THE GREENSHEET
The Greensheet: September 2020
GENERAL NEWS
Automotive demand returns
The automotive industry has started recovering from the effects of the COVID-19 pandemic. Between consumers avoiding public transportation and new car models being released, demand is forecast to continue growing in Q4 and into 2021.
In response, automotive manufacturers have either started ramping up production or are expecting to increase production in Q4. This will lead to higher demand for power MOSFETS, which are mainly used in automobiles for energy-conservation purposes. Pricing for this has already increased due to the tight production capacity of the 8-inch wafer (UMC, TSMC and SMIC).
Though there are no supply issues yet, MLCCs may also once again face supply shortages in the coming months. Because there is presently an oversupply in the market, it is unclear how severe this issue will be. But it’s expected shortages could arise as early as October or November.
Additionally, we are hearing that semiconductor manufacturers may shift production away from telecommunications and industrial automation to focus on supporting the automotive industry’s increase in demand.
CPUs
Last few bursts of demand for 9th Gen Desktop CPU?
Continuous demand for 9th Gen Coffee Lake in the open market has caused pricing for common SKUs, such as i3-9100, i5-9400, i5-9500 and i7-9700, to increase. Unless pricing in the open market drops down to that of Intel’s, distributors and vendors will most likely stop pulling in more of the company’s 9th Gen desktop CPUs. Already, suppliers are selling only what’s left of their on-hand stock.
On the other hand, if demand keeps increasing, open market pricing will continue on an upward trend. If the price gap between the 9th Gen desktop and the 10th Gen desktop CPUs narrows sufficiently, customers will eventually switch over to the newer generation desktop – even if it requires a redesign. The change from predecessor to successor is inevitable, making way for Intel’s 10NM desktop CPU.
AMD Ryzen 4000 desktop CPUs to be released
Currently, the AMD Ryzen 3xxx series (Zen 2, Matisse) supply remains constrained in the open market. We are hearing that AMD is preparing for the October 2020 launch of its new AMD Ryzen 4000 desktop CPUs. This will be just in time for the holiday season, which is when consumers traditionally spend the most on new electronics and luxury gadgets.
Mobile supply continues to worsen
The mobile Gemini Lake and Gemini Lake Refresh supply constraint will likely not improve in Q4 and could last until January or February 2021.
There is a rumor circulating that Intel will be shifting production from its 1st generation 10NM Ice Lake mobile CPU to focus more on the 2nd generation 10NM Tiger Lake version. If this is confirmed, then Ice Lake mobile CPU supply is expected to be limited. This is understandable as Intel’s Tiger Lake Mobile CPU is touted to be higher performing and the real contender to AMD’s 4000 Renoir mobile series.
Despite this, we’re hearing that the demand for AMD’s 4000 Renoir mobile series has doubled due to the overwhelming response from the consumer market. Customers are reluctant to switch back to the Ryzen 3000 series ‘Picasso’ in response, since its supply is also limited. We urge customers to pay attention to the Ryzen 3000 series and act decisively as supply will continue to be limited in Q4.
We are also seeing increased demand for the desktop BGA version of the Gemini Lake and Gemini Lake Refresh, Jxxx series. Customers are urged to pay attention to the desktop BGA of Gemini Lake and Gemini Lake Refresh, since the supply forecast is not optimistic.
Server supply constraint leads to low inventory levels at Intel
During the pandemic, OEMs, ODMs and CMs pulled in their forecasted demand much earlier than predicted. This led to low inventory levels at Intel and new production is required to support significant levels of new demand.
One particular series that has been affected by this is Cascade Lake Refresh, which now has a constrained supply. As a result, open market pricing is expected to increase soon. Only time will tell if customers should be paying a premium now to secure supply to meet their demand.
ICs
8-inch wafer supply constraints could lead to semiconductor shortages in 2021
Multiple customers and suppliers have been reporting concerns about wider-scale semiconductor shortages in the future, stemming from present supply constraints of 8-inch wafers.
The global 8-inch foundry rate has been approaching 100% utilization, and though demand is rising steadily, supply has been impacted by the uneven supply of 8-inch foundry equipment. We’re hearing that the supply and demand gap is approximately 20%.
We are already seeing shortages on ST Micro and NXP microcontrollers, the cause of which is believed to be related to the tight supply of wafers and a surge in demand from industrial and consumer sectors from the Asia market.
Additionally, the Chinese government’s push to grow local IC brands has led Chinese manufacturers to buy up wafers, thereby increasing strain on supply. On the other hand, the U.S. government’s restrictions on SMIC, China’s biggest chipmaker, could prevent the company from gaining access to essential manufacturing equipment based on U.S. technology. This will further crimp already-limited foundry capacity and fuel more wafer supply hoarding.
We expect that analog semiconductor supply, and particularly that for power MOSFETs, will see pricing increases in the range of 20% in 2021. This will be worsened by increased demand from the automotive segment and 5G applications. A number of catalogue distributors have reportedly increased inventory levels to a 3-year high in anticipation of severe shortages throughout 2021.
Soaring demand for MCUs results in shortages
Rising demand for electronic devices that support Ethernet and IoT is expected to impact demand for microcontrollers. This will further add pressure to the MCU market as demand has already increased significantly, by 20%, due to wireless interfaces and Bluetooth.
ST Micro’s MCU STM32F01/02/03 series is facing supply constraint. This occurred when ST Micro shifted its production capacity to focus on high-end 5G related products, which is greatly affecting MCU lead times. These shortages have increased open-market stock pricing significantly, exemplified by the rapid escalation of market pricing for STM32F030C8T6.
Another factor that contributed to the supply issue is the raw material shortage of wafers. This has caused lead times to stretch for NXP MCUs. Specifically, NXP LPC540X and LPC11XX lead times have increased to at least 39+ weeks. There is tight control on prices by manufacturers, and distributors are facing audits.
NXP’s production focuses on automotive and industrial products
NXP is focusing production on certain end products. Distributors have mentioned that, for this year, NXP is primarily focusing on automotive products. This includes the 50 million pieces of the FS32K series NXP is currently producing. On the industrial side, MCIMX 6Y/2C series is more suited to POS machine/drone applications, the 8 series is designed with HD 4K TV in mind, and the RT series is geared towards keyboard control.
Additionally, NXP has been trying to overtake STM’s sensor market share with its own product in regard to the MPX series. However, because STM’s sensors are generally more compatible than the MPX series, NXP is planning on giving up this goal.
With pricing and lead times for NXP products continuing to rise, there are no signs that factories will be decreasing prices anytime soon.
Nuvoton Technology finalizes Panasonic Semiconductor Solutions acquisition
Nuvoton Technology has announced the completion of the acquisition of Panasonic’s semiconductor business, which includes 100% of Panasonic Semiconductor Solutions (PSCS). PSCS will be re-named Nuvoton Technology Japan with changes expected to occur in 2021.
Products that will be affected are sensors, microcontrollers, power management systems, MOSFETs, diodes and radio-frequency devices. Passive components, like capacitors and inductors, are not part of the acquisition.
Separately, we are currently seeing a high volume of shortages for Panasonic aluminium capacitors across the board, which is expected to last well into the next quarter.
MEMORY
DIMM market demand experiencing highs and lows
Demand for notebook computers has continued to experience huge growth because of extended stay-at-home orders. The gaming notebook sector, for instance, has exhibited a spike in demand, resulting in market pricing for UDIMMs to increase by 2-3%.
There was also an increase in educational-use and entry-level consumer notebook demand throughout Q2 and Q3, and we observed a minor price hike for low-density SODIMM.
Even though notebook demand remains optimistic, demand may fall short in Q4 compared to the two previous quarters. This may result in a slight dip in price for memory in the coming months.
Additionally, server production is slowing down and server memory price is dropping as a result. Despite a recent spike in China’s buying activity to extend its component inventories before the U.S. government’s export regulations kicks in, the overall server memory segment is still experiencing oversupply. RDIMM pricing may be affected as a result.
“Chinese Giants” sweeping market and lowering memory inventory levels
Impacted by the U.S. trade ban and news that “Chinese Giants” are taking positions in the DRAM and NAND markets, pricing has surged in the spot market, depleting some of manufacturers’ inventories. This has provided a brief respite for distributors who were sitting on elevated levels of inventory due to the prolonged weakened demand in the DRAM space.
There’s a thirst for graphic DRAMs
With the anticipated launch of NVIDIA’s latest range of graphic cards, coupled with Q4’s flagship gaming machine demand boom, we are seeing widespread shortages for GDDR5/6. Correspondingly, market prices have spiked by more than 30%.
STORAGE
SSD demand remains flat
Recent market demand for SSDs has been relatively flat, causing the spot market price to drop throughout the last quarter. It is unknown how much SSD pricing will continue to drop as buying power swings in favor of consumers. Despite the lack of market activity in recent months, major SSD manufacturers, such as Intel and Samsung, remain optimistic of the potential growth within the SSD segment.
The global SSD market is expected to grow over the long-term as it is relatively new technology within the data storage field compared to traditional hard drives. However, in the short-term, we expect the spot market price to drop further if demand does not pick up in Q4.
NVIDIA releases GeForce RTX 30 series graphics cards
NVIDIA has finally revealed its new line of GeForce RTX 30 series graphics cards. To prepare for this launch, approximately 80% of NVIDIA’s production capacity has been allocated to manufacture the new cards. The newly released series has impressive performance gains and a much more attractive price point compared to NVIDIA’s predecessor, the RTX 20 series.
The RTX 30 series is based on the Samsung 8nm die instead of the previous, most commonly used TSMC 7nm die. NVIDIA suppliers have mixed feelings about how this will impact the supply of the RTX 30 series. Some speculate that the supply outlook for RTX 30 will be healthy as it is not bottlenecked by TSMC-packed production, while others believe that major demand for Samsung 8nm will create a supply shortage.
In addition, market demand for RTX 2080Ti is still high. Although the new RTX 3080 model boasts improved performance at nearly half the cost, early reviews have shown that the new triple fan design added to meet the high heat dissipation requirement has made it unable to fit in the server GPU slot.
We are still seeing demand for RTX 2080Ti in certain areas and thus market price is not expected to drop for the coming weeks.
Meanwhile, AMD is going to announce its next-gen GPU on 28 October. Some industry experts predict the next-gen specs will offer comparable or improved performance versus NVIDIA’s RTX 3000 series.
Chipset shortage affecting Quadro series cards
We are hearing there are recent shipment delays of Quadro series cards recently due to the chipset supply shortage. Among the Quadro series, the RTX 6000 is the most affected model. Despite the lead time stretching for another 1-2 weeks compared to the past, we have also heard that regional distributors intend to reduce marketing for certain Quadro models facing shortages, such as RTX 6000 and RTX 8000.