The Greensheet is Fusion Worldwide's monthly market intelligence report detailing the most significant developments across the integrated circuit, central processing unit, and hardware commodity supply chains. Here are some key takeaways from our latest report:
- Price adjustments continue to make headlines for the integrated circuit, SSD, HDD, and memory module markets.
- IGBT lead times lengthen for Infineon while excess supply is on the rise for specific high-voltage MOSFETs.
- Desktop and Notebook CPU demand continues to steadily expand while server customers begin experiencing more concentrated supply issues.
As the electronic component industry moves into 2024, changes in component costs seem to be the main story for the beginning of the year – especially for SSDs and HDDs. With many manufacturers maintaining cautious forecasts, Q1 trends remain uncertain as industries like computing and communications hope to move away from their prolonged excess supply period.
Learn more about the market happenings in the full report below.
Excess Supply Impacts IC Market, but Persistent Shortages Continue for IGBTs
Over the last month, Infineon experienced constraints for specific high-voltage MOSFETs, which caused delivery timeframes to extend. Alternatively, supply for low-voltage MOSFETs has steadily improved as declining demand in the consumer market resulted in manufacturers managing excess inventories. Due to the demand landscape, Infineon was able to pivot capacity to better support high-voltage MOSFET production and supply has now stabilized.
Power management ICs have undergone similar trends as inventory corrections have lasted longer than expected, and lead times have declined.
Furthermore, lead times for IGBT products have escalated after persistent fluctuations throughout the final months of 2023. Manufacturing capacity issues were the source of these shifts and have had the added impact of higher market prices.
Analog Devices and Lattice Announce 2024 Price Modifications
Analog Devices has announced plans to implement a price increase for MPNs belonging to series twenty years or older. The increase will be 20%, with some products receiving possibly higher variations, but details have yet to be finalized.
However, the primary target for the cost adjustments will likely be common parts with amplifier uses for most applications. Due to the specific use cases for these products, alternatives are limited, and customers will likely have to pay higher prices unless other components can be identified and implemented.
Lattice has also slowly released notices to end customers regarding a 7.5% price increase for Market Longevity Products, which is set to begin in 2024. This announcement applies to all products shipped for at least ten years. This includes the SIxxx series, which is part of the Silicon Image line, and the Lattice 4000 series.
The price change will take effect on January 29th, and any customer shipments on or after that date will likely be affected.
Central Processing Units
PC Activity Holds Steady While Desktop and Notebook Demand Progresses
Activity in the open market for personal computing CPUs has held steady over the past few weeks, with no significant transactions. Multiple inquiries from Tier 1 customers were checking on the availability of the Intel 12th Gen Alder Lake and 13th Gen Raptor Lake for both Desktop and Notebook CPUs, mainly the i5 and i7 series.
Market intelligence reports indicate no supply issues for these series, but customers are in standby mode for a potential supply gap. The catalyst for a supply issue would be the upcoming transition period for the new Meteor Lake series, which officially launched in mid-December for Notebook CPUs, and the date for the Desktop CPU has yet to be announced. Overall demand is stable, and there are no signs of a demand upside, but speculation for a potential supplier-driven shortage persists.
Overall, AMD Notebook and Desktop demand has declined slightly compared to months prior. While there was a spike in activity for the AMD 7030 series Notebook CPU, customers received allocation from AMD in December, and authorized distributors are forecasting soft demand in Q1. Consequently, manufacturers are reducing their capacity to achieve a more stable balance with current demand outlooks.
Server Market Demand Stays Strong as Customers Experience Supply Issues
Demand has stayed strong in the server CPU market for both Intel and AMD over the past several weeks. Reports of customers experiencing supply issues are on the rise, and the added impact of Intel removing special pricing for server CPUs has added to the market's demand.
Products that have gone EOL are amongst those with the most demand, including the Cascade Lake and Cascade Lake Refresh series, which are currently experiencing supply constraints. The most affected items are the Silver and Gold series. Alternatively, the 3rd Gen Ice Lake series is also seeing an uptick in demand, although this is due to invalidity on the special pricing.
Authorized distributors are taking conservative stances on forecasting and orders due to stretching lead times and uncertain allocation. While some state that supply may recover mid-Q1, demand is also slowly increasing for the Sapphire Rapid series, mainly the 6400 and 8000 series, but there are no reports of supply issues yet. Emerald Rapids also launched in mid-December, but the entire demand landscape won't take shape until Q1.
Milan and Genoa Series Popularity Continues for AMD
Cost savings remain the main driving factor for open market activity on the Milan and Genoa series, even after the rumors of AMD reducing production for optimal inventory management. But, with overall server CPU demand expected to increase steadily thanks to the proliferation of AI, this is subject to change as supply may dwindle.
Q1 SSD Allocation Remains Unclear for All Manufacturers as Prices Rise
Allocation updates from manufacturers are now taking place weekly, indicating that visibility is limited, and companies are struggling to match production capacity with the uptick in demand. Currently, allocation only meets 10% to 20% of customers' forecasts. This situation has led to a mounting imbalance between supply and demand.
The NVMe series continues to be the most constrained. The SATA series has also been affected as a direct result from manufacturers pivoting to support the NVMe series. High capacity supply remains the shortest across all series.
This trend has consequently impacted prices across all manufacturers, as costs have risen by 15% to 20% since last quarter. With Pricing continuing to rise week to week, customers are actively seeking cost effective alternatives to save where possible. This has consequently increased demand for EOL series and older models as their prices are generally lower.
HDD Costs Set to Increase in Q1, with an Additional Adjustment in Q2
HDD manufacturers have begun to inform OEM customers and distributors about an intended price that will impact all current series. The price increase will start to take effect in Q1 2024, and it appears that a 10% to 15% is expected. There are additional plans to implement another adjustment in Q2.
Furthermore, vendors have shared that customer forecasts have begun to expand. However, manufacturers do not intend to enlarge their order volume with upstream raw materials suppliers until HDD's market price reaches the expected profitable level. Depending on how this situation plays out, supply may pay the ultimate price if manufacturing cannot keep up with demand.
Memory Modules Experience a Surge in Activity and Transactions
Official pricing for memory modules has increased consecutively over the past several months. This trend is due to a tremendous increase in activity and transactions compared to the last quarter.
Manufacturers have held firm on pricing as they continue to cut down on DDR4 module production. This has resulted in customers attempting to build buffer stock, especially for D4 modules, as they try to avoid the price change trends and the possibility of supply constraints in the new year.
Nvidia Reacts to New U.S. Restrictions
The latest restrictions regarding U.S. export rules went into effect at the end of the year. The upgraded regulations led to a spike in pricing within the open market as customers scrambled to secure stock. The RTX 4090 experienced a price uptick of 20% to 30%, with the Nvidia Quadro series seeing a similar rise.
Nvidia was one of the companies hit hardest by the updated restrictions, as the company can no longer ship high-performance AD102-based graphics cards to China. While the company remains dedicated to working with the U.S. government to comply with regulations, it also wants to support its Chinese-based customers.
In response to the restrictions, Nvidia has included the RTX 5880 Ada Generation graphics card on its latest Version R535 U9 driver for professional graphics cards list. The similarities between the RTX 5880 Ada and the RTX 6000 Ada indicate that Nvidia tailored this product for the Chinese market.
