In a subdued environment for consumer electronic applications in the storage market, High Bandwidth Memory (HBM) technology is emerging as a new driving force, gaining significant attention from major players. Recent reports reveal that both Samsung and Micron are gearing up for substantial HBM production expansion.

Major Manufacturers Actively Investing in HBM

Recent reports indicate that Samsung has acquired certain buildings and equipment within the Cheonan facility of Samsung Display in South Korea to expand its HBM production capacity.

It is reported that Samsung plans to establish a new packaging line at the Cheonan facility for large-scale HBM production. The company has already spent 10.5 billion Korean won on the acquisition of the mentioned buildings and equipment, with an additional investment expected to range between 700 billion and 1 trillion Korean won.

Earlier, it was disclosed by Mr. Hwang Sang-jun, the Vice President of Samsung Electronics and Head of the DRAM Product and Technology Team, that Samsung has developed HBM3E with a speed of 9.8Gbps and plans to commence providing samples to customers.

Concurrently, Samsung is in the process of developing HBM4 with the objective of making it available by 2025. It is reported that Samsung Electronics is actively working on various technologies for HBM4, including non-conductive adhesive film (NCF) assembly techniques optimized for high-temperature thermal characteristics and hybrid bonding (HCB).

On November 6th, Micron Technology opened a new facility in Taichung. Micron has stated that this new facility will integrate advanced testing and packaging functions and will be dedicated to the mass production of HBM3E, along with other products. This expansion aims to meet the increasing demand across various applications such as artificial intelligence, data centers, edge computing, and cloud services.

Previously, Micron’s CEO, Sanjay Mehrotra, revealed that the company plans to commence substantial shipments of HBM3E in early 2024. Micron’s HBM3E technology is currently undergoing certification by NVIDIA. The initial HBM3E offerings will feature an 8-Hi stack design with a capacity of 24GB and a bandwidth exceeding 1.2TB/s.

Furthermore, Micron intends to introduce larger-capacity 36GB 12-Hi stacks HBM3E in 2024. In an earlier statement, Micron had anticipated that the new HBM technology would contribute “hundreds of millions” of dollars in revenue by 2024.

Shift Toward HBM3 Expected in 2024

According to TrendForce, the current mainstream technology in the HBM market is HBM2e. This specification is utilized by prominent players like NVIDIA with their A100 and A800, AMD with the MI200 series, and various custom system-on-chip designs by CSPs.

Simultaneously, in response to the evolving demand for AI accelerator chips, many manufacturers are planning to introduce new products based on HBM3e technology in 2024. It is anticipated that both HBM3 and HBM3e will become the dominant technologies in the market next year, catering to the requirements of AI accelerator chips.

The global smartphone market has seen a continuous decline for nine consecutive quarters, with only the foldable phone category remaining resilient and maintaining growth. Android smartphone manufacturers seem to view this category as a lifeline, having released a total of 13 new foldable phones in the past three months, setting a record for the number of new foldable phones introduced in half a year.

The intensified release of foldable phone models not only reflects the sense of urgency among smartphone manufacturers but also signifies a shift towards foldable technology in the mobile industry.

Currently, the foldable phone market is not as well-established as the traditional flat-screen market, presenting opportunities and variables. All Android manufacturers aim to leverage foldable phones to enhance their market positioning, achieve high-end differentiation, and engage in distinctive competition with Apple.

In fact, during the third quarter, there were subtle changes in the landscape of the foldable phone market in China according to IJIWEI’s report. Huawei, which once dominated the foldable phone market, has seen its market share decline. OPPO and Honor have managed to surpass Huawei in terms of sales volume in the flip-fold and single-product categories.

Next year, Huawei and Samsung plan to introduce more competitively priced foldable phones, and other Android manufacturers are expected to follow suit, driving accelerated expansion in the foldable phone market.

13 New Foldable Phones Launched in 3 Months

In the latter half of this year, smartphone manufacturers including Honor, OPPO, Xiaomi, Samsung, Huawei and Transsion, have been on a roll, releasing a remarkable 13 new foldable phones within just three months. This surge in foldable phone launches has almost doubled the number of foldable devices introduced in the first half of the year.

Each smartphone manufacturer has focused on different aspects of foldable phones. Honor has been particularly aggressive in the foldable phone market, introducing three new models in just four months, constantly pushing the boundaries of thinness. In July, Honor managed to reduce the thickness of foldable phones to the millimeter era with a body thickness of 9.9mm.

In September, the Honor V Purse, an outward folding phone, had a body thickness of 8.6mm in its folded state and weighed only 214g, once again setting a new record for slim foldable phones in the market. In October, the Honor Magic Vs2 weighed 229g, refreshing the record for slim large-sized inward folding phones.

On the other hand, OPPO and Xiaomi have emphasized the imaging performance of their foldable phones. In addition, Samsung, Huawei, Transsion, OnePlus, and other manufacturers have each introduced innovative models like the Galaxy Z Flip 5/Fold 5, Samsung W24/W24 Flip, OnePlus Open, Huawei Mate X5, and PHANTOM V Flip 5G, incorporating cutting-edge technology into foldable phones and significantly enhancing the foldable phone experience. This surge in foldable phone innovation has become one of the standout features in this year’s smartphone market.

Reasons for the Proliferation of Foldable Phones

Recent intense launches of new foldable phones by smartphone manufacturers reflect their strong sense of urgency in the Android market.

Global smartphone markets have been persistently sluggish, declining for nine consecutive quarters due to factors like inflation, market saturation, and longer upgrade cycles. Traditional flat smartphones are no longer able to drive sustained market growth, and the smartphone market is in need of new growth engines.

Foldable phones, with their differentiated form and innovative experiences, have the potential to stimulate consumer upgrades, and smartphone manufacturers have high hopes for them, leading to the frequent release of new foldable phone models.

Currently, foldable phones are considered high-end products, and the intense launch of new foldable phone models by Android smartphone manufacturers is aimed at achieving brand premiumization and establishing differentiation from Apple.

In an effort to break through the high-end market stronghold that Apple has established, Android smartphone manufacturers, led by Samsung, have not only upgraded their high-end flat smartphones but have also been actively promoting foldable phone innovations, different from the iPhone 15 series. They aim to stimulate consumer upgrades and attract more high-end users who value large-screen experiences.

Price Key to Boosting Foldable Smartphone Penetration

In recent months, Android smartphone manufacturers have been consistently releasing new foldable phone models, driving up foldable phone sales and contributing to increased market penetration in the high-end smartphone segment during the latter half of the year.

Supply chain sources have also revealed that Samsung is planning to bring foldable phones to the mid-range market next year, further reducing price barriers and making foldable phones more accessible to a broader range of consumers.

This year, the lowest price for foldable phones has already dropped to 3,659 yuan (RMB), setting a new record. In the upcoming year, more manufacturers will introduce higher-value foldable phone products, thus accelerating the broader adoption of foldable phones.

TrendForce believes that the driving force behind the foldable market’s expansion is the reduced costs and the expansion strategies of Chinese brands.

Looking at TrendForce’s estimated numbers , by 2023, shipments of foldable smartphones could skyrocket to an impressive 18.3 million units, marking a 43% YoY surge. However, this only captures a slim 1.6% of the year’s total smartphone market. Fast forward to 2024, a 38% growth is anticipated, translating to a hefty 25.2 million units and nudging the market share up to 2.2%.

Looking at the medium to long term, TrendForce believes the expansion of the foldable smartphone market is inevitable. By 2027, shipments could soar to a whopping 70 million units, seizing around 5% of the global smartphone market.

At the same time, foldable phone manufacturers are exploring new product forms and driving advancements in end-user applications. While there are certain limitations in terms of size for dual-foldable screen phones, many companies have already started working on triple-foldable screen products.

Recent reports from industry insiders suggest that Huawei’s development of a triple-foldable screen phone is progressing smoothly and may be ready for launch before March next year. It’s expected that two triple-foldable screen phones will be introduced in 2024.

On the other hand, Apple’s strategy for foldable devices differs from many Android phone manufacturers, as they are more focused on mature products and not in a hurry to release foldable phones.

According to TrendForce’s research, to date, Apple’s foray into foldables has been tepid due to Apple’s unwavering obsession with user experience.

Persistent challenges with foldable tech—think panel evenness and hinge design—might be holding them back. Still, achieving perfection with larger foldable panels is somewhat simpler than their smaller counterparts. The possibility for Apple to leapfrog right into medium-sized foldable products – like laptops or tablets – still remains.

(Photo credit: Phantom)

Non-Apple IC manufacturers are reporting positive business performance this quarter. Chinese brands are experiencing a revival driven by the release of new Huawei smartphones, and a resolution in inventory clearance in emerging markets. This has led to an increase in orders. Additionally, Samsung’s success in foldable phones is contributing to the upsurge. This overall trend is benefiting companies like MediaTek and Novatek in the smartphone-related IC manufacturing sector.

As reported by CTEE, China holds about 25% of the global smartphone market, with industry analysts predicting sales of 260 million units in China for 2023. Huawei’s re-entry into the smartphone market will significantly impact the smartphone SoC market share in 2024. This development will challenge Apple’s market share in China, and Huawei’s upcoming Nova mid-range smartphones will also affect brands like Honor, OPPO, Vivo, Xiaomi, and others, as they vie for market share.

Key drivers of the smartphone industry’s recovery

According to Economic Daily News, many Chinese smartphone brands are optimistic about the local market’s improvement following the launch of Huawei’s new smartphones. Beyond flagship models like the Mate 60, mid-range series like Nova are also showing increased activity. Leading non-Apple smartphone manufacturers are gearing up for a surge in demand and are actively stocking up on top-tier flagship chips, thus stimulating the supply chain’s demand for additional orders.

At the same time, Taiwanese manufacturers mention that Chinese smartphone brands that primarily target emerging markets have already digested their accumulated inventory and are now starting to replenish their stocks. Some smartphone-related chip manufacturers have also pointed out that Samsung and other Korean smartphone giants are enjoying good sales of foldable phones and have recently conveyed messages about increasing orders.

TrendForce notes that the current revival on demand side in the global smartphone market is primarily driven by inventory restocking. The potential for sustained orders remains uncertain due to the prevailing economic challenges.

(Image: MediaTek)

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• [News] Industry Insiders Report Huawei’s Target of Shipping 100 Million Smartphones Next Year
• [News] Xiaomi’s Second Chip Company Founded with a Capital of 3 Billion Yuan
• OLED Penetration in Smartphones to Exceed 50% in 2023

According to TechNews’ report, Gitae Jeong, Vice President of Samsung Electronics, recently revealed in an interview that the company is set to introduce the SF1.4 (1.4nm) process, expected to enter mass production in 2027.

This announcement intensifies the competition in advanced semiconductor manufacturing, particularly in the development of 2.5D/3D integrated heterogeneous structure packaging among the three major semiconductor foundry giants.

• TSMC: N3P Process Superior to Intel 18A, N2 to Lead Industry’s Advanced Processes

Previously, the semiconductor industry reported challenges with both TSMC and Samsung achieving yields above 60% for their 3nm processes due to undisclosed issues. TSMC’s yield was reported to be only 55%, below the normal yield rate.

However, TSMC’s President, C.C. Wei, expressed optimism, stating that current N3 demand is better than three months ago, contributing to a healthy growth outlook for TSMC in 2024.

Wei also anticipates that TSMC’s 3nm process will contribute a mid-single-digit percentage (4%-6%) to the company’s annual wafer revenue in 2023.

Regarding competition with rival Intel’s 18A process, Wei believes that TSMC’s N3P process offers better performance, power, and area (PPA), alongside improved cost efficiency and technical maturity. Furthermore, TSMC’s upcoming N2 process is expected to be the industry’s most advanced when introduced.

• Intel: Striving for the Fourth Customer for 18A Process Outsourcing Orders

Intel’s CEO, Pat Gelsinger, has revealed that the 18A process has secured orders from three customers and aims to acquire a fourth customer by the end of the year. The advanced 18A process is scheduled to begin production at the end of 2024, with one customer already having made an advance payment. External expectations suggest that the customer could possibly be NVIDIA or Qualcomm.

Intel has stated that Intel 4 and Intel 3 processes are similar, as are Intel 20A and Intel 18A processes. Consequently, Intel’s primary focus will be on offering Intel 3 and Intel 18A to semiconductor foundry customers. Meanwhile, Intel 4 and Intel 20A processes are more likely to be used internally. However, Intel is open to accommodating customer requests if they express interest in adopting these later processes.

• Samsung: Commencing Mass Production of SF2 in 2025, Prioritizing Internal Use

Due to challenges with the three-nanometer (3nm) manufacturing process, there have been reports that Samsung plans to shift directly to the more advanced two-nanometer (2nm) process.

According to Samsung’s Foundry Forum (SFF) plan, they will begin mass production of the 2nm process (SF2) in 2025 for mobile applications, expand to high-performance computing (HPC) applications in 2026, and further extend to the automotive sector and the expected 1.4nm process by 2027.

Similar to Intel, Samsung intends to prioritize the production of its own products using the 2nm process. The 2nm process products will initially be utilized for Samsung’s in-house products rather than external customer products.

• Summary

While TSMC’s N3 series currently enjoys broad support, including N3E, N3X, and N3P process series, the move to 2nm introduces new variables as it adopts a completely new GAAFET architecture. Regardless, whether it’s TSMC’s N2, Intel’s 18A, or Samsung’s SF2, each of them possesses its competitive strengths. The industry is also eagerly anticipating the future developments in advanced semiconductor processes.

Read more

• [News] Progress and Adoption of Advanced Processes by Samsung, Intel, and TSMC

In the fourth quarter, Qualcomm reported a year-on-year revenue decline of 24%, amounting to $8.67 billion for the period ending on September 24. Nevertheless, this figure exceeded the market’s projected $8.51 billion. Akash Palkhiwala, CFO of Qualcomm, stated that the smartphone market is showing signs of stabilization, and Qualcomm’s chip sales are on the path to recovery.

CEO Cristiano Amon further elaborated that most smartphone companies have successfully bring up their inventory and are now placing new orders. He expressed, “we are cautiously optimistic as we go forward with that stabilizing and the normalization of Android channel inventory.”

According to reports from China Times, Huawei, once a former client of Qualcomm, has ventured into designing and producing its smartphone chips, thus emerging as a new competitor for Qualcomm. Amon emphasized that he thought Huawei’s return to the market will affect very small to Qualcomm’s relationships with other Chinese smartphone manufacturers. CFO Palkhiwala indicated that sales to Chinese smartphone clients are expected to grow by 35% compared to the previous quarter.

Notably, Qualcomm’s prominent client, Samsung Electronics, continues to rely on Qualcomm chips for the majority of its recent devices. Amon confirmed that Qualcomm will continue to dominate the chips used in Samsung’s upcoming S24 series of smartphones. Financial analyst Logan Purk from Edward Jones highlighted that the resurgence in demand for Android smartphones is closely tied to the significant growth in demand from Chinese OEM manufacturers. This may be a key factor contributing to Qualcomm’s consistent performance and improved outlook for the next quarter.

TrendForce, focusing on the smartphone industry, analyzed that the completion of inventory adjustments by leading process manufacturers is set to stimulate activity for upstream foundries. However, when it comes to the overall recovery of the smartphone market, there are still many uncertainties present, such as ongoing conflicts, the economic revival of major powers, and geopolitical factors. Even though the market has shifted from an extremely pessimistic outlook, there is still no clear signal supporting an optimistic and upward trend. Consequently, a slight growth of approximately 3% over the course of the year is expected.
(Image: Qualcomm)