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Jan 15, 2020 4:55:00 PM
 

IC

New Demand Era of CMOS Image Sensors 

 

One of the latest competitive elements in the smartphone industry is the quality, resolution and its number of cameras. With that, the semiconductor sector’s CIS (CMOS Image Sensor) demand is skyrocketing.

With On Semiconductor cancelling its CCD sensor line – following Sony doing the same in 2016 – customers are switching to CMOS sensors.

Now that the smartphone market is moving from triple to quad cameras, Sony, the current market leader, may be facing more of an issue meeting supply. The company is building a new plan, which is set to open in 2021, but it is unclear whether it will be able to meet current demand even with its 4th generation of IMX sensors release. Sony US has already advised their distribution network to start quoting 20 weeks for upside demand and to have their customers revaluate their forecast demand. This represents a significant increase in lead time stretch for the CMOS sensor market across the board for all IMX series.

Samsung and SK Hynix, the world’s top memory chipmakers, have announced plans to expand their CMOS sensor production capacity in efforts to capitalize CIS market share. Samsung’s goal is to become a leading multi-camera smartphone CMOS provider, not only in the phones with their brand name, but also for the sensors needed by all phone manufacturers. For example, Samsung has started developing higher megapixel sensors up to 108 (MP), which is the first mobile image sensor to go beyond 100 million pixels. China’s biggest mobile maker has already chosen to use Samsung’s sensors in its phones because of this

SK Hynix isn’t sitting still either as it has recently opened a new R&D in Japan to strengthen its technology and convert some of its factory’s production of DRAM to CIS.

Memory Chip market facing challenges to forecasted growth

Unforeseen events are affecting the DRAM and NAND flash market that could threaten the supply balance and lead to inflated prices for RAM, as well as further exacerbate the price increases for SSDs … just as growth in new technologies is beginning to be seen.

On Dec. 31, 2019, Samsung suffered from a power outage, which halted NAND and DRAM production as the company took days to restore operations.

In addition, the fire at a Kioxia flash foundry in Japan, which produces 3-4% of total world NAND, could affect output for the company and Western Digital. Even before the fire, NAND flash prices were expected to rise 40% in 2020. The fire that occurred in Fab 6, which produces 64-layer and 96-layer 3D NAND used in SSDs, caused a two-week halt in production. Current estimates state it could have disrupted production of about 0.8 exabytes of NAND or less than 1% of global production. Nevertheless, market reaction was swift with prices increasing on EMMC and 3D NAND Flash, as well as some SSD prices increasing between 20%-40%.

These events are causing further volatility as NAND flash and DRAM demand grows due to 5G connectivity, artificial intelligence, deep learning and virtual reality. This includes mobile, data center and cloud-computer servers, automotive and industrial markets.

As mentioned by Tobey Gonnerman, Executive Vice President of Global Trade at Fusion Worldwide, in The Wall Street Journal, surpluses in the memory chip stockpile are smaller than before leading to contract-price increases for the first time in over a year.

Micron, Sandisk, Toshiba and Taiwanese makers Winbond and Macronix are expected to be the next manufacturers feeling effects of tightening supply and price increases. In response, many memory buyers are stocking up their inventories in anticipation of these problematic issues.

MLCC demand booming in Year 2020

Speculation is growing that there will be another MLCC shortage in 2020 because of the next generation of smartphones and the increased development of electric vehicles. The main driver of the growing demand for MLCCs is its use in smartphones, caused by the continually growing performance of mobile phone hardware and the rising production of 5G mobile phones.

For example, smartphones produced today use about 1200pcs MLCCs – 700pcs higher than in 2011. Current market forecasts call for 1.4 billion smartphones to ship worldwide. If shipments exceed just slightly to 1.5 billion units, this would represent a demand upside of MLCCs amounting to 120 billion units.

Although lead times are returning to traditional levels and the supply scenario has improved since 2018, there are still spotty shortages for some components. It is predicted that the increase in demand could come as early as the second quarter of 2020. Once demand picks up in 2020, shortages will be wider spread.

There are indications that the China market is already facing longer lead times, component shortages, allocations and higher pricing. Many distributors cite these issues are caused by giant phone makers who have already placed their forecasts in preparation for the 5G wave. Many distributors mentioned they cannot catch up with the market demand, specifically on 0603, 1005 case size.

 

 

CPU

AMD gains bear out in open market

The talk of AMD gaining more market share as a result of Intel shortages has shifted from hope to actual changes in forecasts and consumption. We have seen considerable increases in the overall number of inquiries on PC processors in recent months, but the surge in recent weeks feels different. Customers of varying sizes and types from multiple regions have been looking for support – a phenomenon that is consistent with the types of shortages we’ve been accustomed to on the Intel side, which have resulted from surplus demand.

The 14nm Raven Ridge processors based on Zen microarchitecture and the current generation Matisse processors based on Zen 2 have been the most active segments. Support from distribution channels has been spotty and restrictions are still challenging, but overall the open market is gradually emerging as a viable option for manufacturers looking to shore up their demand.

No relief in server CPU shortage market

As predicted, January has been a continuation of the same constrained market with very high premiums for server CPU that started in October. Purley supply has loosened up, but Cascade Lake is as bad as it has ever been, and the upward movement in pricing in recent weeks indicate more challenges after Chinese New Year.

Orders have been steady and spread evenly across the 42XX, 62XX and 82XX models, while pricing premiums are hovering in the 20-22% range – it’s not uncommon to see market pricing coming in north of pricing listed on Intel’s website.

As far as server CPU shortages go, of which we have seen several iterations in recent years, this current run on Cascade Lake has been the most acute by a significant margin.

Shortfalls in allocation for 14nm desktop CPU still massive

The desktop front has remained the same. Eighth and Ninth generation core models are running at significant premiums and heavy order velocity through the end of 2019 and into the New Year.

Coffee Lake Refresh, particularly the i5-9500 and i7-9700, are the big market movers and supply availabilities are quite challenging. By some accounts, allocations for this quarter are 40-50% less than the previous quarter. Hope for relief coming in March is fleeting as indications in recent days point to continued tightness well into Q2.

In the least shocking bit of news to come across the wire, 10th generation Comet Lake-S desktop processors are expected to be constrained upon their expected launch in late March/early April.

 

 

FINISHED GOODS

SSD shortages worsen to kick off 2020

The Kioxia fab facility fire mentioned earlier has also caused supply constraints for SSDs to worsen. Because of the disruption in NAND manufacturing and the two-week interruption in supply, SSD supply that had originally looked short entering 2020 has been compounded by the fire.

In addition, we are hearing that Tier 1 OEMs are struggling to have their orders fulfilled by Intel. Lead-times are being stretched to 12 weeks and customers lack confidence their orders will be filled as due dates approach. We are hearing rumors from distributors that Intel may be pulling all special pricing and reverting to MSRP. As factory inventory begins to deplete, we will begin to see pricing surge. Pricing has increased 5-10% across all series.

Though all lines are affected, Intel’s S4510, S4610, P4510, P4610 240 and Samsung’s PM883 series in 240GB and 480GB will face the most critical shortages

There may be some open market availability prior to Chinese New Year but expect incremental stock availability afterward.

The shortage is expected to persist beyond Q2 2020.

RTX2080TI shortages continue

NVIDIA’s Turing chipset shortage continues as mid-tier board partners, such as MSI and GALAX, reported not receiving any chipsets from NVIDIA for close to two months. With NVIDIA preparing to launch their next generation GeForce cards in mid-2020, there is a possibility that the company shifts significant manufacturing capacity toward it instead.

With demand for RTX2080Tis increasing and supply continuing to remain limited, we have seen pricing increases of 8-10%, and we expect that to continue in the upcoming months.

 

 

MEMORY

Memory market heats up as shortage looms

Pricing for DIMMs is finally on the rise after it had been on a downtrend for the past few quarters with a current price increase of 10-15% compared to December. However, depending on the product families, the market signals are changing. Some prices will stay flat or show an increasing tendency (e.g. 4Gb DDR3, 4Gb/8Gb DDR4).

There are rumors that manufacturers are trying to increase DIMM prices after Chinese New Year by holding their inventory. Allegedly, vendors that have incoming stock will not quote prior to receiving shipment and instead are taking a wait and see approach – waiting to see how the market plays out before quoting again. One distributor, for instance, claims Samsung will not release any goods to them at the moment.

Lead times are expected to be prolonged from the current 6-8 weeks stretching to 9-12 weeks. Currently 2933MHz for 32GB/64GB are the shortest in the market. Demand for 2933MHz has picked up tremendously and vendors are sharing that customers are in a transition period as they switch over to the new Cascade Lake server CPU.

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