The iPhone 13 series, which is about to be formally announced by Apple, has already had its exterior design speculated on by various media outlets and fans alike. TrendForce’s latest investigations indicate that some of the notable hardware upgrades of the iPhone 13 pertain to the SoC (manufactured at the 5nm+ node, which enables improved performance and decreased power consumption), display, and camera. In addition, iPhone handsets featuring support for 5G mmWave will be available for sale in more countries after the release of iPhone 13.

The iPhone 13 will see a shift in its charging circuit board from the previous rigid-flex PCB design to a new design featuring SiP combined with flexible PCB. The space-saving feature of this new design will also likely result in increased battery capacity. As for retail prices, the iPhone 13 series is expected to remain similar to the iPhone 12 series assuming Apple is able to effectively control manufacturing costs, since the latest models do not come with significant hardware upgrades. As a result of this aggressive pricing scheme, iPhone shipment will likely maintain its growth trajectory for two consecutive years.

Huawei’s plight led to Apple’s rising market share in the Greater China region

Owing to heavy competition from Chinese brands, sales in the Greater China region accounted for a decreasing share of Apple’s iPhone revenue, from 19.44% in 2017 down to merely 16.33% in 2020. Nevertheless, this downtrend has been gradually reversing since 4Q20, primarily because of increased sanctions against Huawei.As Huawei was cut off from its chip supply in 4Q20, shipment of Huawei smartphones underwent a massive decline accordingly, in turn leaving vacancies in the flagship smartphone market in China. At the same time, while Apple released its new iPhone 12 models, flagship smartphone buyers in China began purchasing iPhones instead. Thanks to this shift, sales in the Greater China region began accounting for a growing share of Apple’s iPhone revenue, from 14.8% up to 19.13% in 4Q20. Since 4Q20, this figure has remained above 18% for three consecutive quarters.

Prior to being sanctioned by the US government, Huawei had enjoyed the highest market share in the high-end smartphone segment in China. After the sanctions were put into place, this segment then became highly sought after by other smartphone brands. However, because other Chinese brands had not previously placed significant emphasis on the high-end market, the iPhone was able to seize most of the market share in the high-end segment left in Huawei’s wake. Furthermore, although other Chinese smartphone brands have started developing their respective flagship models, it takes considerable time to build up their brand images in this segment and attract customers. TrendForce therefore believes that the iPhone will continue to dominate the high-end smartphone market in China for the next two to three years.

iPhones are expected to account for 16.7% of global smartphone shipment in 2021

An overview of iPhone shipments for the past few years shows that iPhone shipment went into a nosedive starting in 4Q18 because the iPhone XS/XR series featured limited improvements yet a significant price hike over its iPhone 8/X predecessor. Alarmed by this decline, Apple immediately revamped its sales strategy for the next-gen iPhone 11, which not only underwent a total overhaul in terms of specs but also experienced a price cut of US$50 for the entry-level model (the Pro model retained its previous-gen equivalent’s price). Apple subsequently released the brand-new iPhone SE in 2020, thereby reversing the downward trajectory of iPhone shipment as a result.

New iPhones saw a deferred released schedule in 2020 owing to the impact of the COVID-19 pandemic, which led to a 14% YoY decrease in iPhone shipment for 3Q20. However, as the new iPhone 12 models equipped with across-the-board hardware upgrades, including 5G functionality, were released in 4Q20, iPhone shipment saw a massive rebound during the quarter and reached a 12% YoY increase in 4Q20 and a further increase of 42% YoY in 1Q21.

Looking ahead to the shipment volumes of the new iPhone models for 2H21, TrendForce expects Apple to maintain its aggressive pricing strategy in order to boost shipment. In addition, as the iPhone 13 series will once again return to a September release, total iPhone shipment is expected to undergo a 30% YoY increase in 3Q21, but a 5% YoY decrease in 4Q21. As such, iPhone sales for 2H21 will likely surpass 2H20 figures. For 2021, iPhones are expected to account for 16.7% of all smartphone shipment, which is a step-up compared to last year.

（Cover image source: Pexels）

While the server industry transitions to the latest generation of processors based on the x86 platform, the Intel Ice Lake and AMD Milan CPUs entered mass production earlier this year and were shipped to certain customers, such as North American CSPs and telecommunication companies, at a low volume in 1Q21, according to TrendForce’s latest investigations.

These processors are expected to begin seeing widespread adoption in the server market in 3Q21. TrendForce believes that Ice Lake represents a step-up in computing performance from the previous generation due to its higher scalability and support for more memory channels. On the other hand, the new normal that emerged in the post-pandemic era is expected to drive clients in the server sector to partially migrate to the Ice Lake platform, whose share in the server market is expected to surpass 30% in 4Q21.

Volume ramp of CPUs based on the Eagle Stream platform will likely take place in 2Q22, while AMD is expected to reach a 15% share in the server market next year

Regarding the mass production schedule of Intel CPUs based on the next-gen Eagle Stream platform, volume ramp is expected to occur in 2Q22. These processors, which feature embedded HBM, comprise a much more diverse product lineup compared to the previous generation. Although Intel’s 2Q22 target represents a slight delay from the market’s previous expectation of a 4Q21 ramp-up, Eagle Stream CPUs will enter the final product qualification stage at the end of 4Q21, after which Intel will begin provisioning certain leading customers with a small batch of these CPUs in 1Q22, according to TrendForce’s survey of server ODMs. As such, the mass production schedule of Sapphire Rapids will likely resemble the release of Ice Lake server processors earlier this year.

Genoa CPUs, AMD’s competitive equivalent of the Intel Eagle Stream, are expected to enter mass production on a similar schedule, since AMD’s wafer starts at the 5nm node have been relatively low-volume. AMD’s server processors manufactured at the 14nm node and below have the competitive advantage in terms of price-to-performance, core count, and interface support.

Furthermore, after progressing to the 7nm node, these processors have been seeing gradually increased adoption by various public cloud service providers, including Google Cloud Platform, Microsoft Azure, and Tencent, throughout 2021. AMD CPUs have currently surpassed a 10% penetration rate in these three CSPs’ servers. Going forward, AMD will begin inputting wafers at the 5nm node at the end of 2021 in order to further optimize its processors’ cost, power consumption, and performance. TrendForce therefore expects AMD CPUs to reach a 15% share in the global server market in 2022.

While the ARM architecture is starting to gain popularity, ARM chips are mostly built-to-order due to the relatively small scale of client demand

Processors based on the ARM architecture began seeing increased market penetration this year, with AWS’ self-designed Graviton chips enjoying the greatest market share. In addition, Ampere and Marvell have also been releasing more agile and flexible ARM-based server processors, validation for which by CSPs is expected to kick off in 4Q21. The server market, however, is still dominated by x86 processors, which currently account for 97% of total server processor shipments.

In particular, AMD has transitioned most of its server offerings to processors manufactured at the 7nm and 7nm+ nodes by increasing wafer inputs at these nodes and replacing its old 14nm product lineups. This transition has paid off, as some of AMD’s clients have gradually become receptive to these new products. On the other hand, ARM- and RISC-based processors are currently built to order, mostly for the data center market. TrendForce therefore believes that ARM CPUs will not be competitive with x86 CPUs in the server market before 2023.

Support will extend to include PCIe G5 and DDR5 RDIMM, while CXL will improve memory performance

It should be noted that Intel as the dominant leader in the market for x86 server CPUs has decided to have Eagle Stream support CXL (Compute Express Link). This interface further optimizes the memory coherence between the CPU and the memory components to which the CPU is connected. The processor platform thus has the ultimate function of establishing a memory pool for all computing units within the server through memory virtualization, even though this function is not notably emphasized in the initial establishment of the product specifications, which originally sought to enable high-bandwidth and low-latency data transfer for the CPU.

The memory pool, in turn, enhances the interconnections (or the data transfer efficiency) among the CPU, memory, GPU, ASIC, FPGA, etc. The new CXL interface will be able to offer significant improvements in terms of dealing with heavier workload in the future and conducting heterogeneous computing. Moreover, CXL will be able to overcome the limits imposed on the current hardware architecture with respect to data transfer and thereby enable more effective integrated computing capability.

The build-out of data centers continues to grow because of the emergence of applications related to AI and Big Data. Furthermore, the demand for larger cloud storage capacity has massively expanded as a result of enterprises’ increasingly rapid digital transformation efforts in the post-pandemic world. At the same time, with the increase in CPU core count, how to raise computing performance via memory optimization has now become an important issue. Eagle Stream can resolve this bottleneck by extending support to PCIe G5 for the SSD interface technology.

Compared with its predecessor, PCIe G5 offers twice the data transfer rate. Therefore, hyperscalers are eager to adopt SSDs based on this standard. As for DRAM, both Eagle Stream and Genoa extend support to the next-generation DDR5 server DRAM, which delivers a faster data transfer rate, making these new server CPUs superior to Ice Lake in all respects. NAND Flash and DRAM suppliers have made plans to commence mass production of PCIe G5 SSDs and DDR5 RDIMMs at the end of 2Q22 in anticipation of demand generated by the release of the Eagle Stream and Genoa platforms for these next-gen products.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

（Cover image source: Intel Newsroom）

Suppliers and clients in the server DRAM market are still having difficulty in reaching agreements on prices for 3Q21 contracts even though the quarter is well underway, according to TrendForce’s latest investigations. Hence, server DRAM contract prices are much more varied than before. Regarding the price trend in July, contract quotes for the mainstream 32GB RDIMMs rose by 5-7% MoM.

However, the price hikes have led to a reduction in demand, and there are indications that server DRAM sales bits will register some decline for 3Q21. The release of server CPUs based on the new platforms is driving the procurement of higher-density 64GB RDIMMs, but this has not resulted in a significant corresponding increase in content per unit. The general trend for buyers is to replace two 32GB modules with one 64GB module, rather than a one-to-one replacement as DRAM suppliers previously expected. Contract prices of 64GB RDIMMs rose by 5-7% MoM for July, though prices were below this range for some transactions.

TrendForce’s analysis shows that server DRAM suppliers and buyers are finding it difficult to reach a consensus on prices because DRAM suppliers expect that the demand for server DRAM modules is going to surge in 3Q21 as the third quarter is the traditional peak season for the server market. As well, suppliers also anticipate that the adoption of new server processor platforms will increase the memory content in servers.

With a more optimistic demand outlook, suppliers have adjusted their product mixes to allocate more of their production capacity to server DRAM. Hence, the supply fulfillment rate has risen significantly in the server DRAM market in 3Q21. Server DRAM buyers, on the other hand, already have a high level of inventory. Clients in the data center segment were aggressively stockpiling during the first half of this year due to worries about the impact of the COVID-19 pandemic on the supply chain. They now need some time to consume their inventories and are reluctant to procure more DRAM modules.

Contract prices will be constrained to rise further in 4Q21 as demand side has turned conservative

Currently, enterprise server OEMs in North America have finished arranging their quarterly contracts, whereas numerous cloud service providers and Chinese enterprise server OEMs are still in the midst of negotiations. TrendForce believes that, in order to reach their targets for sales and shipments, server DRAM suppliers may be willing to cut more “special deals” for server DRAM products in August. Specifically, suppliers will push for lock-in contracts that offer adjustable prices for fixed quantities.

On the whole, the general behaviors of DRAM buyers with regards to procurement have changed noticeably form the first half of this year. As the demand related to servers, PCs, and other major applications slows down, the whole DRAM market will gradually shift to the state of oversupply. Since the DRAM market is an oligopoly, the major suppliers will still have significant leverage in price negotiations. Quotes for server DRAM products could therefore rise further by 5-10% QoQ in 3Q21. However, given that prices have yet to be finalized for a substantial portion of 3Q21 contracts, the transaction volume is also very limited. This, in turn, will inevitably create a lot of uncertainties with respect to the price trend in 4Q21.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

Now that most negotiations over contract prices of PC DRAM for 3Q21 have concluded, DRAM suppliers’ low inventories and the arrival of the peak season for DRAM procurement have resulted in a 3-8% QoQ increase in PC DRAM contract prices for 3Q21, although this is a relatively muted growth compared to the 25% increase experienced in 2Q21, according to TrendForce’s latest investigations.

However, demand for PC DRAM in the spot market began to show signs of bearish movement in early July ahead of time, as DRAM suppliers continued to lower prices in order to adjust their DRAM inventories. Regarding the contract market, PC OEMs currently carry relatively high levels of DRAM inventory because they substantially stocked up on PC DRAM beforehand in anticipation of an upcoming shortage. Not only has PC OEMs’ high DRAM inventory put downward pressure on possible price hikes for PC DRAM, but the gradual lifting of COVID-related restrictions in Europe and the US will also likely lower the overall demand for notebook computers, thereby pulling down the overall demand for PC DRAM. TrendForce therefore forecasts a 0-5% QoQ decline in PC DRAM contract prices for 4Q21.

Regarding spot prices of DRAM modules, most major module suppliers have also started to lower prices in an attempt at inventory reduction, leading to a persistent downward trend for spot prices of PC DRAM modules throughout August. According to TrendForce’s findings, this decline in spot prices of mainstream PC DRAM modules, which began on May 20th, accumulated to 32% as of August 3. Furthermore, spot prices of PC DRAM modules have, for the first time in 2021, now fallen below contract prices for 3Q21 by almost as much as 20% and are unlikely to experience a price hike in the short run.

Since PC OEMs still keep a high inventory of PC DRAM, their upcoming procurement activities for PC DRAM will likely remain sluggish

An overview of the PC DRAM market throughout 2021 shows that, as the COVID-19 pandemic reached its peak in 2Q21, most purchasers aggressively stocked up on various components, including memory solutions, in order to avoid possible shortages, and these stock-up activities were particularly bullish in the PC market. As a result, PC DRAM prices underwent a massive 25% increase in April, and demand bits also saw a surge during the quarter.

Moving into 3Q21, buyers and sellers in the PC DRAM and server DRAM markets found it difficult to reach an agreement while negotiating over contract prices throughout the end of July. As such, the increase in PC DRAM prices for 3Q21, along with the increase in PC DRAM sales bits, is significantly weaker compared to 2Q21. In addition, TrendForce indicated at the end of June that most PC OEMs were carrying about 8 to 10 weeks’ worth of PC DRAM inventory, with some even surpassing 10 weeks. Their inventories have not undergone significant improvements as of early August. As these PC OEMs gradually take delivery of DRAM they procured for 3Q21, some of them now carry inventories exceeding 12 weeks’ supply. TrendForce therefore believes that the persistently growing inventories of PC OEMs will likely result in a further weakening of PC DRAM contract prices in 4Q21.

Looking ahead to 4Q21, TrendForce expects PC shipment, particularly Chromebook shipment, to remain in a downward trajectory following increased vaccinations in Europe and the US. The latest data show that branded Chromebook shipment peaked in 2Q21 and subsequently underwent monthly declines following this peak. Furthermore, the overall demand for notebook computers has started waning as the general public resumes its day to day activities, such as a return to offices and schools, in light of the gradual lifting of COVID-19 restrictions in Europe and the US. Hence, TrendForce believes that, despite the cyclical upturn of the notebook market in 4Q21, as well as the commercial segment’s replacement demand, ODMs will likely continue to cut back on notebook production on a quarterly basis, in turn decreasing the overall demand for PC DRAM.

Prices of both consumer DRAM and graphics DRAM are expected to enter into a downturn in 4Q21 owing to weak supply and demand

In sum, the sufficiency ratio of PC DRAM increased from -1.13% in 3Q21 to 0.28% in 4Q21. Hence, TrendForce expects contract prices of PC DRAM to take a downward turn in 4Q21, while prices of DDR4 consumer DRAM, which are highly correlated with PC DRAM prices, will likely undergo a similar decline. Likewise, contract prices of graphics DRAM are expected experience a looming decline as well, since the sudden cryptocurrency downturn resulted in a corresponding plummet in cryptocurrency mining demand and, by extension, spot prices of graphics DRAM, which is used in cryptocurrency mining equipment.

Regarding server DRAM, contract prices are expected to mostly hold flat, without noticeable hints of price hikes, in 4Q21. This trend can be attributed to the server industry’s migration to Intel’s new Ice Lake platform, which has been steadily rising in terms of penetration rate, as well as the fact that demand for servers has yet to weaken. However, MoM declines in server DRAM contract prices may potentially take place in November and December. Likewise, mobile DRAM prices are expected to remain relatively unchanged in 4Q21 compared to the previous quarter. The profitability and ASP/Gb of this product category are relatively lower compared to other DRAM products, such as PC DRAM and server DRAM, and it did not experience as much of an uptrend during the prior quarters. Hence, while PC DRAM prices are expected to decline in 4Q21, mobile DRAM prices will remain sustainable, without undergoing a similar decline.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com

After Malaysia extended its MCO (movement control order) 3.0, the Filipino government also announced the implementation of ECQ (enhanced community quarantine) measures in Metro Manila until August 20 in response to the Delta variant’s rapid spread in Southeast Asia that began in July. According to the August edition of TrendForce’s MLCC Market Bulletin, Japanese MLCC supplier Murata operates a manufacturing facility in Tanauan City, primarily for large-sized automotive MLCC (0.06 x 0.03 inches to 0.12 x 0.06 inches) production.

This facility manufactures capacitors that meet the auto industry’s requirements of high capacitance, high voltage, and high temperature tolerance, and its monthly automotive MLCC production capacity accounts for about 18% of the industry total. As demand from the automotive market increases, Murata’s Tanauan-based facility is expected to maintain a high capacity utilization rate going forward.

Samsung likewise operates an MLCC manufacturing facility in the Philippines, albeit in Calamba City. While the Calamba facility is primarily responsible for manufacturing normal MLCC (which are low-end and mid-range MLCC with standardized size/specs), its monthly normal MLCC production capacity accounts for 15% of the industry total and is second only to Samsung’s Tianjin-based facility. As well, the Calamba facility operates at a capacity utilization rate of more than 90%.

TrendForce’s findings indicate that the aforementioned facilities are located approximately 67 km south of Manila and therefore do not fall under the ECQ order as yet. The two facilities are operating and shipping as normal. However, should the emergency implementation of ECQ in Metro Manila fail to contain the Delta variant, the pandemic would likely to make its way south, in turn affecting the two facilities. Both Murata and Samsung are on high alert against such an eventuality. On the other hand, given that Malaysia has yet to recover from the ongoing pandemic and lift its MCO 3.0 restrictions, Taiyo Yuden’s Malaysia-based MLCC manufacturing facility is operating at 80-85% capacity. The resultant shortfall of high-end MLCC supply will likely make it difficult for ODMs to procure sufficient high-end MLCC in 3Q21.

Various governments in Southeast Asia have implemented nationwide or regional lockdowns as well as movement control orders in order to curb the spread of the pandemic. As such, MLCC suppliers including Taiyo Yuden, Murata, and Samsung, all of which have facilities located in Malaysia and the Philippines, are now confronted with an increasing risk of uncertainties regarding their production capacities and shipment schedules. Looking ahead into the peak procurement period of 3Q21, TrendForce expects some ODMs to redirect their low-end and mid-range MLCC orders to Taiwanese suppliers such as Yageo and Walsin in the short run.

Recent reemergence of COVID-19 in China threatens the lifeblood of MLCC production

Home to 55% of the world’s MLCC production bases, China has seen a reemergence of the pandemic in August in Nanjing and Zhangjiajie. It should be pointed out that Murata and Yageo operate major MLCC manufacturing facilities in Wuxi and Suzhou, which, much like Nanjing, are also located in the province of Jiangsu. Should the pandemic continue to worsen in China, the global supply of MLCC would undoubtedly sustain significant damage as a result. Despite China’s aggressive efforts to contain the pandemic through comprehensive population testing and movement controls, the spread of the Delta variant still poses a global threat. Therefore, aside from the current state of disease containment in Southeast Asia, how China manages its pandemic situation will become another vital point of observation for the MLCC market.

For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at lattechung@trendforce.com