The Greensheet: July 2020

ICs

Dialog Semiconductor to expand its Internet of Things market share

Dialog Semiconductor has successfully acquired Adesto Technologies. This acquisition will allow Dialog Semiconductor to tap in the new markets such as industrial, consumer, medical and communications markets.

It will also enable cross-selling between the two companies and will allow Dialog Semiconductor to scale its business to a greater height. Adesto Technologies may also have some internal changes from the acquisition, such as the restructuring and reshuffling of distributors, which will allow for a better integration of its services and activities.

Ultimately, consumers can look forward to seamless data access, allowing for the intelligent control of “things” in today’s connected world.

Sensor market continues to expand

In the CMOS image sensor market, demand for commercial application sensors has started to decline caused by the decrease in mobile phone sales worldwide. Surveillance application CMOS sensors, on the other hand, continue to experience higher demand. As a result, we are not seeing any major delivery issues, and stock flow continues to recover from the 2019 shortage.

Market speculation suggests an increase in demand will occur mid-Q3 for mobile application CMOS sensors following the upcoming releases of new iPhone and Samsung models in Q4. This demand may be dampened compared to previous years due to the drop in overall global sales caused by the pandemic.

Industrial CMOS sensors inventory levels remain low due to its high dollar-value cost, limited demand and little upside opportunities for customers.

MLCC production is recovering

Significant demand for larger case sizes has continued to stay strong since May due to the unplanned increase in the consumption of notebooks and servers. While no longer as severe, expect to see shortages and extended lead times.

Additionally, MLCC manufacturing operations are slowly recovering from factory shutdowns caused by COVID-19. Currently, it is estimated that total MLCC global production capacity is functioning at 80%.

Samsung advances in the automotive MLCC market

Market leader, Samsung Electro-Mechanics, is expecting growth in its development of self-driving cars and its expansion of IoT. The company has designed a new automotive ceramic capacitor portfolio used in smart driving and infotainment.

The capacitor has a 20% longer product life compared to the current model, and can withstand higher voltage, which can be utilized for intense environments.

DRAM demand is rebounding

DRAM and NAND manufacturers are anticipating a healthy Q3 if 5G infrastructure deploys effectively and relatively on-time. New 5G products, including cell phones and scheduled gaming console releases, should create enough demand to combat the recent drop in price for DRAM and NAND. With the market currently soft, some companies are buying up product in anticipation of demand turning around.

Implications caused by COVID-19 are still creating some uncertainty in demand throughout the global market. If the rollout of 5G is further slowed down by the pandemic, it’s possible the forecasted production of DRAM and NAND flash could become more unstable and fluctuate in Q3 instead.

CPUs

Cost saving opportunity arises for 9^th Gen Coffee Lake series

Despite the oversupply and slow demand in the open-market desktop landscape, cost saving opportunities may be emerging for the 9^th Gen Coffee Lake series. We have heard that the main priority for distributors and vendors during Q3 is to deplete their inventory pressure, which will lead to more favorable pricing.

Demand rising for high-end AMD desktop Ryzen CPUs

With AMD EPYC server CPUs in constraint, some customers are shifting to the alternative AMD high-end Ryzen desktop CPU (AMD Ryzen Threadripper Processors and AMD Ryzen 9 Desktop Processors). The performance is comparable to AMD EPYC server CPUs. It is expected that open market pricing on these high-end desktop CPUs will increase by about 5%.

Supply constraints on Whisky Lake, Comet Lake and Ice Lake mobile CPUs

With the forecasted demand in Q3 drastically increasing, we’re hearing from sources that potential supply gaps may be occurring in July and August on Ice Lake Mobile CPUs. The most likely affected products appear to be i3-1005G1, i5-1035G1 and i7-1065G7.

The forecast for Whisky Lake and Comet Lake does not appear to be any better. Vendors have mentioned that the supply for both has not improved, and that concern for these products is expected to rise by the end of Q3.

Demand for Gemini Lake and Gemini Lake Refresh causing constraints

Both Gemini Lake and Gemini Lake Refresh continue to be the talk of the town. We are noticing that supply in the open market is limited and the outlook on lead time delivery is unoptimistic. Open market pricing for these products has increased by at least 10-20%.

Meanwhile, Intel has released an end-of-life notification for Gemini Lake CPUs (N4100, N4000, J4105, J4005 and J4115), along with a last product discontinuance order date set for January. Although still six months away, if demand for Gemini Lake continues to stay strong, then demand for the already constrained Gemini Lake Refresh could potentially be amplified.

AMD EPYC Server CPUs supply limited by Filecoin traction

Due to the hype around IPFS blockchain (Filecoin), AMD’s EPYC server CPU supply is limited in the open market and lead times have stretched to 4+ weeks. The most sought-after SKUs are AMD EPYC server CPUs (7742, 7542, 7402, 7302P, 7302 & 7282), AMD EPYC 7302 and AMD EPYC 7282.

We have also noticed an overall increase in pricing on these AMD EPYC server CPUs in the open market by 3%, especially in China. This has led to increased demand for high capacity HDD and server RDIMMs.

Cascade Lake and Cascade Lake Refresh is not going anywhere anytime soon

Intel has announced its next generation of server CPUs, the Cooper Lake and Ice Lake series. While Cooper Lake is already listed on Intel’s website, it is still unclear when the company will release Ice Lake. The transition from Cascade Lake and Cascade Lake Refresh to Cooper Lake and Ice Lake will require new server motherboards.

Traditionally, transitions are not immediate as customers tend to stay on the predecessor longer than they should. Hence, it’s likely the demand for Cascade Lake and Cascade Lake Refresh will be strong until at least the end of this year and potentially into early 2021.

MEMORY

Market oversupply caused by weakened demand

We are seeing an increase in demand for 64GB and 128GB RDIMMs, partially due to the popularity of the IPFS blockchain. However, general memory DIMM demand is still weak, leading to speculation that the official memory price may drop by 3-5% in the coming quarter.

In addition, due to the decrease in demand for production, some OEMs are releasing their excess inventory out into the open market, which could further dilute memory pricing. Market price for 32GB RDIMMs may drop an additional 10-20% due to the abundance of supply.

Similarly, demand for PC DIMMs is also relatively weak, resulting in big customers and major manufacturers having large amounts of slow-moving inventory on hand.

STORAGE

Customers take advantage of falling SSD pricing

Currently, demand for SSDs is relatively soft. Some suppliers and OEMs are offering their oversupply in the open market at lower prices to generate cash flow. Customers with a need for SSDs are taking advantage of this open-market opportunity to generate cost savings, as the official price has dropped 3-5%.

Demand for high capacity HDDs rising

Because Filecoin (FIL) incentivized testnet continues to lure more Chinese crypto miners and builders to jump on the bandwagon, demand for high capacity HDDs (>10TB) has started to rise. Additionally, the COVID-19 pandemic has created a surge in demand for Surveillance and NAS server systems, which use high capacity storage drives.

GPU constraints leave customers looking to the open market

Demand for GeForce RTX2080Ti is still relatively high with very limited supply in the market. Some users are now willing to accept any brand of GeForce RTX2080Ti as only small pockets of supply from Tier 2 and Tier 3 suppliers can be seen.

Other customers are left with no other option than to use RTX 2080 SUPER as a replacement. As a result, the price for RTX 2080 SUPER has increased by approximately 3-5%. This solution is only temporary as chipset supply for RTX 2080 SUPER is expected to be discontinued after July.

Due to constraints, even channel partners are rushing to the open market looking for chipsets. Meanwhile, manufacturers are preparing to transition to the next gen GeForce cards.

FINISHED PRODUCTS

Increased demand continues for work-from-home products
The hype for Filecoin has not only resulted in price spikes and shortages on AMD CPUs, but the motherboards it’s used in, including those manufactured by Supermicro, AsRock and Asus. According to sources, the most affected are dual socket motherboards.

Notebook demand is expected to stay robust until the end of Q3. Peripheral products, such as webcams and headsets, along with wireless cards are also experiencing tight supply due to a spike in demand. Manufacturers are still trying to meet the upside in demand from students and employees still working from home, with no clear indication of when they’ll be caught up.