1. AI Helps Growth in Demand for the New Generation High Capacity Memory Chip HBM
The demand for high-performance storage chips in emerging AI products such as ChatGPT is increasing day by day. According to the South Korean Economic Daily, benefiting from ChatGPT, Samsung and SK Hynix have seen a significant increase in high bandwidth memory (HBM) order taking.
It is reported that since the beginning of 2023, HBM orders from Samsung and SK Hynix have rapidly increased, and prices have also skyrocketed. Market insiders have revealed that the price of HBM3 specification DRAM has increased by five times recently.
On April 21st, sources announced that SK Hynix will begin providing the industry's first ultra large capacity 24GB HBM3 sample to multiple customers, with the goal of entering mass production and market supply in the second half of this year.
2. IC inventory adjustment cycle extended, 2H23 recovery momentum difficult to maintain
TSMC announced a downward revision of its operating performance for the entire year of 2023, from a slight increase to a slight decline. It also pointed out that the inventory adjustment dynamics of IC design manufacturers were not as expected, which also made the original concerns of IC design manufacturers come true.
TSMC had previously expected IC design customers to complete inventory destocking in the second quarter, but now it seems that the recovery strength and global consumer demand after the pandemic is worse than originally estimated. Therefore, the IC destocking cycle may not truly end until the third quarter.
This means that TSMC's major customers, whether in terms of mobile phones or PCs, are also conservative in their view of the second half of the year. The downward revision of investment momentum indicates that bulk consumer electronics products may be worse than originally expected.
3. Global PC shipments decreased by 28% year-on-year in the first quarter
On April 19, 2023, according to the latest report from Counterpoint, global PC shipments in the first quarter of 2023 decreased by 28% year-on-year, and it is expected that the annual shipment volume will decrease by more than 10%.
The report shows that in the first quarter of this year, the global PC shipment volume was 56.7 million units, down 28% year on year, which is the lowest quarterly shipment volume in nearly 10 years, except for the interruption of production in the COVID-19.
However, the report also predicts that PC inventory digestion is expected to end before the first half of 2023, and the personal computer market will gradually recover in the second half of the second quarter of this year and achieve strong growth in the second half of 2023.
4. Intel announces cessation of production of Bitcoin mining chips
On April 19, 2023, Intel recently announced that it will stop producing its Bitcoin mining chip Blockscale ASIC. Orders will no longer be accepted after October 20th this year, and the final product will be shipped no later than April 20th, 2024.
Intel stated, "Due to prioritizing investment in our IDM2.0 strategy, we have stopped producing Blockscale 1000 series ASICs, and we will continue to provide support to customers of Blockscale products
Intel's statement stated that the company is more focused on its IDM2.0 operation as a reason to terminate Blockscale ASIC. Regarding whether Intel plans to completely exit the Bitcoin ASIC business, Intel responded that it will continue to focus on market opportunities.
5. Tencent's self-developed video transcoding chip "Canghai" is put into mass production
Recently, Tencent announced that its independently developed video transcoding chip "Canghai" has entered the mass production stage and revealed that tens of thousands of chips have been put into use, providing services for Tencent's independent research and development business and public cloud clients in fields such as cloud games and audiovisual live streaming.
It is understood that since the beginning of 2019, Tencent Penglai Laboratory and Shannon Laboratory have collaborated to invest in the research and development of Canghai chips, hoping to overcome difficulties in hardware coding algorithms, architecture, and engineering. Canghai was first released in 2021, with a dedicated video encoding acceleration module built into the chip to reduce duplicate operations.
Tencent stated that Canghai mainly hopes to solve the dilemma of high image quality, low latency, and low cost in the application of video encoding and decoding.
6. NVIDIA suspends RTX 4070 GPU chip production
According to Bobantang, NVIDIA has issued a decision to stop supplying RTX 4070 GPU chips to AIC brand companies in China for a month. This decision is to control the market price, restrain the price war between manufacturers and channels, and is also a response to poor sales.
This decision may have a certain impact on AIC brand owners and consumers. For AIC brand merchants, due to supply suspension, it may lead to insufficient inventory of graphics cards and affect their sales performance. For consumers, a decrease in supply may lead to an increase in the price of RTX 4070 graphics cards, making it more difficult to purchase.
The news about RTX 4060 Ti and RTX 4060 has not yet received official confirmation from NVIDIA. If these graphics cards are really going to be launched, they may fill the market gap between RTX 40 series graphics cards and low-end graphics cards, providing more options and price advantages.
7. Dell Diversifies Component Supply Chain at Customer's Request
On April 19, 2023, Michael Dell, CEO of Dell, said in a recent interview that, in view of concerns about supply chain disruption, customers have asked Dell to diversify its parts supply chain, and the company is focusing on purchasing parts from places outside China.
Dell stated that with the deterioration of Sino US relations and the exposure of the pandemic to highly susceptible disruptions in the semiconductor supply chain, many customers have requested that the company diversify its supply chain. Currently, the assembly of PCBs, casings, and most computer products is manufactured and assembled in China.
Dell stated that due to investments in manufacturing chips and other key components in Europe and the United States, it is now possible to purchase components outside of China.
8. Latest Market Trends of More than 10 Chips, including TI, ST, NXP: Only Automotive Chips Can barely Watch
TI: Analog chip revenue has plummeted, with only the automotive sector growing. Q1 revenue, operating profit, and net profit have all decreased year-on-year compared to the same period last year
ADI: Delivery time has been shortened, and spot prices for some popular out of stock models in LTM power chips are still high
Microchip: The price of general materials has significantly decreased, and the overall delivery time of microchips is still relatively long, but it is gradually returning to normal
XILINX: The brand's popularity has increased, mainly concentrated in the 7 series and 6S series
The 6S series is currently experiencing a decrease in scarce and skyrocketing models, but the prices of scarce materials are still at a high level. This series is applied in industries such as industrial control, automotive infotainment systems, and consumer electronics, so models that currently have reduced prices are gradually returning to normal prices.
The 7 series is led by 7A, 7K and 7Z. At present, the inventory level is high, and the market value shows a downward trend. But the prices of popular models fluctuate regularly. There are rumors that the Q3 series will undergo price adjustments.
ST: In Q1 of 2023, its net revenue exceeded expectations. Currently, its order backlog coverage in the automotive, electric energy, and professional B2B industries is higher than six quarters, and the company may face the problem of empty wafer factories in the consumer sector in the second half of the year
Qualcomm: Although its automotive business is still growing by 20%, due to the weak performance of smartphones and IoT, revenue has plummeted this quarter, and the mobile department has laid off 20% of its workforce
NXP: Overall Demand Decline, Car Chip Revenue Boosts
Broadcom: Demand continues to slow down. The shortage is mainly concentrated in some automotive materials and some high-end PLX materials. The automotive sector mainly comes from overseas demand, while PLX high-end materials mainly benefit from the current popularity of artificial intelligence such as ChatGPT.
Renesa: The demand for MCU has significantly increased this month, especially for the R5 and R7 series, which are in short supply. The delivery cycles for these two products are around 40-50 weeks, and it is difficult to arrive early.
Ruiyu: Demand has increased slightly. Q1's performance was poor, with gross profit margin dropping to 43.1%, reaching a two-year low. Ruiyu stated that Q1 has seen urgent orders in the PC and consumer electronics fields, and IoT is also better than other applications. The company expects Wi Fi 6 penetration rate to remain strong.
Ansemy: The demand for automotive materials continues to grow. Delivery times have gradually stabilized, and even for high priced chips, there is limited room for growth. What is still lacking today is mainly a group of products that are difficult to replace, such as automotive MOS, automotive IC, and MBRS series used in industry and healthcare.
Infineon: There is a high inventory pressure on power devices. The automotive MCU Aurix TC2XX series has had a hot market recently, and some models are difficult to obtain with just one material. Recently, the demand for power devices has been sluggish, and inventory pressure has been great. However, there is a continuous shortage of high-voltage MOS, and the TLE series lead time remains around 50 weeks
Vishay: There has been a significant decrease in demand. Recently, demand has mainly focused on components with long and unstable delivery times, such as thin film resistors, MOSFETs, and optocouplers. After February, the shortage of inquiries has decreased significantly, and customer acceptance is also decreasing.
Lattice: This month's demand is sluggish. At present, the stock level is under great pressure. The market price has dropped significantly, and the prices of several conventional models have returned to normal levels.
