The Dynamic Landscape of the Global Semiconductor and Related Industries

In the ever-evolving realm of the global semiconductor and associated industries, a flurry of significant developments has been shaping the market in recent times. This article delves into the multifaceted trends, from price fluctuations to major investments and technological advancements.

I. Market Price Movements The prices of SSDs and memory modules in the spot market have witnessed a downward trend this week. Some downstream storage manufacturers, eager to boost their performance figures, have resorted to price cuts to stimulate sales. However, the lackluster demand has dampened their efforts, resulting in limited success. In the industry market, although it remains relatively stable, high costs at the resource end have curbed manufacturers' enthusiasm for stockpiling. In the embedded market, while there have been sporadic inquiries, actual transactions have been few and far between. Market visibility is expected to improve as official prices from original manufacturers are finalized and new terminal products gradually emerge.

II. Key Industry Investments and Expansion Plans

1. SK Hynix's Ambitious Investment SK Hynix has announced a substantial investment plan. Over the next five years, it will invest 103 trillion won (approximately $747 billion), with around 80% (82 trillion won, about $595 billion) earmarked for AI-related areas such as high-bandwidth memory (HBM). This investment is aimed at enhancing its competitiveness in the semiconductor business. By 2028, SK Hynix aims to significantly expand its capabilities in these crucial sectors.
2. Samsung's Strategic Moves Samsung is pushing for maximum production on its memory production lines. It is anticipated that by the end of the year, the monthly HBM production capacity will reach 170,000 pieces. Samsung has also been making significant investments in HBM since the beginning of this year, striving to convert existing traditional DRAM and NAND production lines into advanced product lines both at home and abroad.
3. Wuhan's Initiative for the Integrated Circuit Industry At the Wuhan Global Investment Promotion Conference, Wuhan announced the establishment of two government industrial funds - the Wuhan Industrial Development Fund and the Jiangcheng Industrial Investment Fund. These funds will focus on key industries such as integrated circuits, with the goal of attracting 300 billion yuan in investment within 3 to 5 years to drive industrial upgrading and regional economic development.

III. Technological Advancements and Product Launches

1. Samsung's Technological Breakthroughs Samsung has developed the first 3nm smartwatch AP, 'Exynos W1000'. This chip supports LPDDR5 memory, integrates 32GB eMMC, and offers wireless connectivity features such as Bluetooth LE audio, NFC, and Wi-Fi. Additionally, Samsung is developing the '3.3D advanced semiconductor packaging technology' under the leadership of its Advanced Packaging (AVP) department, with the aim of mass production in the second quarter of 2026 for application in AI semiconductor chips.
2. SK Hynix's Product Development SK Hynix is collaborating with global PC customers to validate a new high-performance SSD for AI PCs. This SSD boasts sequential read and write speeds of up to 14GB/s and 12GB/s respectively. Once the validation is complete, mass production is planned to start within this year, with products targeting both large customers and ordinary consumers.
3. Micron's Technological Progress Micron has made smooth progress in the trial production of 1γ DRAM. Currently, all of Micron's mass-produced DRAM chips are manufactured using DUV lithography machines, but in 2024, it began EUV technology trial production for the 1γ process, with plans to achieve mass production in 2025.

IV. Industry Sales and Market Trends

1. Global Semiconductor Sales in May In May, the global semiconductor industry achieved sales of $491 billion, a year-on-year increase of 19.3% and a month-on-month increase of 4.1%. This represents the largest year-on-year increase since April 2022. By region, the Americas market witnessed a substantial year-on-year increase of 43.6%, while China, Asia-Pacific/All Other Regions also saw growth of 24.2% and 13.8% respectively compared to the same period last year. In contrast, Japan and Europe experienced decreases of 5.8% and 9.6% respectively.
2. Japanese Semiconductor Equipment Sales Forecast Benefiting from the popularity of AI, the demand for GPUs in AI servers is extremely strong, and the demand for HBM used in conjunction is continuously surging. As a result, the Semiconductor Equipment Association of Japan (SEAJ) has revised upward its sales forecast for Japanese-made semiconductor equipment. In the 2024 fiscal year, it is expected to break through the 4 trillion yen (approximately $249 billion) mark for the first time in history, setting a new record.
3. South Korea's Semiconductor Exports in June South Korea's semiconductor exports in June reached $13.42 billion, hitting a record high and maintaining an upward trend for eight consecutive months. The South Korean Ministry of Industry attributes this growth to the rising prices of storage chips and the robust demand in the cloud computing and artificial intelligence sectors.

V. Company-specific Developments

1. Revenue Highlights
   • Weiying Technology: In June, Weiying Technology's monthly revenue reached NT$30.758 billion, a year-on-year increase of 36%. The cumulative revenue in the first half of the year was NT$147.109 billion, demonstrating its strong growth momentum in the AI server market.
   • Ten铨科技: Ten铨 Technology's revenue in June increased by 6% month-on-month. Regarding the memory market, Ten铨 believes that the demand for DDR4 products in the third quarter in the retail channel is expected to remain flat, and the price is likely to stay at the current level. For DDR5, due to insufficient supply from original manufacturers, the price will continue to rise slightly.
   • Nanya Technology: Nanya Technology's revenue in June increased by 36.8% year-on-year. The company's general manager, Li Peiying, previously stated at a shareholders' meeting that the key factor in the recovery of the storage industry this year is the strong demand for HBM driven by the momentum of AI servers. However, the difficulty in manufacturing HBM and the low yield rate consume more production capacity, thereby promoting inventory digestion. The market situation is expected to improve quarter by quarter.
2. Production and Supply
   • China Telecom's Server Procurement: China Telecom has launched a centralized procurement project for servers (2024 - 2025). The tender announcement shows that there are 13 bid packages in this procurement project, with an estimated procurement volume of 156,000 units.
   • Kioxia's New Product Launch: Kioxia will start mass-producing its most advanced 218-layer 3D NAND Flash at its Yokkaichi plant in July. Compared with the current products, the storage capacity has increased by approximately 50%, and the power consumption required when writing data has been reduced by about 30%.
   • Jiangbolong's Overseas Expansion: Zilia (Smart Memory Brazil) has launched Jiangbolong's product line and announced a new investment plan. The new product line will utilize Jiangbolong's advanced storage equipment, product technology, and packaging processes to enhance Smart Memory Brazil's production capabilities in areas such as embedded memory (eMMC, UFS), memory modules, and solid-state drives (SSDs), thereby meeting the demand for locally made products in the Americas market.
3. Company Reorganization and Strategy Adjustment
   • Samsung's Business Restructuring: Samsung's System LSI department, responsible for chip design, is undergoing business and organizational restructuring. It will prioritize the development of AI chips, and as a result, the company has slowed down the development of automotive semiconductors.
   • Unigen's Capacity Expansion: In response to the increasing number of server customers and order demands, Unigen will expand its production capacity in Mexico. It is expected that a new production line will be opened in the third quarter of this year. In the long term, the planned capacity in Mexico is at least five times larger than that of the Taoyuan plant.

VI. Industry Challenges and Competition

1. Antitrust Concerns
   • Nvidia's Regulatory Scrutiny: After the release of the generative AI application ChatGPT, the demand for Nvidia chips has grown significantly, but it has also triggered regulatory reviews in multiple countries. Nvidia is facing potential antitrust accusations from French regulatory authorities.
   • EU's Consideration of Antitrust Investigation against Samsung and Google: Samsung Electronics established a partnership with Google at the beginning of this year and pre-installed Gemini Nano and Gemini Pro in the S24 series. The EU is considering launching an antitrust investigation into this 'artificial intelligence cooperation' between Google and Samsung Electronics.
2. Market Competition in HBM Micron Technology has officially entered the high-bandwidth memory (HBM) market, breaking the long-term dominance of Samsung Electronics and SK Hynix. Although it is a latecomer, Micron has already started supplying a small amount of products to Nvidia, forming a tripartite competition in the HBM field.

VII. Future Outlook and Expectations

1. HBM Market Growth Projections The market share of HBM chips has increased significantly with the growing demand from artificial intelligence, high-performance computing, and data centers. The HBM production capacities of Micron Technology and SK Hynix have been sold out until 2025, and Samsung, although temporarily lagging behind, is accelerating its efforts to catch up. The HBM4 technology is expected to bring changes such as increased interface width, more layers, and reduced power consumption to meet future market demands.
2. AI PC Market Penetration in Japan Japanese commercial AI PCs are expected to experience rapid penetration in the next five years. It is predicted that by 2028, AI PCs will account for two-thirds of the total shipments of Japanese commercial PCs, and this proportion will further increase to 70% by 2030.
3. Memory Market Trends CFM reports that some manufacturers have recently placed additional orders for DDR5 memory modules. In the server field, the demand for DDR4 and DDR5 has shown a stark contrast. The price of DDR4 in the spot market is inverted compared to the original factory price, and downstream terminal inventories are high, resulting in weak overall demand. For DDR5, with the upsurge in AI construction and the increasing penetration rate of Intel's SPR CPUs, the demand has skyrocketed. It is reported that the demand for DDR5 from server ODMs will also increase to 50% in the second half of this year, and the demand for DDR5 64GB and above remains strong, showing an overall supply shortage in the market.

In conclusion, the global semiconductor and related industries are in a state of flux, with various factors such as technological innovation, market demand, and investment strategies influencing their development. The coming years will undoubtedly witness further exciting changes and fierce competition in these dynamic sectors.