• Near-term sentiment among major semiconductor vendors is generally soft as inventory digestion continues. The long-term semiconductor outlook is positive, with hopeful optimism for a 2H’2025 recovery. Major analysts project robust annual growth rates, with the industry potentially reaching a trillion dollars by 2030 (up from $553B in 2023).
• Positive momentum on EVs and Advanced Driver-Assistance Systems (ADAS); Semiconductor content per vehicle continues to grow. China leads in EV adoption. Robust growth is also seen in the data center infrastructure segment fueled by investments in high-performance AI computing. Relatively softer Personal Electronics demand – AI features anticipated to drive replacement but not seen within 2024.
• Semiconductor capacity utilization rates below the optimal level and fluctuate between 65% and 80% across various suppliers. There is some near-term cautiousness and adjustments in Capex but long-term plans are still in play especially those supported by localization efforts such as the U.S. CHIPS Act and others. Greater China + 1 investments are being made by many suppliers to have geographically diverse COOs (Country of Origin).
• Lead times, Cancellation & rescheduling privileges, and Supply Chain programs have returned to pre-COVID normalcy.     
• Suppliers are under pressure to increase factory utilization by offering competitive pricing on standard semiconductors to win business and move inventory. Automotive & AI-related components, such as memory are seeing higher ASPs due to resilient demand. Rising foundry costs put upward pricing pressure on High-End Semis & advanced nodes.
• Suppliers continue to proactively advise customers to maintain accurate order loading and forecasting to avoid potential shortages when demand inevitably surges again. They caution against complacency in the current environment of short lead times, which would quickly change with a sudden influx of unforecasted demand.
• Market Sentiment and Projections: Near-term sentiment among major semiconductor vendors remains soft due to ongoing inventory digestion. However, the long-term outlook is positive, with expectations of recovery in the second half of 2025. Analysts project robust annual growth, with the industry potentially reaching a trillion dollars by 2030, up from $553 billion in 2023.
• Sector-Specific Trends: 
  • EVs and Advanced Driver-Assistance Systems (ADAS) are experiencing positive momentum, with semiconductor content per vehicle on the rise. China is leading in EV adoption.
  • The data center infrastructure segment is seeing robust growth, fueled by investments in high-performance AI computing.
  • Personal Electronics demand remains relatively softer, with AI features anticipated to drive future replacements, although not evident in 2024.
• Capacity Utilization and Investment Strategies:
  • Semiconductor capacity utilization rates are fluctuating between 65% and 80%, with some near-term cautiousness affecting Capex adjustments. Long-term plans are still being pursued, particularly those supported by localization efforts such as the U.S. CHIPS Act.
  • Greater "China + 1" investments are being made by many suppliers to ensure geographically diverse COOs (Country of Origin).
• Operational Normalcy: Lead times, cancellation & reschedule privileges, and supply chain programs have returned to pre-COVID normalcy.
• Pricing Dynamics and Inventory Management:
  • Suppliers are pressured to increase factory utilization by offering competitive pricing on standard semiconductors to win business and move inventory.
  • Automotive and AI-related components, such as memory, are seeing higher ASPs due to resilient demand.
  • Rising foundry costs are putting upward pricing pressure on high-end semiconductors and advanced nodes.
• Forecasting and Supply Management: Suppliers continue to advise customers to maintain accurate order loading and forecasting to avoid potential shortages when demand surges again. They caution against complacency in the current environment of short lead times, which could rapidly change with an influx of unforecasted demand.

Texas Instruments

Category	Details
Most Recent Earnings Release	Revenue: $4.15B (-8% YoY, +9% QoQ). Net Income: $1.36B. EPS: $1.47.
Next Quarter Forecast	Revenue: $3.7B-$4.0B. EPS: $1.07-$1.29.
Industrial	Declined low-single digits QoQ due to inventory reductions. Ongoing weakness expected.
Automotive	Increased upper-single digits QoQ driven by China's EV market. Growth anticipated.
Consumer/Personal Electronics	Up ~30% QoQ. Recovery observed. Stabilization expected.
Enterprise/Data Center	Up ~20% QoQ. Stabilizing demand.
Communications Equipment/Infrastructure	Up ~25% QoQ. Recovery signs. Moderate growth expected.

 

NXP Semiconductors

Category	Details
Most Recent Earnings Release	Revenue: $3.25B (-5% YoY, +4% QoQ). Net Income: $718M. EPS: $2.79.
Next Quarter Forecast	Revenue: $3.0B-$3.2B. EPS: $2.26-$2.66.
Industrial	Revenue: $563M (-7% YoY, -9% QoQ). Weakness expected due to macro challenges.
Automotive	Revenue: $1.83B (-3% YoY, +6% QoQ). Growth driven by EV and ADAS developments.
Consumer/Personal Electronics	Revenue: $407M (-8% YoY, +18% QoQ). Stabilizing demand.
Enterprise/Data Center	Revenue: $451M (-19% YoY, +3% QoQ). Gradual recovery continues.
Communications Equipment/Infrastructure	Unexpected strength in Communication Infrastructure (mainly secure transactions).

 

Microchip Technology

Category	Details
Most Recent Earnings Release	Revenue: $1.16B (-48.4% YoY). Net Income: $78.4M. EPS: $0.14.
Next Quarter Forecast	Revenue: $1.025B-$1.095B. EPS: $0.25-$0.35.
Industrial	Stable performance with slight growth. Steady outlook.
Automotive	Strong growth driven by EV and microcontroller demand.
Consumer/Personal Electronics	Declined due to reduced consumer electronics demand. Weakness expected.
Enterprise/Data Center	Revenue increased due to higher storage demand. Steady outlook.
Communications Equipment/Infrastructure	Moderate growth expected due to cyclical recovery.

 

Onsemi

Category	Details
Most Recent Earnings Release	Revenue: $1.76B (-20% YoY). GAAP EPS: $0.93. Non-GAAP EPS: $0.99.
Next Quarter Forecast	Revenue: $1.71B-$1.81B. Non-GAAP EPS: $0.92-$1.04.
Industrial	Declined 6% sequentially, 29% YoY. Industrial SiC customer count over the last four quarters increased 17% as compared to the previous 4 quarters. Revenue forecast flat to down next quarter.
Automotive	Up 5% QoQ declined 18% sequentially due to EV sales slowdown and inventory oversupply. Automotive is going to be up low to mid-single digits just with the SiC continuing to ramp.
Consumer/Personal Electronics	Not specifically commented.
Enterprise/Data Center	In data centers, Onsemi sees opportunities in the power delivery market for enterprise, cloud, and AI servers to double from $2.2 billion in 2024 to $4.4 billion by 2028.
Communications Equipment/Infrastructure	Not specifically commented.

 

Infineon Technologies                  

Category	Details
Most Recent Earnings Release	Revenue: €3.92B (-6% YoY). Net Loss: €84M (Due to settlement related to Qimonda).
Next Quarter Forecast	Revenue: ~€3.2B. Segment Result Margin: mid-teens.
Industrial	Facing revenue decline due to weak demand in industrial equipment.
Automotive	Up 2% QoQ. Anticipate a slight decrease in FY2025 due to the slow EV market and competition from Chinese manufacturers.
Consumer/Personal Electronics	Stable sales anticipated.
Enterprise/Data Center	Infineon anticipates moderate revenue growth in this segment for FY 2025.
Communications Equipment/Infrastructure	The company projects stable sales in this segment for FY 2025.

 

STMicroelectronics

Category	Details
Most Recent Earnings Release	Revenue: $3.25B (-26.6% YoY, +0.6% QoQ). Net Income: $351M.
Next Quarter Forecast	Revenue: ~$3.32B. Gross Margin: ~38%.
Industrial	Industrial declined by more than 50% YoY, down 12% QoQ. Decline attributed to high inventories and falling demand.
Automotive	Continuing delayed recovery in industrial and a further deterioration in automotive. STM believes this reflects a change in the plans of customers to shift from full battery electric to hybrid and from premium to economy vehicles.
Consumer/Personal Electronics	Personal Electronics by about 9% YoY and up about 20% QoQ.
Enterprise/Data Center	Not specifically commented.
Communications Equipment/Infrastructure	Communication Equipment and Computer Peripherals by about 5% YoY, down 8% QoQ.

SUPPLY

• The global business landscape in 2025 is expected to remain uncertain due to ongoing geopolitical conflicts, subdued market demand, and regulatory pressures, with most sectors not seeing significant growth, except for the AI sector.
• Excess inventory remains a persistent issue, despite efforts by buyers to utilize surplus stock and suppliers to reduce production.
• In the first half of 2025, some growth is driven by a sustained surge in AI-related semiconductor demand, while forecasted demand from the automotive and industrial sectors remains weak.
• Governments and companies are investing heavily to strengthen the semiconductor supply chain by diversifying manufacturing locations and enhancing local production capabilities, aiming to enhance resilience and ensure a more stable supply chain.
• Supply and demand imbalances for components are expected to persist due to limited new supply during the ongoing inventory correction, with most suppliers reporting low demand and operating at around 70% capacity with a book-to-bill ratio below 0.7.
• Geopolitical influences are prompting Asian suppliers to expand their OSAT operations outside of China, specifically in Malaysia, Thailand, and the Philippines, in line with the China Plus One strategy.
• End customers are increasingly inquiring about the Country of Origin (COO), but there is no definitive change to business decisions yet. Many companies are on standby, assessing potential risks and impacts, especially following the recent US presidential election.
• Here are some of the highlights from the key suppliers:

Texas Instruments (TI)

• Q3 2024 revenue reported at $4.15 billion, with a decline in the industrial sector but growth in other markets.
• TI is expanding with new investments in RFAB, LEHI FAB, and Sherman FAB to compete with peers and increase market share.
• Lead times are now mostly 10-12 weeks, with the cancellation & reschedule window reduced from 4 weeks to 2 weeks for most standard products.

Monolithic Power Systems

• Lead times have improved to 26 weeks for both standard and automotive products.

Onsemi

• Facing market softening except in AI-related areas, with the EV market remaining very soft and no anticipated demand ramp-up in 2025.
• Inventories are still widely available at distributors and end customers.
• Standard Analog products (AC/DC, DC/DC, Interface like RS232, R485, VR, LDO, Driver, Mixed Signal/Amplifiers, and Comparators) quoted at 12~20 weeks lead time.
• Improvement in cancellation and rescheduling window to 60 days for PSG (Power Solutions Group) parts, excluding automotive.

Renesas

• General lead time for Analog & Power products is now estimated between 12 to 24 weeks.
• Cancellation and change order window revised from 90 days to 45 days from the confirmation date for Analog & Connectivity, Power, and Embedded Processing Product Groups.
• High-Performance Computing (HPC) products maintain a 90-day cancellation window, primarily NCNR (Non-Cancelable Non-Returnable).

Diodes, Inc.

• Soft demand in the market with excess inventories available at the end customer and distribution channels.
• Lead times are expected to be between 10 to 16 weeks.

STM

• Book-to-bill ratio is less than 1; no strong demand is anticipated for the first half of 2025.
• Most lead times have returned to normal supply status, although inventory correction is ongoing due to earlier implementation of NCNR (Non-Cancelable Non-Returnable), leading to building the wrong mix of products.
• Standard Linear Product Lead times have improved to 12-20 weeks for AC/DC, DC/DC, and 12-16 weeks for Interface (RS232, R485), with Mixed Signal Amplifiers and Comparators at 10-16 weeks.
• Cancellation and rescheduling windows for these standard products have returned to 4 weeks.
• Capex expansion is primarily focused on internal wafer fabs, supporting Automotive MCU, SiC, analog, discrete, MOSFET, and sensors. Most of their MCUs are still outsourced through TSMC’s 8-inch wafer fabs, with some internal fabs like Crolles 12 inches, Rousset, Agrate, Catania (SiC), and Singapore (SiC).

ADI

• Wafer sourcing: 53% external, 47% internal.
• Assembly sourcing: 89% external, 11% internal.
• Final testing: 17% external, 83% internal.
• Lead times: 95% of parts have a lead time of less than 13 weeks.
• Launched ADI EShop for direct purchases.

 

MARKET DYNAMICS

• AI continues to drive significant revenue in the semiconductor sector, particularly for data centers and edge computing applications.
• The U.S. has implemented restrictions on China's access to advanced semiconductors and has banned certain AI components, such as Nvidia's GPUs.
• TSMC plans to raise wafer prices by up to 10% in 2025, in response to increased demand for advanced processors used in smartphones, PCs, AI accelerators, and high-performance computing systems.
• Global politics have significantly reshaped supply chains, creating distinct China-related and non-China-related segments.

WSTS Forecast Summary

Region/Segment	2023 (US$M)	2024 (US$M)	2025 (US$M)	YoY Growth 2023 (%)	YoY Growth 2024 (%)	YoY Growth 2025 (%)
Americas	134,377	168,062	192,941	(5)	25	15
Europe	55,763	56,038	60,901	4	1	9
Japan	46,751	46,254	50,578	(3)	(1)	9
Asia Pacific	289,994	340,877	382,961	(12)	18	12
Total World - $M	526,885	611,231	687,380	(8)	16	13
Discrete Semiconductors	35,530	32,773	35,310	5	(8)	8
Optoelectronics	43,184	42,736	44,232	(2)	(1)	4
Sensors	19,730	18,265	19,414	(9)	(7)	6
Integrated Circuits	428,442	517,457	588,425	(10)	21	14
Analog	81,225	79,058	84,344	(9)	(3)	7
Micro	76,340	77,590	81,611	(4)	2	5
Logic	178,589	197,656	218,189	1	11	10
Memory	92,288	163,153	204,281	(29)	77	25
Total Products - $M	526,885	611,231	687,380	(8)	16	13

Source: wsts.org

 

 

PRICE

• The semiconductor market is expected to see a slight decline in demand in 2025, influenced by global economic uncertainties. Excess inventory will continue to pose challenges in the first half of the year.
• Suppliers are more inclined to offer competitive pricing to maintain production levels, while customers remain conservative with their demand outlook due to shorter lead times currently being offered.
• Prices for high-performance analog products are expected to remain flat, as they are mostly tied to end-customer contract prices.

Recent Pricing Trends:

• Overall, the semiconductor price trend for the first half of 2025 is expected to exhibit moderate fluctuations depending on market conditions.

Company	Price Trend
Renesas	Prices are expected to remain flat
Onsemi	Anticipated to offer some price reductions
Analog Devices	Prices are expected to remain flat
STMicroelectronics	Likely to offer some price reductions
Texas Instruments	Anticipated to offer some reductions to gain market share from competitors

 

 

SUPPLY

• The market is experiencing a delayed recovery in the industrial sector and further deterioration in the automotive sector, attributed to ongoing backlog and order entry dynamics.
• Continued inventory corrections at OEMs and along the value chain reflect a prolonged period of de-stocking, as slow consumption rates prevent significant recovery in semiconductor demand for the first half of 2025.
• In the automotive sector, there was further deterioration observed in customer backlog and order entry during the third quarter. 
• Despite the industry being in a down cycle, distributors continue to adjust inventory in response to weak demand.
• Logic suppliers have reported stabilized delivery lead times due to downstream inventory adjustments, with most suppliers’ capacity utilization still hovering around less than 80% at a book-to-bill ratio of less than 1.0.
• Manufacturers have implemented strategies to support customers by separating shipments from Chinese and non-Chinese supply chains and differentiating wafer tape-out sources for Chinese and non-Chinese customers, preparing for potential escalations in trade and technology conflicts.

RECENT DEVELOPMENTS

Company	Developments
TEXAS INSTRUMENTS	Currently quoting a 6-week lead time on logic products, aiming for a broader market share with competitive pricing and ample supply. Committed to a $5 billion annual investment from 2023 to 2026 for a 300-millimeter manufacturing expansion strategy.
NEXPERIA	Quoting lead times of 6-10 weeks and actively seeking more orders on Pico Gates Logic, with improved market visibility as extended inventory correction concludes in major segments like PCs and smartphones.
ONSEMI	Added a dual source of standard logic wafers with Vanguard Semiconductor (Taiwan) and consolidated backend manufacturing sites for similar packages, covering 90% of their logic portfolio (except for metal gates), which has improved supply and lead time.

 

 

MARKET DYNAMICS

• Despite a sluggish global chip market outside AI applications, leading suppliers of automotive, power control, and industrial chips are expanding in China’s industrial and EV sectors.
• Analysts warn that localization pressures from the US, China, and the EU could lead to fragmented supply chains, potentially raising production costs for multinationals and affecting chip availability and consumer prices globally.
• As nations pursue independent agendas, companies face a complex web of compliance, tariffs, and investment mandates that disrupt cross-border operations. This fragmented approach adds negotiation hurdles, inflates costs and hampers efficiency for semiconductor giants striving to meet global demand.
• TI anticipates receiving $6-8 billion in tax credits for U.S. manufacturing investments, which will further strengthen their competitive advantage and expand 300mm manufacturing operations in the U.S.
• TI and the U.S. Department of Commerce signed a preliminary agreement for up to $1.6 billion in CHIPS Act funding, supporting the development of three wafer fabs in Texas and Utah.
• The Bangladesh Semiconductor Industry Association (BSIA) has unveiled a roadmap to boost the country’s semiconductor exports to $1 billion by 2030. The focus is on workforce training and policy support to drive growth.

 

PRICE

• Suppliers are eager to secure more orders by offering competitive prices to capture a larger market share amid sluggish demand, ample supply, and order reductions.
• There is a willingness among suppliers to trade allocation at lower prices, although the industry continues to face challenges due to macroeconomic factors and inventory headwinds.
• Onsemi has joined Texas Instruments and Nexperia in adopting aggressive pricing strategies to win more share of the declining demand and orders on their books.
• Asian suppliers, such as SG Micro, Runic, and Wuxi I-CORE, are actively seeking to gain a larger share within the Logic market.
• Various manufacturers have prepared strategies based on customer requests, ensuring readiness to immediately adjust shipments if trade and technology conflicts escalate in the future.

 

SUPPLY

• Suppliers are faced with a challenging decision due to the market's deceleration: continue production without orders to secure cost competitiveness or reduce output and risk financial losses.
• A modest uptick in inventory levels has been observed, attributed to weakening demand. However, this is not currently a significant issue, as distributors and customers are taking a more conservative approach to order placement.
• End customers are delaying front-loading of demand due to market uncertainty, especially with the upcoming US election. A critical indicator to watch is whether there will be a surge in orders in December and if this increased demand can be sustained.
• Despite these challenges, short-cycle demand persists within the industry.
• Average lead time based on technology:

Component	Lead Time (Weeks)
General Diodes	8 – 10 weeks
Switching Diode	8 – 10 weeks
Schottky Barrier Diode	8 – 12 weeks
ESD & TVS	8 – 12 weeks
Zener Diode	8 – 12 weeks
BJT Transistor	12 – 16 weeks
Low Voltage Mosfet	10 – 13 weeks
High Voltage Mosfet	14 – 26 weeks
SiC	26 – 30 weeks
Automotive Mosfet	18 – 26 weeks

 

• Lead times are trending down for Power MOSFET, Power Diodes, Zener Diodes, and Schottky Diodes, indicating a decrease in demand or improved production efficiency for these components.
• However, lead times for some military or aerospace-grade devices are increasing due to a rise in demand, reflecting specific sector dynamics.
• A slight oversupply is observed in the areas of Small Signal Diodes and Small Signal MOSFET, suggesting a potential adjustment needed in production or sales strategies.
• Manufacturers are expanding their product portfolios and revenue streams by branching out from pure discrete manufacturing into areas like analog power, signal chain, and logic. Notably, Texas Instruments (TI), traditionally an analog power powerhouse, is incorporating diodes into its product line, highlighting strategic diversification.
• A significant increase in the operational capacity of Silicon Carbide (SiC) fabs is expected from 2024 to 2027, driven by strong demand for SiC components, indicative of growing market opportunities in high-performance semiconductor materials.

MARKET DYNAMICS

• The ongoing downturn in the general market, notably in the automotive sector, has led to significant layoffs. For example, Vishay recently announced the closure of three factories and the cut of 800 jobs, and Wolfspeed dismissed their CEO.
• The SiC (Silicon Carbide) market is facing intensifying competition, particularly as China ramps up production of 6-inch SiC wafers, driving significant cost reductions in the market.
• The introduction of 8-inch wafer fabs in 2025 by leading SiC manufacturers is expected to further amplify competition and drive down SiC prices.
• There are several upcoming SiC fabs scheduled to become operational in the next three years, which will likely contribute to the growing market supply and competitive landscape.

Upcoming SiC Fabs

Company	Fab	Location	Capacity (EAU)	Investment (USD)	MP (Mass Production)
STM	8-inch	Catania, Italy	780K	5.2 billion	2026
STM/Sanan	8-inch	Chongqing, China	520K	3.2 billion	End of 2025
Onsemi	8-inch	Bucheon, Korea	1 million	-	2025
Infineon	8-inch	Kulim, Infineon	-	5.2 billion	2025
Wolfspeed	8-inch	Mohawk, New York	-	1 billion	2024
Wolfspeed / ZF	8-inch	Saarland, Germany	-	-	2025
Bosch	8-inch	Roseville, CA, USA	-	1.5 billion	2026
Mitsubishi Electric	8-inch	Kumamoto, Japan	-	645 million	2025
Fuji Electric	8-inch	Matsumoto, Japan	-	12 million	2027
UNT, United Nova Technology	8-inch	Yuecheng, Shaoxing, CN	-	-	2025
Silan Microelectronics	8-inch	Xiamen, CN	720K	1.6 billion	2025
Vanguard & Episil	8-inch	Taiwan	-	-	2026
FT1 Corporation Ltd (FT1)	6 & 8-inch	Thailand	-	350 million	2027
TANKEBLUE	6-inch	Jiangsu, CN	1.5 million	-	2024
San’an Optoelectronics’s	6-inch SiC	Hunan, China	360K	2.51 billion	-
SICC	6-inch / 8-inch SiC	Shangtung, CN	-	312.32 million	2026
Shanghai Xinkehui New Material Co.	Substrate/EPI	Shanghai, CN	-	-	2024
EipWorld International	6-inch	Xiamen, CN	-	99.01 million	2024

Source: Trendforce, Digitimes

PRICE

• Due to a slowdown in the automotive market segment, first-tier manufacturers are more willing to discuss and make minor price adjustments on automotive-grade diodes and MOSFET.
• Commodity parts such as Small Signal Diodes and Small Signal MOSFET are being targeted as part of package deals, with suppliers aiming for a higher market share to maximize factory utilization.
• A significant increase in Silicon Carbide (SiC) production capacity is expected to come online within the next three years, driven by strong demand in the Automotive and Renewable markets. This surge in production capacity is anticipated to lead to higher-than-usual cost reductions moving forward.

 

SUPPLY

• Supply remains healthy across Optoelectronics-related products, although inventory levels are depleting, which could impact the ability to meet sudden surges in demand or short lead-time requests.
• Extended lead times for some product lines are due to manufacturers' hesitance to buffer raw materials for non-common parts. Customers are advised to provide longer-term visibility and sufficient lead time for solid-state relay (SSR) products from Japanese manufacturers.
• The business outlook for 2025 remains uncertain for most suppliers. Many do not have sufficient orders to utilize their full capacity, leading to hesitance in making significant investments. This could potentially cause lead times to increase.
• Demand in the Medical and Industrial segments remains stable, while demand in the Automotive segment has softened.
• Lead time for Global brands ranges from 16-28 weeks, whereas Asian brands have maintained shorter lead times of 8-16 weeks.

 

MARKET DYNAMICS

• The overall market demand for optoelectronics remains flat. Manufacturers are responding to this challenging market environment by announcing lead-time extensions and company restructurings for 2025. Optoelectronics, which often uses older wafer technology nodes, enjoys a comparatively stable supply situation that does not require heavy capital investment.
• There is optimism that AI (Artificial Intelligence) products will positively impact the optoelectronics sector as the demand for data storage and networking is expected to generate significant demand. However, new investments are pending until suppliers observe a stronger market outlook.
• Optoelectronics suppliers such as LiteOn and Everlight are undergoing restructuring to better align with the business challenges expected in the coming months.

 

PRICE

• Pricing is expected to remain stable for the first half of 2025. This stability comes as suppliers closely monitor their pricing levels in response to softening overall demand and increasing costs of raw materials.
• In an effort to secure new business, sockets, or market share, some suppliers are proactively offering discounts.

 

SUPPLY

• DDR4 supply remains stable but demand is declining as the market transitions to DDR5.
• DDR5 faces ongoing production challenges, particularly for High Bandwidth Memory (HBM) and server-grade modules used in AI and data center applications.
• While new semiconductor fabs have come online, ramp-up delays and complex manufacturing requirements are constraining output for advanced memory products.
• Overall, Q4 2024 supply constraints are easing slightly, but high-density memory modules (e.g., DDR5 and HBM) remain tight. Manufacturers are prioritizing AI and server markets over consumer applications.
• Supply Stability Highlights:
  • DDR4/DDR5: Some Constraints
  • HBM:  Some Constraints
  • DDR3:  Few constraints but with some available production options.
  • Legacy (SDRAM, DDR1, DDR2):  Stable; Look to 2nd tier for support.

 

MARKET DYNAMICS

• Market Outlook for the First Half of 2025
  • Analysts predict market stabilization with limited bit growth. AI (HBM) and 5G technologies are expected to see a gradual rise. Despite this, there remains uncertainty in the market, with factories reporting lower lead times and increased product availability.
  • Demand is anticipated to be lower in the first half of 2025, especially for normalizing and HBM products. Lead times are currently normalizing, with no predictions available yet for the second half of 2025.
  • Major suppliers are downgrading their growth predictions for the first half of 2025.
• As the Big 3 suppliers attempt to exit the DDR3 market, sustaining suppliers are reporting free capacity in DDR3. This provides an opportunity for deals as these suppliers seek to support ongoing demand.
• DDR4/DDR5 pricing is expected to increase by as much as 40% into 2025 as suppliers focus on moving towards profitability.
• The bit crossover from DDR4 to DDR5 is currently happening. Manufacturers are prioritizing capacity increases for HBM production for AI applications, which could potentially limit the supply of server DDR4/DDR5.
• PC and server demand continues to normalize, while smartphone demand has started to increase.
• Stakeholders should look for and take advantage of short-term SPOT-market opportunities for lower pricing and oversupply. There is inventory available in the channel, and deals are being made.

 

PRICE

• HBM prices are expected to increase in 2025 due to its critical role in AI data centers and high-performance computing, where speed and bandwidth are paramount. 
• The surge in AI applications has led to HBM demand growth rates nearing 200% in 2024, with expectations to double in 2025.
• DDR5 prices are expected to increase, driven by higher production costs and strong demand from AI and high-performance computing sectors. 
• Price Stability Highlights:
  • DDR4/DDR5: Expect increases through 2025
  • HBM:  Expect increases through 2025
  • DDR3: Some decreasing
  • Legacy:  Some decreasing

SUPPLY

• The supply of Asynchronous and Synchronous SRAM, including Low Power, Fast SRAM, Slow SRAM, and Quad Data Rate variants, remains stable and reliable. This stability ensures uninterrupted operations for applications that depend on SRAM for high-speed and reliable data storage.
• SRAM continues to benefit from its status as a mature technology, resulting in well-established supply chains and reduced susceptibility to disruptions.
• The market is stable with no significant shifts in production or demand, as the lack of major innovations in SRAM technology minimizes volatility compared to emerging memory technologies.
• Supply Stability Highlights:
  • Asynchronous :
    • Low Power: Stable
    • Fast SRAM: Stable
    • Slow SRAM: Stable
  • Synchronous:
    • Quad Data Rate: Stable

 

MARKET DYNAMICS

• A stable demand and supply base currently exists in the marketplace.
• Balanced market conditions are expected to continue throughout the first half of 2025.
• Lead times are expected to normalize into the first half of 2025.
• For constrained supply situations, consider leveraging second-tier suppliers to support needs typically met by first-tier suppliers.

 

PRICE

• SRAM prices are expected to remain stable, supported by a balanced demand-supply dynamic that avoids significant fluctuations.
• The mature nature of the SRAM market, with no major regulatory changes or technological disruptions, further contributes to this stability.
• Manufacturers benefit from predictable demand patterns, allowing them to maintain consistent pricing strategies without significant adjustments.
• Price Stability Highlights:
  • Asynchronous: Stable
  • Synchronous: Stable

SUPPLY

• The NAND Flash market continues to grow due to its essential role in data storage for consumer electronics, cloud computing, and enterprise applications.
• Increased demand is exerting pressure on the supply chain, further impacted by production challenges and slower-than-expected ramp-ups at new manufacturing facilities.
• Shortages of critical components, such as controllers and advanced lithography tools, are constraining NAND Flash production and affecting overall market availability.
• Supply Stability Highlights:
  • Planar NAND: Some Constraints
  • 3D NAND Flash: Some Constraints

 

MARKET DYNAMICS

• Expect Average Selling Price (ASP) increases in Nand Flash products and related products with higher densities, such as eMMC and SSDs, as suppliers aim to return to profitability. It is vital to continue forecasting effectively and take advantage of oversupply pricing and Spot Market opportunities where applicable.

• As major suppliers push for higher pricing on high-density Flash and SSDs, consider pushing back or seeking assistance from Commodity Management. Exploring support from second-tier suppliers might provide additional leverage.

• Hyperscalers, AI, mobile, and PC sectors are looking to buy ahead as market recovery shows signs of improvement. This anticipatory buying is driving short-term demand increases into 2025, and pricing is expected to remain higher for the first half of the year.

• To ensure supply continuity, it's advisable to provide suppliers with as much forecast accuracy and firm orders as possible, especially in the context of rising demand.

 

PRICE

• The demand for 3D NAND Flash continues to grow, placing upward pressure on prices for higher-capacity storage solutions.
• Prices for Planar NAND are also increasing, despite reduced production, due to sustained demand from niche markets and limited supply.
• The complexity and higher production costs of 3D NAND technology, compounded by slower-than-expected yield improvements, are keeping prices elevated.
• Price Stability Highlights:
  • Planar NAND: Increasing
  • 3D NAND Flash: Increasing

 

SUPPLY

• The NOR Flash market continues to see strong demand growth, particularly from automotive, industrial, and IoT applications, driven by its durability, reliability, and fast read speeds, which are critical for real-time and embedded systems.
• Supply chains face challenges in keeping up with demand due to the slower transition to advanced manufacturing technologies for NOR Flash. This delay limits production scalability and increases reliance on legacy production processes.
• Tight supply conditions persist, particularly for higher-density NOR Flash products, as manufacturers focus on balancing legacy demand with new-generation application requirements.
• Supply Stability Highlights:
  • Low-Mid Density NOR:  Some Constraints
  • High Density NOR: Some Constraints

 

MARKET DYNAMICS

• NOR Flash memory is expected to remain in tight supply during the first half of 2025.
• The rising popularity of true wireless products, combined with 5G product launches and continued growth in AI applications, will sustain high demand for NOR Flash memory, further tightening supply.
• NOR Flash Foundry partners are allocating capacity to non-memory products with higher margins, limiting capacity expansion plans for NOR Flash.
• Consider engaging with second-tier suppliers for support and involving Global Commodity Managers (GCM) for alternative solutions.

 

PRICE

• Despite ongoing supply constraints, NOR Flash prices have remained stable due to the alignment between market demand and available supply.
• Strategic inventory management by manufacturers and suppliers continues to play a critical role in maintaining price stability, particularly in the face of potential supply tightening.
• Price Stability Highlights:
  • Low-Mid Density NOR: Flat
  • High Density NOR: Flat

 

SUPPLY

• EEPROM remains a stable and well-established technology with mature manufacturing processes, contributing to a reliable and consistent supply chain.
• Manufacturers are maintaining sufficient production capacity to meet market needs, ensuring the supply remains unaffected by broader semiconductor market volatility.
• Supply Stability: Stable

 

MARKET DYNAMICS

• EEPROM remains a mature memory technology with stable demand and a well-supported supply base.
• Balanced market conditions are expected to continue through 2025.
• Lead times are normalizing as major suppliers maintain sufficient capacity. Second-tier suppliers can also provide additional support where needed.
• Monitoring lead times and providing ample forecasts to suppliers is essential to ensure supply continuity.

 

PRICE

• EEPROM pricing remains stable, supported by steady demand and consistent supply conditions across its niche markets.
• While overall pricing is stable, slight adjustments may occur in response to rising raw material and production costs, though these are expected to be minimal.
• Price Stability: Stable

SUPPLY

• Demand for high-performance SSDs continues to rise, driven primarily by data centers, enterprise applications, and AI workloads requiring faster data access and enhanced reliability for processing large data volumes.
• Supply remains relatively stable for consumer-grade SSDs, but high-density SSDs and enterprise-grade solutions are seeing tighter availability due to production bottlenecks and resource allocation toward premium segments.

 

MARKET DYNAMICS

• SSD growth in automotive applications is expected to outperform previous years in 2025.
• Production and CapEx cuts over the past year have significantly impacted supply, with pricing continuing to trend higher.
• Very high-capacity QLC server SSDs (30TB-60TB) are in high demand for AI applications, with manufacturers reporting sold-out conditions for several quarters ahead. No predictions are available yet for the second half of 2025.
• Growth in Half Height, Half Length (HHHL) SSDs is expected to increase in 2025, driven by better performance provided by these form factors.
• PCIe SSDs are gaining popularity for their higher performance and reduced latency.
• Rapidly increasing demand for SSDs, both Client and Enterprise, is being driven by the growing number of cloud platforms.
• While SSD costs remain higher than HDDs, the cost of 3D NAND Flash is anticipated to change significantly in 2025.
• Consider short-term offers from suppliers and take advantage of pricing opportunities where possible.

 

PRICE

• High-capacity SSDs and enterprise-grade models are experiencing steeper price increases due to their reliance on advanced NAND technology and higher production costs.
• Rising costs of NAND Flash, the primary component in SSDs, continue to exert upward pressure on SSD prices.
• Price Stability: Increasing into 1st half of 2025

 

SUPPLY

• Supply is stable as recent investments in wafer capacity over the past few years are beginning to yield results, contributing to market activity in the second half of 2024.
• The 2025 outlook remains uncertain due to a lack of longer-term orders and visibility in demand.
• Suppliers are prioritizing the development of new products tailored for automotive, IoT, and automation applications, leveraging advanced technologies to address emerging market needs.
• Global brands are actively reviewing their product portfolios to align with growing markets and new applications driven by AI advancements.
• Enhanced EV features are driving continuous product launches and technological upgrades in the sensor commodity, with ongoing reviews to phase out legacy technologies.

 

MARKET DYNAMICS

• Sensors are essential components across automotive, consumer electronics, healthcare, industrial automation, and aerospace sectors, driving widespread adoption.
• Advances in sensor technology enable smaller, smarter, and more affordable devices with better precision, reduced power consumption, repeatability, and digital output. These innovations attract new players with creative ideas, contributing to double-digit growth expected in the sensor market.
• Rising demand across all sectors is expected to encourage new suppliers to enter the market.
• Key drivers for new product and technology innovation include automotive electrification, industrial applications, and healthcare.
• The rapidly growing artificial intelligence (AI) market relies on various sensor types to provide critical feedback on environment, temperature, humidity, navigation, and positioning.
• Infineon and Swoboda have collaborated to develop high-performance current sensors specifically for electromobility applications.

 

PRICE

• Prices have slightly decreased due to the market slowdown and intense competition, with suppliers reducing prices to gain market share and secure participation in new projects.
• Cost reductions from price cuts are being offset by rising material, labor, freight, and foundry costs, creating financial pressure on suppliers to maintain business levels and gross margins.
• Suppliers are adopting a conservative approach as the 2025 market outlook remains uncertain.
• Prices may increase in the second half of 2025 due to sustained cost pressures and uncertain market trends.

SUPPLY

• As of late 2024, most suppliers are operating with capacity utilization below 80% and a book-to-bill (B/B) ratio under 1.0. Inventory levels have improved since Q3 2024 and are expected to continue improving into early 2025, despite revenue headwinds in the first quarter.
• Lead times are gradually reducing, with 70% of products on 12–25 weeks, 25% on 26–35 weeks, and 5% on 36–52 weeks.
• IoT Applications: Increasing demand for timing ICs to meet synchronization and data integrity needs in connected devices.
• Automotive Electronics: Growing reliance on precise timing ICs for ADAS and autonomous vehicles, driving innovation in reliability and robustness.
• AI-Driven PC Market: Rising demand for AI-capable computers is spurring growth in the PC industry, with manufacturers prioritizing models equipped with AI-specific chips.

 

SUPPLIER-SPECIFIC DEVELOPMENTS:

RENESAS 

• Imposed a 90-day CW (cancellation window) for HPC products related to AI applications, primarily NCNR.

Texas Instruments

• Timing IC lead times: 8–12 weeks.
• Committed $5 billion annually (2023–2026) for a 300mm manufacturing expansion.
• Anticipated $6–8 billion in U.S. tax credits for manufacturing investments and signed a $1.6 billion CHIPS Act funding agreement to support three wafer fabs in Texas and Utah.

Analog Devices, Inc.

• Improved external fab allocations, reduced queue times, eliminated assembly constraints, and reduced test constraints.
• 80% of its portfolio now has lead times under 13 weeks.
• Plans a $1 billion upgrade to its Oregon plant.

NXP

• Monitoring market growth carefully, with lead times aligned with the full manufacturing cycle and order book visibility. 

STMICROELECTRONICS

• Plans to invest $4 billion to expand wafer production capacity.

 

MARKET DYNAMICS

• The automotive electronics segment is projected to record double-digit growth over the next three years as semiconductor content per vehicle increases, driven by the transition to electric and autonomous vehicles. Semiconductor content per vehicle is expected to grow from $712 in 2022 to $931 in 2025.
• The semiconductor industry, historically cyclical and recently challenged, is poised for a rebound in 2025, with generative AI acting as a significant catalyst for growth amidst geopolitical complexities.
• Resurgence in chip sales is anticipated, driven by innovative AI applications and increased demand across key market segments, despite potential headwinds from tariffs and geopolitical tensions.
• Investment decisions remain conservative due to potential policy changes from the new U.S. administration concerning energy, tariffs, and local manufacturing, which could bring substantial market shifts in 2025.

PRICE

• Timing IC pricing levels are expected to remain stable into early 2025, with no significant changes anticipated. Delivery times and prices have largely stabilized, except for automotive-grade products, which remain relatively high.
• Demand from Enterprise, Data Center, and Automotive sectors is steady, providing little incentive for suppliers to trade cost reductions for market share.
• Rapid growth in markets such as AI, big data, and EV is expected to drive the semiconductor industry forward in 2025.
• The "geopolitical battle" could make the China market less accessible for Western companies. Increased competition in China is beginning to weigh on market results.
• Multiple regions, including China, the United States, India, South Korea, Japan, the EU, and Southeast Asia, are heavily investing in semiconductor capabilities to strengthen control over the supply chain and enhance their positions in the global market.
• Suppliers are expanding into Southeast Asia and India, capitalizing on local manufacturing opportunities aligned with the "China+1" strategies of their customers.