Weekly news - Semiconductors from LinkedIn

The semiconductor market is experiencing dynamic changes due to various factors. One significant area of growth is driven by the AI boom, where the shipment of high-priced DDR5 memory and High Bandwidth Memory (HBM) has increased. This rise in shipment volume is expected to drive the average price of Dynamic Random-Access Memory (DRAM) up by 5% to 10% in the third quarter. However, the demand for DDR4 and NAND areas remains weak, suggesting that storage chip manufacturers may need to cut production in the fourth quarter.

In terms of pricing strategies, Taiwan Semiconductor Manufacturing Company (TSMC) has announced that it’s planning to maintain or stop reducing prices to suppliers in 2024, continuing its trend from 2022. This decision comes at a time when the overall semiconductor market’s outlook for 2024 remains unclear.

Japanese companies are also making strides in the industry. Shin-Etsu Chemical Industry and OKI have developed a novel, low-cost method for producing power semiconductor materials using gallium nitride (GaN). The innovative method could potentially decrease manufacturing costs by up to 60%, transforming the production process of these crucial components.

Concurrently, a report by Morgan Stanley highlighted that NAND prices have reached their lowest and are now on the rise again, with some customers even accepting a price increase of 30% to 35%. Following this trend, Micron has also begun to increase the contract price of its NAND Flash wafer, a move initiated by Samsung earlier.

Looking ahead, the International Semiconductor Industry Association (SEMI) is optimistic about the future of the semiconductor industry. Despite the current slowdown, SEMI anticipates a recovery starting in the second quarter of next year, projecting an 8.2% annual increase in semiconductor equipment and materials.

On a broader scale, NVIDIA’s senior management predicts a significant expansion in the AI market to reach a whopping $600 billion value, with chips and systems potentially constituting half of this sum.

Global semiconductor sales, as reported by the Semiconductor Institute of America (SIA), totaled $43.2 billion in July 2023, a slight increase of 2.3% from the previous month. Despite sales being down compared to the previous year, the year-over-year decline in July is the smallest gap seen so far this year.

Lastly, TSMC’s Chip on Wafer on Substrate (CoWoS) production is actively expanding, and TSMC expects it to meet 100% customer demand within a year and a half. This indicates that the current shortfall in the supply of CoWoS is merely a short-term issue.