THE GREENSHEET
The Greensheet: September 2019
IC
CMOS Sensors Gaining Traction in Multiple Markets
An unexpected surge in demand for surveillance and camera-enabled devices has created supply issues for Sony CMOS sensors. Lead times have extended to 12 weeks or more, depending on their application, as more manufacturers are swapping out CCD sensors and adopting more CMOS sensors. In particular, the IMX305 and IMX265 series, which are primarily manufactured in Japan, have seen lead times stretch to 20 weeks. The IMX265 CMOS sensors are popular amongst OEMs and CMs due to their greater image quality and low-noise output.
The global image sensor market has seen significant growth thanks in large part to rising demand for smartphones, security cameras and high-definition cameras. These sensors cast a wide net for applications that range from consumer to industrial and medical. Combined with their basic characteristics of high-speed frame rate, greater resolution, improved noise characteristics, and quantum efficiency CMOS sensors have begun to overtake their antiquated CCD counterparts.
Smartphone companies are regularly looking for innovations in cameras to enhance the resolution. For instance, in July 2018, Sony announced the highest resolution image sensors camera IMX586 in the world for smartphone cameras. The company increased the resolution to 48 effective megapixels, which in turn is expected to compel other companies to invest in similar technology — thus boosting the market growth.
Furthermore, the emergence of self-driving cars and Advanced Driver Assistance Systems (ADAS) has also been instrumental in driving the market in the automotive sector.
With all of this in mind, experts anticipate an 11% annual growth until 2024.
Growth in key industries expected to increase MLCC demand in 2020
Large case size MLCCs have become the focal point of 5G production. In response, contractors in China are expected to ramp up production. With overall supply of large case size MLCCs becoming tighter and 5G productions getting into full swing by 2021, some assume we will see short supply near the beginning of 2020.
No Improvement from TE Relays but other makers remain stable
Distributors of TE relays are still seeing extended lead times with no immediate resolution in sight. Thanks in part to stocking allocations, many distributors are showing lead times of more than 52 weeks and automotive relays are experiencing worse conditions. Vendors have also had expected deliveries pushed back by TE making it hard to give accurate expectations to customers.
We are seeing other manufacturers have better lead times. For example, Omron signal relays are slightly better off with lead times ranging from 16-26 weeks, and HongFa lead times have been stable at 14-16 weeks. In addition, Panasonic relays have been given estimates of 20-24 weeks, but automotive grade relays have returned to normal levels at 18-20 weeks.
CPU
AMD Ryzen shifting production of wafer from Global Foundries to TSMC Taiwan
We are expecting to see supply constraints in the coming months on the new 3rd Gen AMD Ryzen desktops because AMD is expecting to shift wafer production from Global Foundries to TSMC.
Along with Ryzen 3rd Gen, TSMC lines are being used for wafer production on Apple’s new iPhone 11 and Huawei’s Mate 30 — both expected to launch in Q4. As such, the company will likely face production constraints during this period of peak production.
The affected series will be 3600, 3700X, 3900X and 3950X, with the Rysen-9-3900X having a very limited supply this month. Relief is not expected until after China Golden Week in early October.
Finally, we have seen considerable price increases in China and Korea on 3rd Gen Ryzen, with premiums of 20% and nearly 70%, respectively.
Shortage of Purley 61XX & 81XX continues and pricing is on the rise
As Intel continues to focus production on the new Cascade Lake series, we are seeing very tight supply on Purely 61XX and 81XX in the market right now. Pricing is still at a premium — with increases across the board of roughly 10-15%. Despite pricing premiums across these SKUs, demand is still very high, and customers are buying whatever they can find. With lead times stretching, customers are securing lead time offers through October. We are expecting to see shortages last until end of Q4.
Generation Desktop supply is recovering, but we are still expecting tightness in Q4
As had been foretold in recent editions, supply for 8th generation desktops is loosening up, particularly on the i3-8100 and i5-8500. There are indications; however, that this could be momentary, and that October will bring another round of price spikes and shortages.
i7-8700s still remain very tight as Intel allocation to distributors has been pulled back. This has caused pricing increases of around 7% from July through August. Pricing will continue to spike further if we do not see any improvements with supply.
Celeron G4560s were very tight last month and we expect it to worsen in Q4. Distributors are not seeing allocation from Intel and distributors have been unable to even offer lead time offers into October.
Customers are moving to the 9th Generation iGPU
With the ongoing shortage on 8th Gen DT, customers have been moving the 9th iGPU. Currently, 9th Gen Desktop Production seems to be focused on “F” suffix iGPU disabled desktop CPUs (i3-9100F; i5-9400F; i7-9700F), and we have seen ample supply in the market.
However, iGPU desktop SKUs i3-9100, i5-9400 and i7-9700 have been extremely limited. These seem to be the most commonly used SKUs by most Tier 1 OEM customers, and they have become popular in the PRC market recently.
Focus on Comet Lake has been causing constraints across multiple mobile products
We are hearing that Intel is moving a big portion of the Kaby Lake Refresh supply to Huawei. The Huawei allocation, coupled with Intel putting Comet Lake into mass production in the upcoming quarter, is causing the current tightness on Kaby Lake R supply. Thus, we foresee constraints on Kaby Lake Refresh mobiles into Q4 of 2019. In addition, some Tier 1 customers started buffering stock in July for September deliveries.
Whiskey Lake supply has started to become affected over the past few weeks and supply is tightening with price trending upward. Most customers have not seen effects like the recent Kaby Lake R shortage, but that could change quickly in the upcoming weeks.
Mass production will be starting on both Ice Lake and Comet Lake next quarter, and we are already hearing that customers will be facing tight supply on both through Q4 2019 and into Q1 2020.
FINISHED GOODS
Diminishing SSD inventories drive up market price
SSD manufacturers are increasing lead times and prices.
Intel Client SSDs are short, especially PCIE 256GB, with lead times stretching up to 14 weeks for new orders. The shortage, due to low inventories and unexpected upside, is not expected to recover until October. At the same time, Intel Enterprise SSD prices are trending up by 10% for September. 3.8TB PCIE capacities and above are facing tight allocation now.
Meanwhile, Samsung Client SSD will have a price increase of 10% in September. Due to the low production in the past few months, some customers have been unable to pull in parts to support their current upside.
Microns new 5200 series slow to be adopted
Micron SSD supply for the EOL 5100 series has yet to completely cease, because the new 5200 series only comes in the 2.5” form factor. Overall in August, the 5100 M.2 SATA has proven to be in higher demand than the new 5200.
Samsung shifting SSD production facility in light of tariffs
Samsung has moved their production plant to Korea so most new series SSDs will have a non-China country of origin (COO), and thus, not be affected by the new 15% tariff. Unfortunately, some older series like the PM863a will be affected by the tariff as they have a China COO.
Slow market demand for GPUs
Despite the significant improvement in functional performance on the upgraded RTX Super cards, the overall shipments volume is still on the downtrend as demand from server makers is weak. Furthermore, as a result of US & China trade war, SIs are forced to focus on lower-grade GPUs, such as GTX1050/1650/1660, to maintain their profit margin.
RTX2080 Super should also help Nvidia compete with AMD’s mid-range GPUs. Nvidia seems slightly behind in this arena since AMD partnered with TSMC on 7NM, of which TSMC has the highest yield rate. Nvidia, on the other hand, is still on the 12NM. There are rumors that Nvidia has been testing the Samsung 7NM, but the results are not satisfactory. Nvidia might be looking at a tough year ahead should they switch their fabrication over to Samsung as Samsung’s 7NM process is not currently as mature as TSMC.
SD card supply will be constrained through Q2 2020
Supply for Sandisk and Western Digital SD cards is a huge issue, especially on the 8GB and 16GB. Last month, we saw prices increase to 30%, and current lead time has stretched to 20-25 weeks. This price hike is expected to continue until Q2 2020 because memory production output has been reduced.
MEMORY
Memory chips remain in balance despite Japan-South Korea trade tension
Recent fears concerning the impact the Japan-South Korea trade tensions would have on the pricing of memory chips appear to be improving. DRAM prices have only experienced minor adjustments in recent months, and expert opinions are mixed as to where pricing levels will move in the short-term and into 2020.
Chip manufacturers, currently, have not shown signs of inventory issues, which suggests a concerted effort to gain more pricing control over their products. Memory chip pricing is expected to fluctuate throughout Q4 and eventually level off in 2020.
DIMM prices are dropping
The past month has been interesting for the memory DIMM market with pricing starting to drop again after a slight spike due to the Korea-Japan trade war. Rumors are circulating that customers have pushed back on pulling-in product, and prices for DIMM and RDIMM are continuing to fall at least another 5-7%. This fall opens the door for successful cost savings opportunities, something that may be interesting for those experiencing inventory issues.
Pricing for SODIMM and UDIMM is slowly returning to a downtrend with slight decreases pricing around 7-10%. However, supply remains tight for 4GB SODIMMs & UDIMMs.
Samsung expects next quarter to show an increase in demand for DDR4 16GB and 32GB availability, which will subsequently lead to a price decrease for all related chips as well. While DDR4 demand increases, DDR3 is expected to stay stable with no price change.
Micron is deliberately enforcing tight allocation and is not willing to quote directly to the open market, these allocations are expected to continue well into the next quarter.