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The third-generation semiconductor industry was impaired by the US-China trade war and the COVID-19 pandemic successively from 2018 to 2020, according to TrendForce’s latest investigations. During this period, the semiconductor industry on the whole saw limited upward momentum, in turn leading to muted growth for the 3rd gen semiconductor segment as well. However, this segment is likely to enter a rapid upturn owing to high demand from automotive, industrial, and telecom applications. In particular, the GaN power device market will undergo the fastest growth, with a $61 million revenue, a 90.6% YoY increase, projected for 2021.
There are four major categories of automotive DRAM applications, including infotainment, ADAS, telematics, and D-clusters (digital instrument clusters), according to TrendForce’s latest investigations. Of the four categories, infotainment applications require the highest DRAM content, although DRAM consumption per vehicle across all four categories remains relatively low at the moment. In contrast to ADAS, infotainment applications present a lower barrier to entry for companies, since current legislations and automotive safety standards governing infotainment are not as stringent, making infotainment a highly attractive market for various semiconductor companies and memory suppliers. TrendForce expects infotainment to remain the primary driver of automotive DRAM consumption through 2024, while all four automotive DRAM applications will together likely comprise more than 3% of total DRAM consumption as autonomous driving technology progresses toward higher levels. As such, automotive DRAM applications represents an emerging sector whose potential for growth should not be underestimated.
Demand for notebook computers is expected to remain strong throughout 2Q21 due to the persisting stay-at-home economy that arose in the wake of the pandemic, according to TrendForce’s latest investigations. In response to the high demand for notebooks, PC OEMs are actively raising a consistent inventory of components, including client SSDs. Nonetheless, client SSDs are now in increasingly tight supply because the preexisting shortage of NAND Flash controllers is now exacerbated by the power outage at Samsung’s Austin-based semiconductor plant. SSD manufacturers are therefore preparing to raise the prices of SSDs. Accordingly, TrendForce has also revised up its forecast of client SSD prices for 2Q21 from “mostly flat” to a 3-8% increase QoQ instead.
As the three dominant DRAM suppliers (Samsung, SK Hynix, and Micron) are currently experiencing a shortage in their production capacities, the corresponding shortage situation in the DRAM market has yet to be resolved, according to TrendForce’s latest investigations. Taking advantage of the fact that the whole DRAM market has entered a period of cyclical upturn in 1Q21, DRAM suppliers have significantly raised quotes for specialty DRAM products. This extraordinary development has led to price hikes that are almost double digits for some specialty DRAM chips. Furthermore, the magnitude of the price hike especially widens for products belonging to the lower part of the density range and the more niche applications. Looking at MoM changes in contract prices of specialty DRAM products for February, DDR2 and DDR3 chips saw the largest price hikes. Prices of DDR4 chips also went up due to the influence of the rising quotes for DDR3 chips. The average contract price of DDR3 4Gb chips, which are still mainstream for specialty applications, jumped 6.8% MoM.
TrendForce believes that as some support from US-based equipment suppliers is forthcoming, SMIC should be able to continue its efforts in the optimization of the mature process modules and overcoming production bottlenecks to avoid a scission in raw materials and spare parts, and predicts the company to sit at a global market share of 4.2% in 2021.
