Global DRAM revenue reached US$17.65 billion, a 1.1% increase YoY, in 4Q20, according to TrendForce’s latest investigations. For the most part, this growth took place because Chinese smartphone brands, including Oppo, Vivo, and Xiaomi, expanded their procurement activities for components in order to seize the market shares made available after Huawei was added to the Entity List by the U.S. Department of Commerce. These procurement activities in turn provided upward momentum for DRAM suppliers’ bit shipment. However, clients in the server segment were still in the middle of inventory adjustments during this period, thereby placing downward pressure on DRAM prices. As a result, revenues of most DRAM suppliers, except for Micron, remained somewhat unchanged in 4Q20 compared to 3Q20. Micron underwent a noticeable QoQ decline in 4Q20 (which Micron counts as its fiscal 1Q21), since Micron had fewer work weeks during this period compared to the previous quarter.

Demand for PC, mobile, graphics, and consumer DRAM remains stable throughout 1Q21. As for clients in the server segment, they have now reinitiated a new round of procurement for server DRAM after adjusting their inventories during the two previous quarters (3Q20 and 4Q20). These aforementioned factors, in addition to Micron’s power outage at the start of December last year, resulted in a price hike across all DRAM product categories in 1Q21. TrendForce expects DRAM bit supply to remain unchanged and prices to enter an upturn compared with 4Q20. However, as 1Q21 is the first quarter of the upturn in the DRAM market, and demand is yet to emerge out of the off-season, any growth in bit shipment and prices is expected to be modest, with only a slight QoQ increase in global DRAM revenue compared to 4Q20.

Suppliers’ profits were constrained by persistent declines in DRAM prices in 4Q20

With regards to revenue, the performances of Korean DRAM suppliers and that of Micron once again diverged from each other in 4Q20. This difference can mostly be attributed to the fact that, as previously mentioned, Micron had 13 work weeks in 4Q20 (which it refers to as its fiscal 1Q21) compared to the previous quarter, which contained 14 work weeks and therefore was a higher base for QoQ comparison. As such, Micron’s 4Q20 DRAM bit shipment and ASP both fell short of 3Q20 figures. Conversely, although Korean suppliers likewise experienced a QoQ decline in DRAM ASP, they were able to increase their bit shipment, indicating that their client demand was recovering during this period. Samsung and SK Hynix both increased their bit shipment by a wider margin than previously expected. This was enough to offset the downward pressure on revenue caused by the decline in the two companies’ DRAM quotes. In 4Q20, Samsung and SK Hynix each recorded a 3.1% and 5.6% QoQ increase in revenue, while Micron’s revenue declined by 7.2% due to the corresponding decline in its quarterly bit shipment. Micron’s market share also subsequently fell to 23% in 4Q20. Moving to 1Q21, however, Micron is likely to catch up to its Korean competitors in terms of market share, owing to Micron’s pricing strategies, which are the most aggressive among DRAM suppliers, as well as to a general upturn in DRAM quotes.

With regards to profits, all suppliers experienced a decline in 4Q20 as a result of the 5-10% QoQ decline in DRAM ASP. In particular, Samsung’s operating profit margin fell from 41% in 3Q20 to 36% in 4Q20, while SK Hynix likewise showed a decline from 29% in 3Q20 to 26% in 4Q20. For the September-November fiscal quarter (Micron’s own fiscal 1Q21), Micron posted a similar decline in DRAM ASP compared to that of its Korean competitors, as well as a decline in operating profit margin from 25% in 3Q20 to 21% in 4Q20. Taken as a whole, DRAM suppliers were unable to make up for the drop in DRAM quotes with cost-optimization measures. Looking ahead to 1Q21, on the other hand, TrendForce expects DRAM quotes to rebound from rock bottom, in turn generating some upward momentum for suppliers’ profitability to rebound from rock bottom as well. These events will officially mark the cyclical upturn in DRAM prices. It should also be pointed out that, for instance, leading supplier Samsung still retains at least a 30% profit margin even at the lowest level of quotes, while this figure is closer to 10% for Nanya Tech, which is comparatively smaller in scale as a company. These margins suggest that the DRAM industry will be able to maintain its profitability due to its oligopolistic nature, at least prior to the entrance of emergent suppliers from China.

With regards to Taiwanese suppliers, Nanya Tech also increased its bit shipment while its quotes fell compared to 3Q20, resulting in a slight QoQ decline of 0.7% in revenue in 4Q20. Along with falling quotes, Nanya Tech’s operating profit margins narrowed from 13.5% in 3Q20 to 8.8% in 4Q20. As for Winbond, NOR Flash products accounted for an increasing percentage of its total revenue, mostly at the expense of its NAND Flash business, in 4Q20. However, its DRAM revenue underwent a slight QoQ growth of 0.8% during this period due to an early upturn of the specialty DRAM market. This growth was relatively limited due to Winbond’s limited DRAM bit supply rather than low client demand. PSMC’s DRAM revenue includes only its in-house PC DRAM products. The company’s DRAM revenue declined by about 1.7% QoQ in 4Q20 because its production capacity for DRAM was crowded out by other logic ICs in relatively high demand, including PMICs (power management IC), driver ICs, and CIS.

TrendForce indicates that, going forward, the three Taiwanese suppliers are still placing a heavy emphasis on their strongest products while furthering their own respective competitive advantages in the industry. For instance, Nanya Tech has been actively developing its 1A/1Bnm process technologies, with the goal of submitting samples to its partners by the end of 2021. Winbond, on the other hand, is continuing to improve the yield rate of its new 25nm DRAM process technology and expand its production capacity to meet the high demand for NOR Flash memories. Finally, PSMC will continue to maintain fully loaded wafer capacity for logic ICs, which are products with relatively higher gross margins, given the high demand for such products at the moment.

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

The quarterly total revenue of the NAND Flash industry came to US$14.1 billion in 4Q20, showing a QoQ drop of 2.9%, according to TrendForce’s latest investigations. The total bit shipments of the NAND Flash industry in 4Q20 registered a QoQ increase of nearly 9%. This gain for the most part offset the negative impacts brought about by the QoQ decline of nearly 9% in the overall ASP of NAND Flash products, as well as by the unfavorable exchange rates that impaired some suppliers’ performances. At the same time, clients in the server and data center segments continued their inventory reduction efforts that had begun in 3Q20. Since their procurement drive remained fairly weak, contract prices of NAND Flash products continued their decline as well. However, NAND Flash suppliers were receiving substantial orders from OPPO, Vivo, and Xiaomi. On the whole, the strong demand in the smartphone segment mostly compensated for the weak demand in the server and data center segments. In the notebook computer segment, Chromebook devices were the primary sales driver, but the storage components of most Chromebooks are low-density solutions, meaning related NAND Flash demand is somewhat limited.

Turning to 1Q21 (this quarter), the bit output of the NAND Flash industry continues to grow significantly due to two factors. First, Samsung and YMTC are actively expanding production capacity. Second, all suppliers are eager to migrate to the more advanced stacking process. On the demand side, PC and smartphone brands have kept stocking up on components. However, they have also slightly corrected down their demand as the first quarter is the traditional off-season. As for clients in the server and data center segments, they have yet to restart large-scale procurement even though their inventories have generally returned to a healthy level. As such, during price negotiations, NAND Flash suppliers still expect the oversupply situation in the market to intensify and thereby further drive contract prices of NAND Flash products downward. Therefore, NAND Flash suppliers’ revenues are projected to undergo a QoQ decline in 1Q21.

Samsung

Two factors helped Samsung’s performance in the NAND Flash market during 4Q20. First, Chinese smartphone brands (with the exception of Huawei) continued to aggressively build up their component inventories so as to fight for more market share. Second, PC OEMs released more upside orders than anticipated because of the further demand growth for notebook computers. Samsung’s NAND Flash bit shipments in 4Q20 rose by 7-9% QoQ as a result of the strong procurement momentum in the smartphone and PC segments. However, the ASP of its NAND Flash products dropped by more than 10% QoQ for the same period. Although clients in the data center segment did begin sending out orders for servers and components at that time, their demand was still very limited. As for clients in the enterprise server segment, they were mainly focused on inventory reduction. With the market leaning toward oversupply, Samsung had to lower prices and thereby experienced a revenue decline. Compared with 3Q20, Samsung’s NAND Flash revenue fell by 3.4% to US$4.644 billion.

Regarding production and technology plans, Samsung this year will be the leader among NAND Flash suppliers in raising production capacity. Besides continuing to expand the production capacity of the Xi’an Fab 2, Samsung will also set up a production line for 3D NAND Flash at P2L (in the Pyeongtaek campus). Most of Samsung’s NAND Flash products are still based on the V5 (92L) process at this moment. However, the supplier will significantly raise the output share of NAND Flash from the V6 (128L) process this year. The application of the V6 process technology will expand to more of its offerings for SSDs and UFS solutions.

Kioxia

Following the end of Huawei’s stock-up activities, Kioxia was unable to fully regain the demand for its mobile NAND Flash products through orders from other Chinese smartphone brands in 4Q20. At the same time, the supplier was affected by the weak demand for enterprise SSDs. On the other hand, there were other sources of demand such as notebook computers and game consoles. Consequently, Kioxia’s bit shipments in 4Q20 still registered a small increase. As for the ASP, Kioxia experienced a QoQ decline of 8-10% because of the general oversupply situation. On account of these factors, Kioxia’s NAND Flash revenue slid by 11.4% QoQ to US$2.749 billion for 4Q20.

Regarding production and technology plans, Kioxia will gradually expand the production capacity of K1. As for the construction of new fabs, Kioxia is staying with its plan to begin building Fab 7 in Yokkaichi and K2 in Kitakami in 1Q21. These fabs, which will be producing BiCS6 or more technologically advanced products, are expected to start contributing to the supplier’s output sometime in 2022. Technology migration will also be the main driver of its bit output growth. Currently, the majority of Kioxia’s NAND Flash products are still manufactured with the 96L BiCS4 process. Going forward, the supplier intends to raise the shipment share of 112L BiCS5 products this year.

Western Digital

Western Digital saw the ASP of its NAND Flash products drop by 9% QoQ for 4Q20 as its clients in the server segment were reducing their inventories. On the other hand, the sales of its channel-market products continued to grow, and the robust demand for notebook computers led to an impressive shipment result for its client SSDs. Western Digital’s bit shipments in 4Q20 increased by 7% QoQ. This roughly compensated for the decline in the ASP. All in all, the supplier posted a QoQ drop of just 2.1% in its revenue to US$2.034 billion.

Concerning its activities, Western Digital will be collaborating with Kioxia in the construction of Fab 7 and K2. The additional production capacity from these two plants will help the allied suppliers to deal with market competition in the future. The 96L BiCS4 process will be Western Digital’s primary technology for NAND Flash production this year. Additionally, Western Digital will be providing OEMs with samples of TLC and QLC products that are manufactured with the 112L BiCS5 process sometime between 2Q21 and 3Q21. Western Digital’s next-generation BiCS6 process is also set to enter the production stage in 2022.

SK Hynix

SK Hynix benefited from the aggressive stock-up activities of Chinese smartphone brands in 4Q20. Its bit shipments rose by 8% QoQ, but its ASP also dropped by 8% QoQ due to the general oversupply situation. With the decline in the ASP being canceled out by the increase in bit shipments, SK Hynix kept its NAND Flash revenue relatively constant for 4Q20. It posted a miniscule QoQ decline of 0.2% to US$1.639 billion.

This year, SK Hynix will rely on technology migration as the primary means of increasing bit output. The share of 128L products in its bit output came to around 30% at the end of 2020 and is expected to keep growing to surpass the output shares of 72L and 96L products in 2021. The supplier has also scheduled the launch of its 176L products for 2H21. Regarding the acquisition of Intel’s NAND Flash plant in Dalian, the transfer of the ownership of the plant along with Intel’s SSD assets is expected to be completed by the end of this year as originally planned.

Micron

Thanks to stock-up activities of smartphone brands and the growing demand for QLC SSDs from PC OEMs, Micron posted a significant QoQ increase of 17-20% in its bit shipments for 4Q20. However, like other suppliers, its ASP fell in the same period due to the general oversupply situation and registered a QoQ decline of 10-13%. In terms of revenue, Micron posted a QoQ increase of 2.9% to US$1.574 billion.

On the technology front, Micron has 128L products, but unlike other suppliers’ strategies, Micron will not ship 128L products to its main clients. Instead, Micron is focusing on the development of the second-generation 176L products that will serve as its main offerings in the future. Its clients will thus bypass the 128L process and advance directly to 176L process. OEMs are expected to begin receiving samples of 176L products from Micron in 2Q21 in accordance with the supplier’s schedule. With respect to the cell type, Micron is raising the shipment share of QLC products. Currently, more than 50% of supplier’s NVMe SSD shipments (in bit terms) are QLC products.

Intel

Intel made a recovery in its bit shipments in 4Q20 after inventory adjustments in the data center and enterprise server segments had caused a QoQ decline of nearly 25% in 3Q20. The procurement momentum of its clients was still fairly weak in 4Q20, but it did pick up somewhat compared with the previous quarter. Additionally, the demand from PC OEMs continued to rise. Consequently, Intel’s bit shipments grew by nearly 25% QoQ for 4Q20. Again like other suppliers, Intel saw its ASP drop in 4Q20 because of the general oversupply situation. The QoQ decline came to almost 20%. On balance, Intel’s NAND Flash revenue went up by 4.8% to US$1.208 billion for 4Q20.

Intel will probably not make any significant changes to its existing plans for production capacity and product mix as it has sealed the deal to sell its NAND Flash business to SK Hynix. It will continue to leverage its advantage in the enterprise SSD market to push its clients to adopt 144L products. Regarding the distribution of its product shipments by technology, Intel will be raising shipment share for the 144L stacking process and the QLC architecture. To increase the output of 144L products, Intel will expand the production capacity of the Dalian plant this year. From a long-term perspective, SK Hynix will be the main beneficiary of this capacity expansion effort.

On the whole, TrendForce’s investigations find that PC OEMs have been releasing a substantial amount of upside orders since the start of 1Q21. Although the oversupply situation is worse compared with 4Q20, it has become more moderate than expected. Moreover, the market is anticipating that clients in the data center segment will reinitiate large-scale procurement in 2Q21. The sentiment has thus turned more positive with respect to contract negotiations, and the general price decline has also begun to ease earlier than expected. Suppliers’ sales performances are projected to rebound rapidly in 2Q21.

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

Yearly gaming monitor (defined as having a refresh rate of at least 100Hz) shipment reached 18.4 million units in 2020, a 105% increase YoY, according to TrendForce’s latest investigations. This growth took place because monitor brands and panel suppliers poured considerable resources into this product category and because the stay-at-home economy generated a high demand for gaming monitors. TrendForce expects the gaming monitor market to remain in an upward trajectory in 2021, with a forecasted yearly shipment of about 25.9 million units, a 41% increase YoY.

TrendForce analyst Anita Wang indicates that, among the top five largest gaming monitor brands in 2020, MSI registered a remarkable 114% YoY growth in its gaming monitor shipment for the year. Although the company had primarily focused on curved gaming monitors, it began diversifying its offerings and expanding its lineup of flat IPS monitors in 2020. MSI’s 114% YoY growth far exceeded the market average and was the highest among the top five brands.

Thanks to Asus’ large-scale expansion of its gaming product lineup and an aggressive effort to procure components since early 2020, Asus’ yearly shipment of gaming monitors reached a 108% increase YoY. At the same time, Asus’ performance in the gaming monitor segment also resulted in the highest total yearly monitor shipment in the company’s history. In terms of monitor shipment (which includes both gaming and non-gaming monitors), Asus’ YoY % growth was the highest among the top 10 brands.

AOC/Philips saw a 102% YoY growth in their gaming monitor shipment for 2020, due to the high sales of their mainstream curved gaming monitors and flat IPS monitors, both of which contributed to an increase in AOC/Philips’ market share. At the same time, AOC/Philips is set to release high-end Mini LED models this year, giving them a more comprehensive monitor portfolio.

On the other hand, with regards to gaming monitor panels, SDC (Samsung Display Co.) led the field with a 35% market share in 2020. However, as SDC makes a gradual exit from the panel manufacturing business this year, the gaming monitor panel market has become a hotly contested sector for the remaining suppliers. In particular, AUO, which was ranked second in terms of market share in 2020, is expected to leapfrog its competitors and score the highest share in the gaming monitor panel market this year as it continues to expand the volume of panels that it supplies to gaming monitor manufacturers.

(Cover image source: MSI Co., Ltd.)

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

Global sales of NEV (new energy vehicles, which include both BEV and PHEV) skyrocketed in the final two months of 2020, with various models setting historical sales records, according to TrendForce’s latest investigations. TrendForce estimates total NEV sales for 2020 at 2.9 million units, a 43% increase YoY, and further expects yearly sales to reach 3.9 million units in 2021. However, as the current shortage of automotive chips has had a considerable impact on the auto industry, some uncertainties still exist in the forecast of EV sales.

With regards to the BEV market, Tesla primarily focused on marketing the Model 3 as its key model for 2020. The automaker took leadership position with a 24.5% market share last year, while the Model Y is expected to be key to securing its continued leadership in 2021 primarily because China has issued a sales permit allowing the Model Y to be exempt from purchase tax. Furthermore, Tesla was able to catch its competitors off guard by discounting Model Y prices by 30% on the first day of 2021. Volkswagen took second place in the rankings due to not only the excellent market reception of the e-Golf, but also the remarkable sales figures set by the ID.3 in 2H20, which helped Volkswagen stabilize its market share. Incidentally, as the ID.4 is set to hit the market later on, it is expected to make meaningful contributions to Volkswagen’s overall EV sales in 2021 instead of 2020.

BYD derives its competitive advantage from having a comprehensive model lineup. The Chinese company comfortably took third place with a 6.4% market share. Conversely, fourth-ranked Wuling Hongguang became the dark horse of 2020 by fielding a single EV model, the Hongguang Mini. Not only was the Hongguang Mini attractively priced, but the Chinese government also made a heavy push for NEV sales in China’s rural areas. Both of these factors allowed the Hongguang Mini to become one of the global top sellers within six months of its release. Hot on the heels of Wuling Hongguang is Renault, which took fifth place in the ranking. Renault was able to score a 5.6% market share thanks to its longstanding best seller ZOE. Although other models, including the Nissan Leaf and Hyundai Kona, also posted remarkable sales performances last year, their respective automakers did not place on the top five list because these automakers each had total EV sales that fell short of the five automakers on the list.

On the other hand, the top PHEV manufacturers were neck and neck in terms of ranking by market share. BMW and Mercedes-Benz each possessed a 13% market share, followed by Volvo with 12%. Fourth-ranked Volkswagen and fifth-ranked Audi registered a 10% market share and 6% market share, respectively.

TrendForce indicates that China and Europe are perfect examples of EV markets propelled by government policies. For instance, European automakers have adopted a proactive position to expand their EV lineups as a result of the stringent emissions standards set by the EU, and these automakers have subsequently been aiming to achieve zero carbon emissions or increase the share of EVs in their total vehicle sales. Apart from China and Europe, the US is yet another market where policies may have a positive effect on EV sales. After winning the 2020 presidential election, Biden is now set to launch his clean energy proposal, which includes replacing the US government’s existing fleet with EVs, removing the previously set ceiling on federal tax credits for EV purchases, and offering consumer tax incentives to replacing their conventional fossil fuel vehicles with EVs, among other actions. If these proposed actions were eventually implemented, TrendForce believes they would be able to drive up EV sales in the US.