subscription users. Other smartphone brands may find it challenging to gain consumer favor for a paid subscription service involving large language models, as they lack a similarly extensive base of subscription users.

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