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An earthquake that was around magnitude 6.0 on the Richter scale occurred off the east coast of Taiwan at 5:46PM local time on January 3, 2022. As most local DRAM and foundry fabs are located in the northern and central parts of the island, TrendForce’s latest investigations reveal no notable damages to the equipment from the fabs. Therefore, the production side is expected to continue normal operation, and the actual impact of the earthquake on the output of Taiwan’s DRAM and foundry industries will likely be limited. Taiwan’s memory fabs, including those operated by MTTW, Nanya, and other smaller semiconductor companies, collectively account for about 21% of the global DRAM production capacity. In the foundry industry, Taiwan’s fabs, including those operated by TSMC, UMC, Vanguard, PSMC, etc., together make up as much as 51% of the global production capacity.
Currently, the consequences of Xi’an’s lockdown on Samsung is weighted most heavily towards the difficulty of scheduling shifts for personnel, according to TrendForce’s investigations. Due to restrictions on movement and other lockdown measures, Samsung must continue operations with limited manpower. Samsung is currently making active adjustments to reduce impact on output and the local government expects a return to normalcy within one to two weeks. However, if the pandemic is not properly controlled, short-term impact on the production utilization rate of the local factory campus cannot be ruled out, resulting in a slight decline in output. As for raw materials required for production such as water and power, supply seems to remain sufficient, though Samsung is still confirming the specific degree of any impact.
The Chinese city of Xi’an has been placed under lockdown due to a local outbreak of the Delta variant, although it remains uncertain as to when the lockdown will end, according to TrendForce’s latest investigations. Samsung operates two memory fabs in Xi’an, both of which are responsible for the manufacturing of high-layer count 3D NAND Flash products, and wafer inputs at the two fabs account for 42.5% of Samsung’s total NAND Flash production capacity and 15.3% of the global total. At the moment, the lockdown of the city is not expected to have a notable impact on these fabs.
The new normal ushered in by the pandemic will not only become the driving force of digital transformation but will also continue to drive the server market in 2022, according to TrendForce’s investigations. It is worth noting that potential unmet demand in 2021 and the risk of future server component shortages will become medium and long-term variables that influence the market. Analyzing the shipment volume of completed servers, a growth rate of approximately 4-5% in completed server shipments is expected next year with primary shipment dynamics remaining concentrated in North American data centers with an annual growth rate of approximately 13-14%. From the supply chain perspective, the ODM Direct business model has gradually replaced the business model of the traditional server market, giving cloud service providers the ability to respond quickly to market changes. However, based on the unpredictability of the market, TrendForce assumes two forecasts for server growth trends. One, the supply situation of key components is effectively improved. Two, the supply situation of key components is exacerbated.
The semicondustor market in 3Q21 is red hot with total revenue of the global top 10 IC design (fabless) companies reaching US$33.7 billion or 45% growth YoY, according to TrendForce’s latest investigations. In addition to the Taiwanese companies MediaTek, Novatek, and Realtek already on the list, Himax comes in at number ten, bringing the total number of Taiwanese companies on the top 10 list to 4.
