The Greensheet: December 2024

Product Updates

Integrated Circuits

• MPS Update: Increased automotive power supply orders, driven by the Chinese New Year and year-end shutdowns, are causing supply constraints and longer lead times for Monolithic Power Systems (MPS). This surge is challenging distributors to meet tight timelines.
• Growing Demand for Maxim MAX9 series: MAXIM is experiencing increased demand, particularly for its MAX9 series, with standard lead times of 30-40 weeks. Due to supply constraints and manufacturer-controlled stock, distributors are facing challenges in obtaining pricing and quoting, making it difficult to fulfill customer orders promptly.
• Rising Demand for Analog Devices Linear Tech Power Supplies: AD Linear Tech's power management ICs, especially the LTMxx series are seeing increased demand. Lead times have extended to 18-24 weeks, and pricing continues to rise. AD has tightened its supply control, with no local alternatives emerging in China to meet this demand.
• Marvell Technology’s Strategic Price Increase in 2025: Marvell Technology confirmed a 10% price increase across its entire product line, effective January 2025. This marks the first significant price hike in the optical communications sector, driven by strong market demand and the company’s ongoing investment in cutting-edge innovations such as 800G PAM and 400ZR optical solutions.
• Analog Devices Restructures Distribution Network: Multiple customers report Analog Devices is reviewing its distribution channel partners, leading to changes in distributor relationships. One customer reported that they needed to renegotiate prices due to the changes being made.

Field Programmable Gate Array (FPGA)

• Altera Announces Price Increases for Multiple FPGA Series: Altera confirmed a price increase for a range of FPGA products, affecting all quotes, open orders, and shipments as of November 24.
  • 7% increase on Cyclone® 10 GX/LP, Cyclone V, Cyclone® IV, MAX10, and MAX® V.
  • 10% increase on Agilex 7, Agilex 9, Stratix 10, Arria 10.
  • 20% increase on older series such as Stratix V, Stratix IV, Cyclone II, and MAX.
• Drivers Behind Price Increases: The price increases may stem from higher manufacturing costs, such as potential TSMC hikes for sub-7nm nodes. Additionally, the combination of limited alternatives and the cost of redesigning systems means Altera has the power to strategically increase prices with minimal customer pushbacks.
• FPGAs See Price Testing Amid Limited Alternatives: Altera is exploring price hikes for FPGAs due to rising production costs at TSMC and limited competition, further influenced by Intel’s financial pressures.
• Xilinx Faces Pricing Uncertainty: Xilinx continues to struggle with implementing price increases, with adjustments under consideration for early 2025, creating a volatile pricing environment and complicating cost planning for customers.

Passives

• Unstable Resistor Supply and Lead Times: Resistor supply is increasingly uncertain, with distributors unable to confirm lead times as availability depends on manufacturer confirmations, creating market instability.
• Tantalum Capacitor Lead Times Vary Across Manufacturers: Panasonic lead times are supposedly the shortest, while availability fluctuations for brands like Kemet, AVX, and Vishay.
• Murata Capacitor Lead Times Challenges: Reports of extended lead times for Murata capacitors vary, as some distributors navigate disruptions while others have stable supply. Those that have reported issues have concurrently seen Samsung capacitor lead times stretch up to 12 -16 weeks with last month’s allocation limited or unavailable.

eMMC

• Samsung Discontinues Certain Low-Capacity Products: Samsung plans to discontinue its lower-capacity eMMC and DRAM 4 products, with its minimum eMMC offering moving to 32GB. This shift is in response to growing demand for higher-capacity storage solutions across multiple sectors.
• Impact on Low-Cost Consumer Electronics: Samsung’s exit from the lower-capacity eMMC market may limit affordable memory options for cost-sensitive applications such as entry-level smartphones and IoT devices, potentially driving up prices in these segments.
• SanDisk to Dominate Low-Capacity eMMC Market: SanDisk is positioned to take the lead in the 4GB, 8GB, and 16GB eMMC markets, targeting the segments with the highest domestic demand, particularly in consumer electronics and embedded systems. SanDisk’s increased market presence may affect the pricing landscape, and availability and lead times could see similar fluctuations as competition intensifies in response to Samsung’s exit. 

RDIMM

• Increased Focus on Newer Inventory Date Codes: Customers are showing a preference for newer inventory, leading to heightened scrutiny of date codes in procurement decisions.
• Market Pricing Tiered by Date Code: Pricing structures now reflect a tiered system based on product date codes, with segments for 24+ months, within 1 year, and others, with price differences ranging between 2-3% per tier.

SSD

• Weak SSD Demand Drives Price Pressure: Overall SSD demand remains soft, with further price decline anticipated. The one area of market activity that has held strong is enterprise SSD demand, which saw an uptick in order activity for Q1 2025.
• Brand Transition for Intel SSDs: Intel SSDs are transitioning to Solidigm branding, with larger-capacity models prioritized. Certain product numbers may also adopt SK Hynix branding, though details remain unclear. Official pricing for SSDs is expected to remain unchanged despite the ongoing rebranding initiatives.

HDD

• SATA Drives Facing Extended Lead Times as Demand Remains Steady: Demand for SATA 22TB and 24TB drives remains strong in AI segments, with lead times extending to 6–8 weeks. SAS drive demand is stable with better availability, as these products are less widely used.
• Minimal Price Adjustments: Pricing adjustments have been minimal, with no significant modifications expected. Seagate was amongst the companies making moderate changes, increasing costs by one percent.

Server CPU

• Intel Roadmap Changes: Intel is planning to cutting back on its Enterprise roadmap and reduce the number of families and SKUs on offer OEMs are supposedly following suit and focusing on current generation processors.
• Sapphire Rapids Supply Delays Highlight Transition to Granite Rapids: Supply recovery is expected in early 2025, but Intel’s efforts to move customers toward Granite Rapids may extend delays.
• Tight Supply for AMD Turin 9005 Server CPUs: Supply constraints for AMD’s Turin 9005 server CPUs are expected to improve in December as AMD prioritizes major networking customers.
• Potential Shortages in AMD CPUs Amid Lean Inventory Strategies: Certain OEMs anticipate upsides on AMD CPUs in Q1 and are consequently keeping inventory levels lean heading into the quarter. AMD is shifting its production focus to the 4th-generation GENOA and 5th-generation TURIN series. Production of the previous 3rd-generation MILAN series will be reduced. The primary goal is to encourage customers to adopt the new series of server CPUs. 

Desktop and Mobile CPU

• Global PC Upgrades Urgent as Windows 10 Nears End of Support: One market intelligence source reports that of all the PCs globally, over half of them are more than four years old. Over half of those PCs will need upgrades to Window 11 before October 2025. With only 40 weeks remaining to initiate the upgrade, this may be a big driver of PC demand in 2025.
• Intel Launches Arrow Lake Desktop CPUs: Intel released its Arrow Lake desktop chips and the new LGA1851 platform in October 2024, directly competing with AMD's Ryzen 9000 series. The updated socket configuration is incompatible with previous LGA1700 designs, signaling a shift in platform requirements.
• AMD Ryzen 9000 Series Desktop CPUs Now Available: The latest AMD Ryzen 9000 series CPUs entered the market, with initial customer demand focusing on the Ryzen 9 9950X, 9900X, Ryzen 7 9700X, and Ryzen 5 9600X.
• Rising Demand for AMD Ryzen Desktop CPUs: Demand for AMD Ryzen 7 7700 Gaming Series CPUs is increasing, reflecting strong interest in high-performance desktop solutions.
• Supply Constraints for Intel Mobile CPUs: Intel Raptor Lake mobile CPUs are experiencing shortages and the impact extends to 13th-generation related models. 

GPU

• Next-Generation NVIDIA GPUs and Market Shifts: NVIDIA’s RTX 5000 series will likely debut at CES or GTC, which has the company preparing production for new products. Consequently, EOL updates are expected for the RTX 4090 GPU chips and the AG000 workstation GPUs. Due to the speculation, both products are experiencing supply constraints and price fluctuations.
• NVIDIA B200 Roadmap Update Awaited at CES: NVIDIA has yet to announce mass production plans for the B200. Customers are hoping for clarification during CES, where the company’s CEO is expected to provide an updated roadmap during his speech at the show.
• EOL Transition Challenges for Workstation GPUs: With NVIDIA's A6000 GPU reaching end-of-life, the company sharply reduced allocations, causing shortages and price increases for legacy models. The replacement model is set to launch in February 2025, potentially impacting enterprise computing and PC markets.

Motherboards

• Supermicro Motherboard Supply Challenges: Supermicro is experiencing tight supply for motherboards, with lead times exceeding five months. The transition to full product manufacturing (L6/L10) has restricted partial orders, further complicating fulfillment. Backlogs and potential EOL status for X11 series motherboards are adding to allocation challenges, with constraints expected to persist until year end.
  
  

Manufacturer Updates

November earnings calls revealed several key trends as companies continue to make structural shifts to drive demand. However, excess inventories and fluctuations in market activity continue to be a headwind.

• Emerging Opportunities: Industries tied to AI, cloud infrastructure, defense, medical, electric vehicles, and renewable energy are thriving due to structural shifts and innovation.
• Inventory Management: Normalization trends suggest gradual stabilization, but certain sectors, particularly industrial, are only seeing small pockets of strength as inventory digestion takes longer than originally forecasted.
• Lagging Sectors: Industrial power systems, traditional automotive components, wireless infrastructure, and consumer appliances are facing headwinds due to weak demand and excess inventory.
• Regional Notes: Asia, especially China, shows more robust recovery and demand growth across segments like automotive and AI. Europe remains cautious, particularly in industrial and automotive markets.
• Muted Short-Term Outlook: Despite optimism in specific industries, the overall market trajectory remains cautious for 2025 due to continued inventory corrections and cyclical delays.

For a more detailed analysis of earnings calls, click here.

SK Hynix

• SK Hynix Surpasses Samsung in Operating Income: SK Hynix outperformed Samsung in operating income for the first time, driven by strong demand for HBM from major tech companies.
• Chips Act Boosts Domestic Manufacturing Investments: SK Hynix is leveraging funding from the Chips Act to develop a new production facility in Indiana, focusing on NVIDIA chipsets to further strengthen its supply chain presence in the U.S. These chipsets will move through a multi-step process, transferring to TSMC before final assembly by NVIDIA’s contract manufacturers, streamlining supply chains for critical components.

Samsung

• Samsung Foundry Faces Capacity Reductions in 2025: Samsung is set to halt 30% or more of its foundry capacity for 4nm, 5nm, and 7nm processes in 2025, with reports indicating that this could extend to 50%. This decision comes as Samsung struggles to secure customers for its leading-edge manufacturing lines, suggesting that some of the capacity may already be underutilized.
• Samsung Faces Challenges with NVIDIA HBM3 Partnership: According to one source, Samsung's HBM3 memory has failed at NVIDIA, therefore NVIDIA decided not to proceed with Samsung’s HBM3 offering. NVIDIA is reportedly only working with SK Hynix and Micron. There is a belief that Samsung DRAM pricing will decline as the manufacturer attempts to drive revenue through lower costs.

Marvell

• Surging Demand for AI-Driven Products Boosts Financial Performance: Marvell's strong quarterly performance was largely driven by the booming demand for AI-related products, including ASICs and silicon photonics for data centers. This demand exceeded market expectations and supported the decision to raise prices.

Silicon Labs.

• ASPs to Increase Thanks to AI and IoT Edge Solutions: Silicon Laboratories anticipates a notable lift in average selling prices (ASPs) as the adoption of AI-driven IoT Edge applications accelerates. The push for higher performance and enhanced capabilities in edge devices—which require more cores, compute power, and silicon space—is driving the increase.

Lattice Semiconductor

• Headcount Reduction Amid Market Challenges: Lattice Semiconductor implemented a 14% headcount reduction at the beginning of the quarter, despite gains in FPGA market share. The company assures that customer service will not be impacted.
• Growth in FPGA Market Share: The Nexus small FPGA family and Avant mid-range FPGA family continue to perform well, prompting Lattice to expand its FPGA portfolio. This expansion is driven by strong demand in AI servers, with one OEM reportedly partner using over 50 Lattice FPGAs per rack. The company anticipates significant growth in server rack demand in 2025.

Coherent Corp.

• Strategic Shifts Create Change for Product Investments: Coherent is investing in datacom platforms, including next-gen transceivers and Optical Circuit Switches, while exiting non-strategic product lines. Details on affected product lines will be shared in December. To further offset losses, it is selling an underutilized facility and seeking buyers for its battery technology platform.

Vishay

• Passive Component Inventory Normalization: Passive component inventory is approaching normalized levels, though regional variations persist. Asia has 18 weeks of inventory, Europe 22 weeks, and the Americas over 50 weeks. Lead times for capacitors remain elevated compared to other components. Normalization in this market is anticipated this quarter.
• Opportunities Amid Low Visibility: Customer visibility remains low, with 50%–60% of orders in Asia requiring quick delivery, exposing supply gaps at distributors. This trend is driving opportunities for alternative partnerships. Semiconductor normalization is expected to follow in Q1.

Diodes Inc.

• Automotive Pricing Forecast: Diodes anticipates stable automotive pricing for the remainder of 2024, with built-in quarterly price reductions of 1-2% included in their model.

NVIDIA

• Geographic Developments: Data Center revenue in China grew sequentially, supported by export-compliant copper products. India showed a significant push, with major CSPs enhancing GPU deployments. Japan's leaders and telecom providers are investing heavily in AI infrastructure.
• Blackwell Updates: NVIDIA Blackwell systems are now in full production, with demand described as "staggering." The complex nature of Blackwell (requires seven custom chips to support configurations, including air-cooled and liquid-cooled systems, different NVLink options (8/36/72), and x86 or Grace architecture) made scaling a challenge, as evidenced by the lower than expected shipments made last quarter. However, this quarter, shipments are expected to reach billions.
• Outlook: Strong expectations for Q4 and beyond, with NVIDIA anticipating growth in networking, AI, and gaming sectors. Revenue for NVIDIA AI Enterprise is projected to increase over 2x year-over-year. Continued expansion in the industrial and consumer sectors, with partnerships and initiatives that enhance AI development.

Intel

• Leadership Change Amid Chip Technology Struggles: Intel faces challenges keeping pace with rivals NVIDIA and AMD in the AI semiconductor market, with slower-than-expected sales of its Gaudi AI chips. The company is consequently laying off 15,000 employees, suspending fourth-quarter dividends, and cutting $10 billion in costs. CEO Pat Gelsinger stepped down in early December, and interim co-CEOs have been appointed while a search for a permanent successor continues.

Spotlight on U.S. Tariffs

In light of the recent U.S. election results, tariffs on certain products could rise significantly by April 2025, prompting some buyers to stock up through March 2026.

Market Trends

• Stocking Strategies Adjusted for Tariffs: Customers are accelerating purchases or pulling in schedules ahead of year-end deadlines to avoid anticipated tariff hikes, with some uncertainty around vendor mitigation plans.
• Control List Products Impacted by Policy Changes: Vendors are stockpiling items potentially subject to regulatory controls, anticipating price adjustments based on forthcoming policies.
• Increased Demand for Storage Components: Customers are actively building inventory of HDDs, SSDs, and memory products.
• Chips Act Uncertainty Risks HBM Projects: Speculation about policy changes could jeopardize high-bandwidth memory (HBM) initiatives.