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2023/02/01
According to TrendForce, Apple is expected to adopt Micro LED for its consumer electronic products in the close future The Apple Watch will likely be the first among Apple’s products to feature a Micro LED display, and the adoption is anticipated to occur in 2024 Then, during the period from 2026 to 2030, the application scope of Micro LED could expand to encompass AR headset displays, smartphone displays, automotive displays, etc
The Apple Watch as a product line was launched in 2015 and has been in the market for more than eight years The Apple Watch Ultra as the latest model was released near the end of 2022 and offers improvements to display specifications Apple enlarged the display size to 193 inches and raised the display brightness level to 2,000 nits These upgrades indicate that smartwatch brands continue to seek a larger and sharper display that can show texts clearly in an outdoor setting TrendForce believes Apple will make a breakthrough for its smartwatch in 2024 by incorporating Micro LED With this technology, the display of the Apple Watch could exceed 2 inches and achieve an even higher contrast level Such improvements would satisfy the viewing needs of professionals and enthusiasts of various outdoor sporting activities
Apple Watch Will Facilitate Entry of Micro LED Display into Market for Mainstream Consumer Electronics
TrendForce points out that Apple has always been careful about adopting a new technology, and its process for evaluating a new technology is very lengthy On the other hand, once Apple has decided to use a particular technology, the company usually tries to apply it across different product lines Take OLED display as an example Besides being incorporated into the Apple Watch and the iPhone, OLED display is expected to be featured in the iPad models for 2024 and the MacBook models for the 2025~2026 period With the penetration of OLED among Apple’s products serving as the prime case study, TrendForce believes Apple will begin the gradual introduction of Micro LED starting in 2024
Whether Micro LED is incorporated into smartwatches, AR headsets, or smartphones, two major factors will determine the market competitiveness of this technology The first factor involves lowering the costs of Micro LED chips A notable solution to make the production of Micro LED chips much more economical is to enlarge the wafers that they are made from Currently, the production lines for the mainstream Micro LED chips take in 6-inch wafers Switching to 8-inch wafers will certainly result in a considerable cost reduction The second factor is about flexibility Micro LED has to work with different types of backplanes that contain glass, CMOS, etc A reliable semiconductor manufacturing process is needed to serve as the basis for scaling up production Such process is also critical for the provisioning of a total solution (ie, from chip production to mass transfer, inspection, and repair)
Among suppliers for LED chips, ams OSRAM has formed the tightest collaborative relationship with Apple in the field of Micro LED at this moment because it has advantages in addressing the two aforementioned factors In the future, ams OSRAM will very likely become Apple’s key partner in supplying the Micro LED components that are embedded in next-generation displays
Micro LED Remains Apple’s First Choice in Selection of Future Display Technologies Due to Considerations Pertaining to Loss of Display Brightness and Impactful Product Innovations
Looking at the new kinds of display technologies that have emerged lately, Micro OLED and Micro LED are ones capable of meeting the demand for a high number of pixels per inch (PPI) However, Micro OLED cannot reach the higher level of brightness that Micro LED can achieve due to some inherent material-related limitations Currently, there is a market rumor saying that Apple will be unveiling a headset device featuring a Micro OLED display this year Nevertheless, in the development of AR headsets over the medium to long term, TrendForce believes building a headset with a completely transparent display will require an optical waveguide technology However, incorporating optical waveguide will reduce the original brightness of a display by as much as 99% Therefore, Micro LED with its huge brightness advantage can provide the sufficient leeway to compensate for this massive loss of brightness If Apple wants to release an AR headset or a pair of AR glasses that features a completely transparent display in the future, then Micro LED is most likely its first choice for the display technology
Turning to the smartphone market, most brands in the Android camp have made foldable OLED display a main design feature for their upcoming flagship models However, Apple as the second largest smartphone brand has yet to enter the much-discussed market segment for foldable OLED models TrendForce believes a possible reason as to why Apple is slow to enter this segment is its focus on Micro LED In addition to rigid backplanes that have glass and CMOS, Micro LED is also highly suitable for flexible backplanes made of PI or other kinds of materials with similar attributes And by adopting Micro LED, Apple may be able to make iPhone displays foldable, rollable, and even “stretchable” in the future Hence, Micro LED has the potential to be the key technology that Apple will use to realize game-changing product innovations and thereby get further ahead of other brands in the market competition
For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms Vivie Liu from the Sales Department at vivieliu@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/12/28
The operation of Foxconn’s major manufacturing base in the Chinese city of Zhengzhou has been affected by a local COVID-19 outbreak since this October As a result, the capacity utilization rate of the base has yet to risen above the level of 70% The outbreak in Zhengzhou was at its worst just as Apple was trying to ramp up sales of the new iPhone models for this year (ie, the iPhone 14 series) to a peak Furthermore, the new Pro models have been in high demand, so Apple has kept raising their share in the overall iPhone production Hence, Foxconn as the sole assembler of the new Pro models has been under significant strain Besides the Zhengzhou base, Foxconn is also drawing support from its other major base located in the Chinese city of Shenzhen However, this move still not enough to bring an immediate relief to the current capacity crunch Given this situation, TrendForce has corrected down its projection on the total shipments of all iPhone 14 models in 2022 to 781 million units
Foxconn Is No Longer Sole Assembler for iPhone Pro Models as Apple Has Tapped Luxshare for Production of iPhone 15 Pro Max
For years, Apple has outsourced the assembly of iPhone Pro models exclusively to Foxconn However, due to the imperative of risk management, getting a second EMS provider for this task has been under consideration for some time as well Apple is reportedly to have made the plan of using another EMS provider besides Foxconn for the assembly of the iPhone 14 Pro models in near future This will serve as a trial run for diversifying its partners and locations for iPhone production Moreover, due to the recent outbreak at Zhengzhou, Apple has also made decision of employing Luxshare as one of the assemblers for the upcoming iPhone 15 Pro Max However, Luxshare’s only iPhone assembly plant is located in China In Vietnam, Luxshare has a plant for assembling Apple-related accessories, but the company currently has no plan for setting up a new iPhone production line there
Efforts Are Taking Place in Supply Chain to Rapidly Raise Portion of Device Production Based in India and Vietnam
Because of the growing concern about geopolitical tensions, Apple intends to significantly expand the number overseas production sites that are outside China For 2023, Apple aims to double its device production capacity in India and have factories in Vietnam start making contributions by the middle of the year In view of the escalating trade dispute between China and the US, Apple will be compelled to rely only on production sites outside China to meet the sales demand of the North American market In order to realize this, TrendForce believes that at least 30~35% of Apple’s entire device production capacity will have to be located in Vietnam and India Therefore, Apple will need to keep raising the share of device production based in these two countries over the next several years
China Is Experiencing Labor Shortage After Loosening Pandemic-Related Restrictions, so iPhone Shipments Are Forecasted to Drop by More Than 20% YoY for 1Q23
TrendForce further points out that China’s supply chain has started to experience a labor shortage this December This has to do with the Chinese government making a significant change to its policy for addressing COVID-19 outbreaks and the general preparation for the impending Lunar New Year holiday There are also signs that the labor shortage could get worse Hence, on top of the various headwinds that are affecting the global economy, Apple is again facing a lack of manpower that constrains its device production TrendForce has corrected down its forecast of iPhone shipments (including all existing models) in 1Q23 to 47 million units, with the corresponding YoY decline coming to 22%
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/12/23
According to TrendForce’s latest analysis of the industry chain for photovoltaic (PV) products, buyers of PV wafers have become less willing to stock up Furthermore, with the arrival of the year-end holidays in the overseas markets (ie, the regional markets outside China) and the approaching Lunar New Year holiday at the start of next year, the downstream sections of the industry chain are now heading into the traditional slow season Polysilicon prices have started to drop At the same time, wafer suppliers are also accelerating inventory reduction in order to limit the corresponding decline in wafer prices However, even as wafer suppliers plan to lower their capacity utilization rates ahead of the slow season, new entrants are joining the market and are rapidly adding more production capacity Due to the combination of mounting inventory pressure and intensifying competition, wafer prices have begun to fall noticeably since the start of this December Based on recent wafer transactions, TrendForce estimates that prices (in RMB per piece) of M10 wafers have fallen by 195% MoM for December Among different wafer sizes, M10 appears to have suffered the largest price drop
TrendForce further points out that prices of polysilicon materials, PV cells, and PV modules will be on a slide going into 1Q23 Regarding the polysilicon market, prices kept climbing for the most part of this year By November, Tier-1 polysilicon suppliers were still seeing production capacity being fully booked However, Tier-2 suppliers began to noticeably lower their quotes in the same month Moving into December, the growth of new orders is starting to decelerate, and Tier-1 suppliers are seeing inventory piling up after they have completed the orders for the earlier periods Just as demand is slowing down, the growth of polysilicon production capacity has been picking up over the months In view that supply is no longer tight, TrendForce estimates that polysilicon prices (in RMB per kilogram) have fallen by 83% MoM for December The average price is also estimated to reach around RMB 275 per kilogram
Facing declining prices in the upstream sections and cooling demand in the downstream sections, module suppliers have also become less keen on procuring more cells The cell market was in tight supply for almost a year, but this situation has eased as cell suppliers maintain a high capacity utilization rate Hence, cell prices (in RMB per watt) have been showing signs of wobbling this December Prices of large-sized cells are estimated to have dropped by more than 8% MoM However, TrendForce believes cells on the whole will still be the most profitable compared with other sections of the industry chain in 2023 This has to do with the significant degree of differentiation and specificity among cells in terms of production-related technologies
Turning to the module market, it has slowed down since the middle of December as the latest wave of installations in China has come to an end Also, the year-end holiday season has dampened demand in the overseas markets With the decline in wafer prices resulting in a corresponding drop in prices of both polysilicon and cells, module suppliers have also lowered their capacity utilization rates The magnitudes of price declines in the upstream sections are within module suppliers’ expectations Therefore, prices (in RMB per watt) of modules that are to be deployed for next year’s projects are starting to fluctuate as well Some of the winning bid prices for next year’s tenders are now below RMB 19 per watt
Regarding the state of the PV market in 2023, many factors come into play The development of large-scale projects will continue in China European countries will also proceed with their energy transition strategies In the US, the country’s Commerce Department has made the preliminary determination that four Chinese manufacturers for PV products are evading existing tariffs However, installations in the US will accelerate in pace as project developers want to take advantage of the two-year tariff exemption period that has just been granted by the government Taken altogether, these factors will help expand the scale of the PV market next year On other hand, TrendForce warns that the main sections of the industry chain (eg, polysilicon, wafers, and cells) are showing signs of excess capacity Significant declines in prices of PV components and materials will thus occur in market segments where demand has been suppressed during 2022, especially large-scale projects that are sensitive to price fluctuations Furthermore, large-scale projects are going to be the portion of demand that is difficult to gauge They will be a major variable to the growth of the PV market in 2023
For more information on reports and market data from TrendForce’s Department of Green Energy Research, please click here, or email Ms Grace Li from the Sales Department at graceli@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/12/16
Global market intelligence firm TrendForce states that Chinese memory manufacturer YMTC is now at risk of exiting the market for 3D NAND Flash products by 2024 following its formal placement on the Entity List of the US Commerce Department on December 15 From this point forward, the Commerce Department will be reviewing and approving individual transactions related to the exportation, re-exportation, and sales of equipment, technologies, and other related goods from the US to YMTC With acquisitions of equipment parts and technical support from its US partners becoming very difficult and prolonged, YMTC is going to be severely constrained from raising its bit output Hence, its foothold on the market for 3D NAND Flash products is expected to weaken as time goes by
TrendForce points out that without the support of the key equipment providers, YMTC is now facing a huge technical obstacle in the development of its latest 3D NAND Flash technology known as Xtacking 30 In particular, raising yield rate for the 128L and 232L processes is going to be extremely challenging for the Chinese memory manufacturer Taking account of this latest escalation in the US-China trade dispute, TrendForce has further corrected down its projections on YMTC’s supply bit growth rate and the total NAND Flash supply bit growth rate for next year YMTC supply bits were initially forecasted to grow by 60% YoY for 2023 However, there was a massive downward correction that put its growth rate at just 18% Now, YMTC is forecasted to post a YoY decline of 7%, which is a complete reversal from the earlier projections
International Clients Are Gradually Reallocating Orders to Other NAND Flash Suppliers
Besides the impact of the Entity List on YMTC’s output growth, TrendForce has also observed that NAND Flash buyers outside of China now harbor significant reservations about adopting YMTC’s technology A US-based smartphone brand has hold off on procuring mobile storage solutions from YMTC At the same time, PC OEMs that were previously going to qualify YMTC’s client SSDs have temporarily halted the customer sampling and adoption process Based on the latest investigation, TrendForce believes that YMTC will likely be limited to operating only within Mainland China in the future Moreover, since the Chinese memory manufacturer is being seriously hindered in its efforts to advance towards higher-layer 3D NAND technologies, it will eventually lose out on opportunities to gain more market share via capacity expansion activities
After its placement on the Entity List, YMTC could be further prevented from acquiring the critical equipment if the US government opts to broaden the scope of its export control rules For instance, there is a likelihood that Dutch and Japanese equipment providers will join the US sanction regime and stop selling DUV immersion lithography systems to Chinese customers
TrendForce notes that by 2024, YMTC’s competitors will have transitioned to the 2XX-L generation for their primary 3D NAND processes They might even start manufacturing NAND Flash products that have a layer count that is approaching the 300 threshold Conversely, YMTC will have gradually lost its cost competitiveness due to technological stagnation, and the erosion of its market share will continue To avoid this fate, YMTC will have to find ways to get delisted TrendForce is also not ruling out other alternative paths for YMTC as well For instance, the company can go back to manufacturing 2D NAND Flash, or it can transform into a supplier for logic ICs that are made with mature process technologies
Supply-Demand Dynamics of NAND Flash Market Is Now Expected to Improve in 2H23 and Thereby Help Stabilize Overall NAND Flash ASP
Since YMTC’s YoY supply bit growth rate for 2023 has been drastically revised to negative 7%, the YoY growth rate of the total NAND Flash supply bits in the same year has been lowered as well to 202% Correspondingly, the sufficiency ratio of the whole NAND Flash market for the entire 2023 has been revised to 23% from the original projection of 36% Besides the moderation in supply bit growth, TrendForce is also optimistic that procurements will pick up for enterprise SSDs thanks to the price elasticity of demand Moreover, TrendForce is not ruling out the possibility that the overall NAND Flash supply will start to tighten in 2H23 Electronics brands (OEMs) could begin ramping up NAND Flash procurements ahead of time in 2Q23 The rising demand, in turn, could lead to a stabilization of NAND Flash prices during 2Q23 and an eventual rebound in the overall NAND Flash ASP starting in 3Q23
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/12/15
Global market intelligence firm TrendForce reports that the revenue generation momentum of the global IC design industry slowed down in 3Q22 The main factors behind this development were the Russia-Ukraine military conflict, the recent COVID-19 lockdowns in China, the ongoing inflation, and clients undergoing inventory corrections The total revenue of the global top 10 IC design houses came to US$3738 billion for 3Q22, showing a QoQ decline of 53% Qualcomm remained first place in the ranking of the global top 10 IC design houses by revenue for 3Q22 Broadcom returned to second place by overtaking NVIDIA and AMD, who slipped to third and fourth respectively due to weakening demand for PCs and cryptocurrency mining machines
US-Based IC Design Houses Were Able to Offset Revenue Decline for Certain Products Because Their Product Mixes Cover Wide Range of Applications
Regarding US-based IC design houses that were in the top 10 group for 3Q22, Qualcomm recorded a QoQ increase for the sales of smartphone SoCs and 5G modem chips It also made gains in the automotive electronics market by expanding its collaborations with partners in the automotive industry As a result, Qualcomm’s 3Q22 revenue figures for mobile and automotive offerings reflected QoQ increases of 68% and 220% respectively The revenue growth of these two major product categories offset the marginal decline in the revenue for RF front-end chips Qualcomm’s IC design revenue as a whole climbed up by 56% QoQ to US$990 billion for 3Q22 The company sat firmly at the top of the ranking
Broadcom had an impressive result for the sales of its semiconductor solutions in 3Q22 Thanks to the stable demand from the high-end segment of the market for networking devices, its revenue went up by 68% QoQ to US$694 billion Broadcom’s acquisition of VMware is currently being reviewed by the relevant regulatory authorities Once this deal is completed, Broadcom will have a chance to contend for the No 1 spot in the revenue ranking
NVIDIA managed to raise sales for chips deployed in data centers and automotive electronics during 3Q22 However, these gains were not enough to compensate for the freeze in the demand for graphics cards equipped in cryptocurrency mining machines NVIDIA saw a QoQ drop of 326% in the revenue from solutions for gaming and a QoQ drop of 445% in the revenue from solutions for professional visualization Taken altogether, NVIDIA posted a QoQ decline of 140% to US$609 billion
For 3Q22, AMD saw a QoQ increase of 83% in the revenue from businesses related to data centers AMD also saw for the first time that the revenue related to data center solutions exceeded the revenue related client solutions (ie, CPUs for desktops and laptops as well as other SoCs) Nevertheless, weakening demand for consumer electronics had a substantial impact on the revenue from client solutions, and this dragged down AMD’s overall performance AMD posted a QoQ decline of 150% to US$557 billion
Marvell was able to raise its 3Q22 revenue by 25% QoQ to US$153 billion because demand is relatively steady for its networking solutions (eg, chips for data centers, enterprise network infrastructure, and automotive electronics) Turning to Cirrus Logic, it returned to the top 10 group in 3Q22 thanks to its lead in the market for low-power and high-precision mixed-signal processing solutions Even though sales of Android smartphones were weak during that quarter, there was also an increase in the market penetration of certain audio chips for high-end Android smartphones Moreover, Cirrus Logic benefited from an influx of Apple’s orders related to the new iPhone 14 series Hence, its revenue rose by 373% QoQ to US$541 million in spite of the challenging market environment
Asian Design Houses in Top 10 Group All Posted QoQ Drop in Revenue as They Were More Affected by Demand Slump in Consumer Electronics Market
Among Taiwan-based IC design houses in the top 10 group for 3Q22, MediaTek posted a QoQ drop of 116% to US$468 billion Due to Chinese smartphone brands’ weak sales performances and clients undergoing inventory corrections, MediaTek saw a QoQ decline in the revenues from mobile solutions, smart edge platforms, and power ICs Inventory reduction will remain MediaTek’s top priority going forward Turning to Realtek, sales of its solutions for networking and automotive applications remained stable in 3Q22 However, chips for PCs account for about 32% of its product mix, so the considerable shrinking of the demand for consumer electronics during the same period affected its overall performance Realtek’s 3Q22 revenue came to US$979 million, showing a QoQ decline of 55% As for Novatek, SoCs and display driver ICs as its two major product categories suffered a decline in both price and shipments As a result, its 3Q22 revenue fell by 399% QoQ to US$643 million Novatek experienced the steepest revenue drop among the top 10
Will Semiconductor, which is based in Mainland China, posted a QoQ decline of 258% to US$513 million for 3Q22 Since the company mainly offers chips equipped in smartphones (eg, CMOS image sensors, TDDI solutions, and analog ICs), its performance was affected by poor smartphone sales and COVID-19 lockdowns in China
TrendForce points out that IC design houses have different product mix strategies Therefore, demand has been steady for some them whose product mixes are mainly composed of solutions for data centers, networking hardware, IoT devices, automotive electronics, etc On the other hand, demand has weakened significantly for consumer electronics, display panels, and cryptocurrency mining machines, so the revenues from the related solutions have shrunk as well Hence, the revenue results of the top 10 IC design houses for 3Q22 show gains for certain product categories coexisting with losses for others Still, the semiconductor market as a whole has recently been in slump, so more than half of the top 10 posted a revenue decline for 3Q22
Looking at the period from 4Q22 to 1Q23, TrendForce believes that because of the ongoing inflation, promotional activities related to the year-end holiday season will not lead to a significant rise in the overall demand for consumer electronics Also, more time is needed to adjust inventory level for the demand side of the semiconductor market Therefore, these two quarters are going to be very challenging for IC design houses, and the chance is high for them to post negative QoQ revenue results However, IC design houses could also use this downturn period to lower their inventory levels while raising their cash levels They could also introduce their products to other application segments, especially data centers and automotive electronics In doing so, they would be better prepared for the future recovery of the whole semiconductor industry
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
