The U.S. Department of Commerce announced on June 29 that the newly instituted Hong Kong national security law by the Chinese government will increase “the risk that sensitive U.S. technology will be diverted to [the Chinese government]”; the Department therefore put a temporary stop to the preferential treatment the U.S. had afforded to Hong Kong. TrendForce indicates that, as Hong Kong is a major site of chip warehousing for manufacturers and distributors worldwide, the U.S. government’s withdrawal of preferential treatment is meant to directly curtail the risk that companies may export products that contain sensitive information, through Hong Kong, to China. This action is thus expected to drastically change the current geographical concentration of semiconductor products and the production strategy of chip manufacturers.
According to the latest investigations by the DRAMeXchange research division of TrendForce, despite the reduced demand for consumer electronics and smartphones as a result of the COVID-19 pandemic, the NAND Flash market showed a short supply in 1H20, thanks to the corresponding rising demand for cloud services and distance education, as well as increased inventory procurement by some clients concerned with a possible breakage in the supply chain. On the whole, SSD currently dominates NAND Flash demand, while demand from the eMMC, UFS, and wafer markets, which are related to smartphones and consumer electronics, remains relatively sluggish.
According to the latest investigations by the DRAMeXchange research division of TrendForce, the increase in server orders in 2Q20 took place due to the gradual easing of supply chain disruptions from the COVID-19 pandemic. ODM server orders increased by about 20% QoQ in 2Q20, although work resumption at some overseas server assembly lines yet remains lower than expected, in turn constraining the overall server unit shipment performance. TrendForce estimates the QoQ increase in server shipments in 2Q20 to be about 9%.
According to the latest investigations by the WitsView research division of TrendForce, foundries have maintained a high level of capacity utilization in 1H20 in spite of disruptions caused by the COVID-19 pandemic. In particular, the node capacities of mainstream process technologies used for DDI production are showing a tight supply situation that is unlikely to be alleviated even in 2H20. There is a high possibility for foundry capacities allocated for DDI production to be compressed by other applications in 2H20, in turn potentially resulting in a price hike for DDIs.
According to the latest investigations by the DRAMeXchange research division of TrendForce, NOR Flash buyers found that their inventories were low and stepped up their procurement efforts as they anticipated the growing risk of COVID-19 causing disruptions in the supply chain. These efforts sustained the uptrend of NOR Flash prices from 1Q20 to 2Q20. NOR Flash ASP climbed by around 5% QoQ in 1Q20 and increased even further, by about 10% to 20% QoQ in 2Q20.
