The Greensheet: March 2024

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: 

• D4 Module Supply Remains Constrained as Pricing Increment Outpaces D5 Module in the market. Market Analysts Expect Further Cost Adjustments Between 10% - 15%. 
• The SSD Market Faces Tight Allocation for High-Capacity Storage Due to a Shortage of NAND Chips, Potentially Leading To Continued or Worsened Shortages if Supply Does Not Improve. 
• The Gaming Industry Is Driving Demand for Intel’s 12th Gen Alder Lake Desktop Pentium Series and Mobile CPU, Particularly the I5 and I7 Series, Leading to Increased Transactions and Supply Constraints. 
• IC Market Lead Times Are Increasing, Stemming from Wafer Shortages and Automotive Industry Demand. 

The Lunar New Year impacted demand and activity within the electronic component market in February, but business is back, and pricing is rising. With more cost adjustments planned throughout the year and lead times increasing alongside demand, competition for cost savings is intensifying. 

Learn more about the market happenings in the full report below.    

The Impact of Lunar New Year on the Memory Module Market 

There was a short burst of activity in the memory market in early February that was followed by a lull due to government closures in the Asia Pacific region during Lunar New Year celebrations. The pause in production during that time caused the memory module market to slow. Limited demand stemmed from speculative and buffer purchases as customers anticipated pricing would go up between now and April. Now that the festivities have concluded, D4 module supply continues to be limited, and pricing increment is higher than D5 modules. Market analysts expect manufacturers will increase costs by 10% - 15% within the coming months. 

Market Pressure Leads to Bidding System to Secure Constrained Supply 

Manufacturers are holding back supply of LPDDR but may release some stock by Q3 to ease pressure on the market. For DRAM parts, pricing will likely surge in Q3 and Q4 due to shortages. Most distributors cannot get allocation, and booking prices are difficult to confirm as they fluctuate regularly. LPDDR availability is subject to a bidding system, with distributors offering the highest price receiving priority on supply. 

With memory pricing on an uptrend, DRAM activity shows no signs of weakening as contract prices continue to increase. While DRAM market pricing has held steady after the Lunar New Year, overall costs in the memory market expanded by 5%. If manufacturers maintain tight control over production, prices will rise through the end of the year. 

DDR3 Demand Leads to Intense Competition Amongst Memory Manufacturers 

OEMs are vying to secure supply of DDR3 memory modules to meet their production needs, leading to a competitive bidding system. As companies attempt to secure supply for demand stretching from Q2 to Q4, they are entering a single bidding process, consequently increasing pricing. With Micron's announcement that costs will increase by 20% in Q2 and 40% - 60% in Q3, competition has intensified as customers attempt to capture cost savings. 

Furthermore, Samsung and SK Hynix have announced that they will stop DDR3 production in 2025 as the product heads towards EOL status. Demand for Micron's DDR4 and LPDDR is still strong and is growing stronger as supply tightens. The constraints stem from Micron transitioning production lines to HBM, which will be in Nvidia's H200 Tensor Core GPUs. 

Hardware 

SSD Market Prepares for Further Cost Adjustments 

The Lunar New Year caused activity in the SSD market to momentarily slow last month, but now that business has resumed, allocation for high-capacity storage is tight. As hyperscale and AI customers resume previously delayed projects, the market is seeing further constraints as the supply of NAND chips is short. These chips are necessary for older generations of SSDs, legacy systems, and specific data centers. If supply does not improve, SSD shortages will continue or worsen. 

Furthermore, analysts expect manufacturers will increase prices for SSDs by 15% -20 % before the end of Q1. So, demand is expanding further as customers try to take advantage of cost savings opportunities. 

Nvidia Continues to Lead GPU Innovation   

Nvidia's RTX 40 Super Series hit the market at the end of January, spurring a wave of demand from customers looking for a gaming GPU backed by generative AI. The initial launch was so popular that allocation across all partners is now limited. Inquiries for any remaining availability are multiplying as vendors struggle to maintain supply. 

The company's next big launch will likely be at the end of Q2 with the H200 GPU. This GPU promises improved efficiency, computing, and memory for large language modules (LLMs). It is reportedly double the performance of the current H100 GPUs. 

Jetson Module Lead Times Extend Alongside Demand from the Robotics Industry 

Supply is constrained for Nvidia's Jetson modules as lead times have extended steadily since the beginning of the year. Customers who provide forecasts report receiving three-month lead times, but those who do not provide forecasts are facing six-month lead times. Robotics and autonomous system customers are driving demand for these modules and developer kits as they progressively integrate this technology into their daily work and processes. 

Intel PC Market Gets a Boost from the Gaming Industry 

Overall activity within the desktop and server CPU market has been slow, minus a few concentrated pockets of demand. Supply of Intel's 12th Gen Alder Lake Desktop Pentium series and Mobile CPU, especially on the i5 and i7 series, has recorded the most transactions. The gaming industry is leading a distinct trend in demand for the series i5-12450H and i7-12650H.  

In addition, supply is similarly constrained for the 14th Gen Meteor Lake, but open market activities are slower than the 12th and 13th Gen. Supply is also tight for Intel small core ATOM CPUs, especially the J6412 and J6413. Lead times stretch up to 26 weeks, and pricing is escalating. 

AMD's market demand focuses on the Ryzen 9 7950X Desktop CPUs. Booking lead times are up to at least eight weeks. 

Communication and Networking Chip Activity on the Rise 

Demand for Intel's Ethernet LAN chip KTI225V has expanded over the last several weeks. Customers have reported supply issues as authorized distributors' lead times stretch, which may continue as this issue could last until Q3. Intel encourages customers to transition to the chip's upgraded successor, the KTI226V. 

Server CPU Competition Between Intel and AMD Stays Steady Amidst Stable Demand 

Server CPU demand has been stable over the last month as inquiries for both Intel and AMD stand at an equal ratio. Cascade Lake and Cascade Lake Refresh supply has mostly recovered, and customers report firm allocation for the upcoming weeks. However, a few SKUs are still experiencing longer lead times. Demand for the Sapphire Rapids, especially the Platinum series, is increasing as customers take advantage of cost-saving opportunities. 

Alternatively, activity for Intel's 5th Gen Emerald rapids has slowed. However, this is subject to change as customers transition away from Cascade Lake. 

For AMD, the most in-demand series is still the Milan and Genoa series, mainly the EPYC 9554, EPYC 9654, and Bergamo series EPYC 9754. Demand has stayed constant for the EPYC 7643 and EPYC 7713. Supply for AMD server CPUs is generally stable, and pricing is negotiable.