Recently, major memory manufacturers such as Micron, Samsung, and Western Digital have all announced price hikes. Industry sources indicate that since 1Q24, memory manufacturers stay steadfastly in controlling supply and raising prices. Coupled with the impact of the recent earthquake in Taiwan, the supply-demand imbalance has further driven up memory prices.

However, it’s worth noting that according to industry experts, the primary driving force behind the recent price increases in the memory market is still from manufacturers. As to the demand side, significant growth are mainly seen in industrial control needs, AI large models, and automotive intelligentization, while other fields have not yet seen obvious growth.

Regarding the impact of the 403 earthquake, TrendForce expects the influence on the output bit of DRAM in 2Q24 to remain within 1%. Specifically, due to Micron’s earthquake-related damages being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing. The subsequent price trends still require observation.

• Has Micron Increased Prices by More Than 20% in Q2?

On April 9th, Taiwanese media reported that Micron has proposed price increases of over 20% for its products in Q2 to most customers, with price negotiations still ongoing.

It is reported that after the earthquake on April 3, Micron temporarily suspended the announcement of DRAM product quotation for the second quarter.

Currently, TrendForce maintains its previous expectations for the second-quarter contract price of Mobile DRAM, with an increase of about 3-8% QoQ. As for Server DRAM, due to the earthquake-related damages to Micron being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing, and the subsequent price trends still require observation. In regard to HBM, since most of Micron’s HBM 1beta production and TSV lines are located in Hiroshima, Japan, supply or price remain unchanged.

In the spot market, some module manufacturers like Kingston and ADATA have restarted quoting prices, but no price increase has been implemented yet. TrendForce believes that the earthquake’s impact on pushing up prices is limited.

Overall, due to the relatively low inventory of DDR3, there is still room for price increases. Whereas, DDR4 and DDR5 inventory is comparatively sufficient, coupled with weak demand, which are expected bring the situation of small consecutive price increases caused by the earthquake to return back to normal within a few days.

• Western Digital Continuously Increases NAND Flash and HDD Prices

On April 8, Western Digital confirmed for the first time that there is a shortage of supply for both HDD and SSD, and issued formal customer letters notifying of price adjustments for NAND Flash and hard drive products. Western Digital stated that the demand for flash memory and hard drive products has exceeded expectations, leading to supply shortages. Prices for these products will continue to be adjusted this quarter, with some adjustments taking immediate effect.

Western Digital acknowledged that it will perform the frequent price reviewing and adjust it accordingly. Furthermore, Western Digital also stated that its ability to handle orders outside of the plan is quite limited, so any order changes need to be notified in advance.

• Samsung Raises Prices of Enterprise SSD?

In the past two weeks, rumor has it that enterprise SSD fell into a supply shortage. According to industry sources, due to the optimistic outlook for SSD to become a part of AI in the future, paired with recent supply tensions, their prices have started to rise. Samsung is rumored to increase prices for enterprise SSD by 20-25% in 2Q24, reversing the downward trend seen in 2023.

Reportedly, Samsung initially planned to raise prices by about 15% compared to the previous quarter, but higher-than-expected demand led Samsung to expand the price hike. Samsung’s enterprise SSD accounts for approximately half of the market share, thus exerting a significant influence on pricing decisions.

A study by TrendForce on March 7 shows that in 4Q23, Samsung ranked first globally in the Enterprise SSD market with a market share of 41.7%, followed by SK Hynix (33.2%), Micron (10.8%), Kioxia (9.4%), and Western Digital (4.9%).

• TrendForce Released Forecasts for DRAM and NAND Flash Contract Prices for 2Q24

In terms of overall price trends, TrendForce estimates that although the inventory of DRAM suppliers has decreased, it has not yet returned to a healthy level. Furthermore, as they gradually shake of the loss situation, suppliers are expected to further increase their capacity utilization rates.

However, due to the lackluster overall demand outlook for this year and the large price increases by suppliers since 4Q23, the momentum for inventory replenishment is expected to weaken. Therefore, TrendForce anticipates that the quarterly increase in DRAM contract prices in the second quarter will converge to 3-8%.

Regarding NAND Flash, TrendForce stated that, except for Kioxia and Western Digital, which have been increasing their capacity utilization rates since 1Q24, other suppliers are generally maintaining a low production strategy.

Although the procurement volume of NAND Flash in 2Q24 has declined slightly compared to 1Q24, the overall market climate continues to be influenced by reduced supplier inventory and the impact of production cuts. Consequently, TrendForce forecasts a strong increase of around 13-18% in NAND Flash contract prices in 2Q24.

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• [Insights] The Spot Price of DRAM Continues to Decline, Weak Trading Volume for NAND Flash
• [Insights] DRAM and NAND Flash Spot Prices Drop as Demand Weakens

(Photo credit: Samsung)

Following grants to Intel and TSMC, the US administration reportedly plans to announce next week a USD 6 to 7 billion subsidy to Samsung for constructing a semiconductor fab in Taylor, Texas, aimed at increasing chip production capacity.

According to sources cited by Reuters, this funding initiative, set to be announced by U.S. Commerce Secretary Gina Raimondo, will back four projects at Samsung’s site in Taylor, Texas. These projects include a previously disclosed USD 17 billion chip manufacturing plant, along with an additional plant, an advanced packaging facility, and a research center.

Furthermore, the plan involves Samsung’s investment in another undisclosed location. As part of the deal, Samsung’s investment in the U.S. is projected to more than double, exceeding USD 44 billion.

In 2022, the U.S. Congress passed the CHIPS and Science Act, allocating USD 52.7 billion for research and manufacturing grants, alongside USD 75 billion in government loans, aimed at boosting American semiconductor production and reducing reliance on China and Taiwan. As per the Semiconductor Industry Association (SIA), the U.S. share of global semiconductor manufacturing capacity declined from 37% in 1990 to 12% in 2020.

Samsung is poised to become the third-largest recipient of subsidies under the semiconductor act, following TSMC. The US administration is set to provide USD 6.6 billion in aid to TSMC, which plans to build a third chip plant in Arizona with a total investment of USD 65 billion.

According to the latest information released by TSMC, Arizona’s first fab is on track to begin production leveraging 4nm technology in first half of 2025. The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028.

The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab.

Previously, the U.S. government announced that Intel would receive USD 8.5 billion in federal subsidies and USD 11 billion in loans. Intel is planning to invest USD 100 billion across four states in the U.S. for building and expanding fabs, and is also seeking an additional USD 25 billion in tax credits.

Regarding the rumored subsidy to Samsung, the U.S. Department of Commerce, Texas Governor Greg Abbott’s office, and Samsung have declined to comment on the matter.

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• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

Following the shortage of HBM memory production capacity, the memory market is experiencing another shortage. As the memory market plunged into a downturn in 2021, SSD prices continued to slide for about two years. In response to market changes, memory manufacturers reduced production of NAND Flash. With the effective implementation of production reduction strategies, demand partly increased, leading to a tightening supply of SSD.

Recently, it’s reported that NAND Flash product market has experienced a shortage in enterprise SSD.It’s believed that this is mainly due to the AI boom, coupled with the large-scale construction of data centers by global technology giants, which has significantly increased the demand for memory devices, resulting in a tight supply of SSDs. In this context, major memory manufacturers began to take action.

Amid the SSD Supply Shortage, Suppliers Raise Prices Drastically

1. Samsung Hikes Prices of Enterprise SSD

Over the past two weeks, it’s frequently reported that enterprise SSD faced a shortage, prompting the major memory manufacturer Samsung to consider a price increase of 25% on enterprise SSD.

According to a report from BusinessKorea on April 2nd, Samsung is rumored to implement a price increase of 20-25% on enterprise SSD in 2Q24, aiming to reverse the downward trend experienced since 2023. Initially, Samsung planned to raise prices by around 15% from the previous quarter. However, due to higher-than-expected demand, Samsung has decided to expand the price increase. As Samsung holds approximately half of the market share in enterprise SSD, it will exert a significant influence over pricing decisions.

As per a research by TrendForce on March 7th, Samsung dominated the global enterprise SSD market with a market share of 41.7%, followed by SK Hynix (33.2%), Micron (10.8%), Kioxia (9.4%), and Western Digital (4.9%) in 4Q23.

It is worth mentioning that these five companies are also among the top five NAND Flash memory giants globally. These original manufacturers not only produce NAND Flash memory but also develop controller ICs and manufacture enterprise SSD products.

According to previous study by TrendForce, the controller IC field is mainly divided into two major camps: One contains the aforementioned memory manufacturers, who generally do not sell controller ICs externally, although Micron’s controller ICs are used both in their own products and sold to other manufacturers; the other refers to IC design companies, represented by companies such as Marvell, SIMO, and Phison.

As a pioneer in controller ICs field, Marvell occupies the high-end market for a long time, supporting the use of high-performance and large-capacity SSD in enterprise and large-scale data center environments. SIMO and Phison gain their foothold in the enterprise SSD market on the strength of cost-effectiveness advantages.

On the supply side, Wallace C. Kou, GM of SIMO, previously stated that prices for NAND Flash in 2Q24 have already been negotiated, with a 20% increase expected. He indicated that some suppliers began to rear profit in 1Q24 and more are expected to rake in money in 2Q24.

According to TrendForce, apart from Kioxia and Western Digital, which have increased their capacity utilization rates since 1Q24, other suppliers have generally maintained a low production strategy. Although NAND Flash purchases in 2Q24 have slightly decreased relative to 1Q24, the overall market situation continues to be affected by reduced inventories and production cuts. The contract price of NAND Flash in 2Q24 is estimated to rise strongly by about 13-18%.

Benefited from the increase in demand from cloud service provider (CSP) in North America and China, it is expected that the procurement volume of enterprise SSD will grow quarter by quarter in 1H24. Due to the low Order Fill Rate (OFR) for high-capacity SSD orders, suppliers still dominate the price trend, and buyers is forced to accept the increased possibility of supplier prices.

Meanwhile, some buyers still attempt to increase their inventory levels before the peak season in 2H24. Therefore, it is estimated that the contract price of enterprise SSD in 2Q24 will increase by 20-25%, marking the highest increase across all product lines.

2. Consumer SSD Prices Continue to Increase

At the meantime, there’s news in the consumer SSD market. On a wholesale prices basis, a report from Nikkei on April 2 said that the wholesale price (Bulk transaction price) of benchmark SSD products, TLC 256GB, was around USD 28.5 per unit from January to March, an increase of 12% compared to the previous quarter (October to December 2023).

The price of larger-capacity SSD (512GB) was around USD 53.5 per unit, a 10% increase from the previous quarter. Prices have seen consecutive increases for two quarters, implying an expansion of the growth rate compared to the 9% increase in the previous quarter. SSD wholesale prices are set once every season between memory manufacturers and buyers.

Most buyers show willingness to accept the price hike requests from the memory manufacturers for their sake of profit. According to Nikkei, citing a procurement manager from a certain PC manufacturer, the price increase is understandable given that various memory manufacturers are facing losses.

With an increase in market demand and the production reduction strategies of NAND Flash memory manufacturers since 2Q23, SSD prices begun to climb, experiencing significant increases in a relatively short period.

Regarding the upward trend in SSD prices, Phison Electronics’ Pua, Khein-Seng issued a warning in mid-March, stating that further increases in SSD prices could cause a decrease in demand. NAND Flash memory manufacturers should strive to increase production to meet market demand, rather than pare back production to achieve higher demand than supply.

Phison believes that as essential components for fabricating PCs, if memory device prices become too high, it may disrupt the progress of the PC market recovery in the context of a sluggish global economy, which may lead to a shrinkage in demand once again, and ultimately hinder the development of the NAND Flash memory industry.

Industry Urges Supply to Match SSD Demand

With global tech giants like NVIDIA and Tesla accelerating their expansion in artificial intelligence, market demand for storage devices has surged significantly. Major server companies like Dell Technologies and Hewlett Packard Enterprise (HPE) are competing to purchase SSD. Industry sources indicate that server operators, in order to expand memory capacity, have recently placed urgent orders, and some products are even facing shortages, prompting the manufacturers to consider expanding production.

Considering memory manufacturers’ moves, according to a report from “THE ELEC” in mid-March, Samsung Electronics’ NAND Flash factory in Xi’an, China, has resumed operations at a rate of around 70%. In 2H23, Samsung reduced the plant’s operating rate to 20-30%, marking the lowest point since the decline in memory prices and demand began in late 2022.

NAND Flash leading company Kioxia plans to adjust the production cutbacks strategy started in 2022 and increase output. Kioxia expects the utilization rate of its NAND factories to recover to around 90% by March 2024, depending on demand.

On March 27, Micron announced the groundbreaking of its new packaging and testing plant in Xi’an. The new plant is expected to start production in 2H25, and will gradually go into production in response to market demand.

According to TrendForce’s research on March 19th, against the backdrop of an ongoing increase in NAND Flash price lasting to 2Q24, some suppliers will struggle to reduce losses, lower costs, and return to profitability this year. Starting in March, Kioxia/Western Digital was the first to restore capacity utilization to nearly 90%, while other industry players have not significantly increased production scale.

TrendForce also mentioned that to meet the demand during busy season in 2H24, coupled with Kioxia/Western Digital’s low inventory levels, production expansion this time will mainly focus on 112-layer and some 2D products, which are expected to bear fruit this year and further drive the growth rate of NAND Flash industry supply bit to 10.9% in 2024.

In terms of process, as NAND Flash prices reverse in 2024, supplier inventory levels are gradually decreasing. To maintain long-term cost competitiveness, suppliers embarked on upgrading their processes. Samsung and Micron are the most active. It is estimated that the two companies’ output of processes above 200 layers will account for over 40% by 4Q24.

Kioxia and Western Digital’s production focus in 2024 remains on the 112-layer technology. With support from the Japanese government subsidies, equipment installation for 218-layer technology is expected to begin in 2H24, with more optimistic projections for 218-layer output in 2025.

In light of Kioxia’s current process development plan, products beyond 218 layers will directly advance to processes above 300 layers in hopes of accomplishing better cost structure and regaining a top position in both technology and cost aspects.

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• [News] Low-Price SSDs Disappearing? Three Major Manufacturers Rumored to Increase Prices by 50%

(Photo credit: Samsung)

According to a report from South Korean media outlet TheElec, Samsung’s Advanced Package (AVP) team has reportedly secured an advanced packaging order for NVIDIA’s AI chip, paving the way for future supply of NVIDIA’s high-bandwidth memory (HBM) chips.

The report, citing sources, reveals that Samsung Electronics’ Advanced Packaging team will provide interposer and 2.5D packaging technology for packaging NVIDIA’s AI processors. However, the HBM and GPU chips used in these NVIDIA AI processors will be supplied by others.

2.5D packaging technology enables the horizontal integration of chips like CPUs, GPUs, and HBMs on an interposer. Processors such as NVIDIA’s A100, H100, and Intel’s Gaudi all utilize this technology for packaging.

TSMC’s CoWoS advanced packaging facility utilizes 2.5D packaging technology, while Samsung Electronics employs their iCube technology, which also falls under the category of 2.5D packaging.

Over the past year, Samsung Electronics has been expanding its advanced packaging division by increasing personnel and developing its own interposer technology. They have also procured a large amount of 2.5D packaging equipment from Japanese semiconductor equipment suppliers such as Shinkawa and others.

The same report from TheElec also revealed that in the future, stacking eight HBM chips on a 12-inch wafer will require the use of 16 interposers. Therefore, Samsung Electronics is actively working to increase its silicon interposer production capacity.

Although Samsung Electronics has declined to comment on the rumors regarding NVIDIA’s packaging orders, industry speculation suggests a connection to insufficient capacity at TSMC’s CoWoS, compounded by recent earthquakes in Taiwan potentially further impacting TSMC’s CoWoS capacity. This has led to expectations of future growth in orders for Samsung Electronics’ Advanced Packaging Division.

Samsung Electronics’ plant located in Cheonan, South Korea, is where the company’s Advanced Packaging team is based. Recently, the production capacity at the Cheonan plant has reportedly been ramped up to full utilization, which is believed by industry observers to be one of the possible reasons why Samsung secured NVIDIA’s advanced packaging orders.

Previously reported by The Korea Times, Samsung Co-CEO Kye-Hyun Kyung stated that he expects the results of Samsung’s investment to come out in earnest from the second half of this year.

Kyung further noted that for a future generation of HBM chips called HBM4, likely to be released in 2025 with more customised designs, Samsung will take advantage of having memory chips, chip contract manufacturing and chip design businesses under one roof to satisfy customer needs.

TrendForce’s latest report reveals that in 2023, global foundry revenues hit US$117.47 billion, with TSMC accounting for close to 60% of the market share, while Samsung held approximately 11%.

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• [News] Samsung Reportedly Commits to Advanced Packaging, Targets Over USD100 Million in Related Revenue This Year
• [News] Samsung Accelerates 3D Packaging with Hybrid Bonding Production Line in Korean Advanced Packaging Hub

(Photo credit: Samsung)

Amid the overwhelming wave of Artificial Intelligence, the importance of advanced process chips is becoming increasingly prominent. Currently, the 3nm process is the most advanced node in the industry. Meanwhile, manufacturers such as TSMC, Samsung, Intel, and Rapidus are actively promoting the construction of 2nm wafer fabs. TSMC and Samsung previously planned to mass-produce 2nm chips in 2025, while Rapidus to begin trial production in 2025.

2nm Wafer Fabs to Complete Construction as Soon as this Year?

Recently, the Semiconductor Equipment and Materials International (SEMI) announced that it is expected that both TSMC and Intel will potentially complete the construction of 2nm wafer fabs by the end of this year.

Intel is anticipated to be the first to achieve commercialization of 2nm chips. The Intel PC CPU Arrow Lake product will utilize the 2nm process node. TSMC’s 2nm process is expected to be applied in Apple’s iPhone AP chips. Subsequently, TSMC’s 2nm capacity will soar up.

According to a report from Commercial Times the installation of equipment for TSMC’s 2nm process is accelerating. TSMC’s Fab20 P1 plant in Hsinchu, Baoshan is scheduled to install equipment in April this year, with pilot production expected to commence in 2H24 and small-scale production in 2Q25.

As for Intel, ASML already delivered the world’s first High Numerical Aperture (NA) EUV EXE:5200 to Intel in late 2023, supporting the latter in producing 2nm chips. Later, Intel kicked-start the calibration of lithography machine, which has been well on track.

Samsung and Rapidus all Set to Move

In terms of Samsung, its previously announced technology roadmap indicates that it will first mass-produce 2nm process chips for mobile terminals starting in 2025, followed by high-performance computing (HPC) products in 2026. It plans to expand to automotive chips by 2027.

Rapidus is setting up a 2nm chip fab in Chitose City, Hokkaido, Japan. Its pilot production line is scheduled to start operation in April 2025, aiming to commence mass production in 2027.

Recently, it’s reported that in order to promote the development of advanced wafer fabs in Japan, several Japanese manufacturers will supply products to Rapidus. Among them, Dai Nippon Printing (DNP) will begin mass production of masks for 2nm chips at its Fukuoka plant and other operations in Japan in 2027, which will be provided to Rapidus.

In addition to DNP, Japanese company TOPPAN Holdings is also collaborating with IBM to develop masks for 2nm chips and achieve mass production by 2026, and Rapidus is reportedly the purchaser. Moreover, companies like Tokyo Ohka Kogyo (TOK), JSR, Shin-Etsu Chemical are also expected to be the suppliers of Rapidus.

1nm Chip Plans Brought to Light

Following 2nm, 1nm chip will be the next target for wafer fabs. In light of manufacturers’ plans, the industry is expected to see mass production of 1nm-level chips from 2027 to 2030.

TSMC plans to reach the A14 node (1.4nm) in 2027 and the A10 node (1nm) in 2030. Recent reports from Economic Daily News indicated that TSMC intends to establish a factory in the Science Park of Taibao City, Chiayi County in central Taiwan to produce 1nm chips.

Samsung anticipates to launch the 1.4nm process by late 2027. It is reported that Samsung’s SF1.4 (1.4 nm) process can increase the number of nanosheets from 3 to 4, which is expected to significantly improve performance and power consumption.

Intel’s latest foundry roadmap shows that the Intel 14A (1.4nm-level) node will put into production in 2026, and Intel 10A (1nm-level) will start development or production in late 2027.