• The semiconductor industry experienced a mixed performance in Q2 2024, reflecting resilience and significant challenges. While there were pockets of strength driven by AI demand, the overall sentiment among major semiconductor vendors is one of caution as they navigate economic uncertainties, inventory corrections, and a rapidly evolving market landscape.
• Notably, several industry leaders, including Intel, Infineon, and Onsemi, have announced workforce cuts, signaling a need to streamline operations in response to softer demand. In parallel, companies like STMicroelectronics have revised their annual revenue forecasts downward, highlighting the broader uncertainty in key markets.
• With additional installed capacities coming online, suppliers face mounting pressure to fully secure new business opportunities to utilize these expanded capabilities and Fabs. This drive for growth could intensify competitive pressures, particularly in commodity and mature product segments where demand remains volatile. Additionally, geopolitical tensions have prompted semiconductor suppliers to initiate new CapEx investments across different geographical territories amid uncertain market and political conditions.
• Despite these challenges, there are signs of stabilization. Inventory levels in specific channels are improving, and the steep revenue declines seen earlier in the year have plateaued as the industry approaches seasonal peak periods. While this suggests that demand may have reached a level of normalization, a full recovery remains elusive.
• Given the cyclical nature of the semiconductor market, there are expectations that demand will eventually rebound. Over the past few months, some suppliers have proactively advised customers to maintain accurate forecasting & safety buffer stocks to avoid potential shortages when demand inevitably surges again. They caution against complacency in the current environment of short lead times, which could quickly reverse with a sudden influx of unplanned demand—a common occurrence during market recoveries.

SUPPLY

• The global semiconductor market is influenced by slow economic growth, particularly in the latter half of 2024, compounded by geopolitical tensions disrupting supply chains. 
• This uncertainty has affected the consumer market, prompting delays in EV expansion plans and reductions in Chinese EV exports due to tariffs. However, recovery signs in the PC and tablet sectors suggest potential growth. For 2025, significant market growth is anticipated, driven by AI, autonomous vehicles, IoT, and 5G technologies. 
• Additionally, many Asian Analog suppliers are relocating operations from China to Malaysia, Thailand, and the Philippines due to trade and tariff concerns, with companies closely monitoring the evolving situation regarding country-of-origin regulations. 
• Despite these shifts, most suppliers report low demand, operating at about 70% capacity, with ongoing assessments to track significant demand changes. Here are some of the highlights from the key suppliers:
   

Texas Instruments (TI)

• During its Q2 2024 earnings call, Texas Instruments (TI) reported revenue of $3.82 billion, with growth in all markets except Industrial and Automotive, which saw a quarter-over-quarter decline.
• TI is focused on competing with local Asian suppliers, leveraging advanced manufacturing, breakthrough technology, and a broad product portfolio. Lead times have mostly normalized, ranging from 10-12 weeks.
• TI and the U.S. Department of Commerce signed a preliminary agreement for up to $1.6 billion in CHIPS Act funding, supporting three wafer fabs in Texas and Utah.
• TI anticipates receiving $6-8 billion in tax credits for U.S. manufacturing investments, further strengthening their competitive advantage and expanding 300mm manufacturing operations in the U.S.
   

Monolithic Power Systems

• MPS lead times improved to 26 weeks for both standard & automotive products.
   

Onsemi (rebranded from ON Semiconductor)

• Onsemi reports a capacity utilization rate of around 65%.
• Automotive sector performance declined by 11% quarter-over-quarter, while the Industrial sector saw a 2% decline QoQ, with other segments also down 2%.
• Standard Analog products like AC/DC, DC/DC, Interface (RS232, RS485), VR, LDO, Driver, Mixed Signal/Amplifiers, and Comparators have improved lead times from 12 to 26 weeks.
• ONSEMI's CW/RW lead times are expected to improve to 60 days for Power Solutions Group (PSG) parts, excluding automotive.
   

Renesas

• Due to the recent easing in market conditions, the general lead time for Renesas’ Analog & Power products is now estimated to be between 12 to 24 weeks.
   

Diodes, Inc.

• Diodes anticipates a broad market slowdown, primarily driven by customer inventory adjustments and excess stock in distribution channels. The lead time is expected to be between 10 to 16 weeks.
   

STM

• STM's standard linear product lead times have improved to 12-24 weeks. Specific categories include AC/DC and DC/DC with 12-20 weeks, Interface (RS232, R485) with 12-15 weeks, and Mixed Signal Amplifiers and Comparators with 10-17 weeks. Cancellation and rescheduling windows are now quoted at four weeks.
• STM’s capital expenditure is primarily focused on expanding internal wafer fabs, particularly for Automotive MCUs, SiC, analog, discrete, MOSFET, and sensors.
• Most MCUs are still outsourced through TSMC’s 8-inch wafer fabs, while STM also operates internal fabs in Crolles, Rousset, Agrate, Catania (SiC), and Singapore (SiC).
   

ADI

• Wafer production at ADI is split between 53% external and 47% internal sources.
• Assembly processes are primarily external, with 89% outsourced and 11% managed internally.
• Final testing is largely internal, with 83% conducted in-house and 17% external.
• Lead times for 95% of ADI parts are under 13 weeks.
• ADI has launched the "Eshop" platform.

 

MARKET DYNAMICS

• China’s EV market is growing due to government policies, growing consumer interest, and a robust manufacturing ecosystem. The government has invested heavily in EV research and development, with incentives and mandates driving the market.
• However, tariffs have reduced Chinese EV exports. European tariffs on Chinese EVs have cut China’s auto industry growth by 20-30% to prevent a surge of subsidized EVs.
• The global political environment has reshaped supply chains, distinguishing between China-related and non-China-related supply chains.
• The semiconductor industry is set to grow rapidly due to rising demand for AI, autonomous driving, IoT, and 5G technologies.
• Additionally, the server market is expected to rise, driven by advancements in and the requirements of Artificial Intelligence.

 

PRICE

• The global Analog Semiconductor market faces challenges with declining demand and oversupply, leading to high inventory levels that will take most of 2024 to reduce.
• Suppliers are offering competitive prices to maintain market share, making it a buyer’s market for 2025 contracts.
• Prices for high-performance analog products will remain flat, tied to end-customer contracts.
• Expected price trends for 2025:
   
  • Renesas: Flat
  • Onsemi: Moderate decreases
  • ADI: Flat
  • STM: Moderate decreases
  • Diodes Incorporated: Moderate decreases
  • TI: Decreases to gain share from competitors
• Therefore, semiconductor prices in the first half of 2025 are expected to be moderate, with significant changes depending on market dynamics.

 

SUPPLY

• Most suppliers are facing headwinds causing a significant decrease in performance, but most appear hopeful for a modest recovery in the latter part of 2024.  
• Lead times have reduced for standard logic due to lower bookings and ample supply. 
• Most industries are still grappling with improved inventory overhand and cyclical pressures.  
• Most Suppliers' capacity utilization is hovering around 80% with a book-to-bill ratio of < 1.0. 
• Automotive and Industrial demand continued to grow in the second half of 2024, albeit at a slower rate compared to 2023. The Industrial sector was expected to bottom out in Q2 2024, with growth resuming in the latter half of the year.
• Texas Instruments has gone through significant optimization and technology transitions to newer nodes in the past 6-8 quarters to improve capacity. This effort enhances resiliency in the supply chain and mitigates against future supply chain constraints. The U.S. Department of Commerce has proposed up to $1.6 billion for Texas Instruments in direct funding through the CHIPS and Science Act to support three 300mm semiconductor wafer fabs under construction in Texas and Utah.
• Texas Instruments has experienced significant LT improvement except for automotive devices. Texas Instruments’ lead time on Logic is quoted at 6 weeks in general. The company is chasing a broader share with better prices and ample supply.
• Nexperia is quoting 6-8 weeks in general, chasing for more orders on Pico Gates Logic and improved visibility in semiconductor growth as the extended inventory correction concludes in major market segments like PCs and smartphones.
• Onsemi transferred the standard logic wafer production to Vanguard Semiconductor (Taiwan) and consolidated backend manufacturing sites for similar packages for 90% of the logic portfolio (except for the metal gates). This has resulted in better supply and lead time improvements. 

 

MARKET DYNAMICS

• TSMC expects inventory to return to a healthier level. Still, the weak macroeconomic and geopolitical uncertainties persist, impacting consumer sentiment and end-market demands.
• UMC and Vanguard International Semiconductor (VIS) experienced a significant decrease in performance in 2023 but are expected to see a modest recovery in 2024. 
• Even though the road ahead for the Chinese chip industry is full of challenges, it also comes with several growth opportunities. The country has increased its semiconductor manufacturing capacity by 13% year-on-year to reach 8.6 million wafers per month in 2024.
• Recently, China launched the third phase of its semiconductor grants, a $47.5 billion fund to boost the development of its domestic chip industry.
• Looking ahead to 2025, WSTS forecasts a 12.5% growth in the global semiconductor market, reaching an estimated valuation of $687 billion. 

 

PRICE

• Suppliers want to secure more orders with competitive prices to win and capture more share amid sluggish demand. 
• Texas Instruments and Nexperia are pricing aggressively to win more share of the declining demand. Lead times continue to be adequately aligned with the entire manufacturing cycle time and order book visibility.
• Onsemi has started to offer competitive pricing to gather more bookings and believes that their LTSAs (Long Term Support Agreements) are holding firm for supply/demand on Logic. Onsemi shifted wafer production from Tower to Vanguard Taiwan for 90% of the Logic.
• Logic’s Asian Suppliers (SG Micro, Runic, and I-CORE) are actively seeking market share by offering competitive solutions.

 

SUPPLY

• Supply levels for diodes, transistors, and MOSFETs are steadily returning to normal.
• Inventory across the channel has primarily normalized, indicating a stabilizing market.
• Currently, over 80% of lead times have improved to fall below 26 weeks, reflecting a healthier supply chain.
• The emergence of last-minute demand in multiple market segments is a promising sign that excess inventory is being absorbed. However, it also raises concerns about the possibility of end customers being overly conservative in their planning.
• The abundance of manufacturing capacity ensures that short-cycle demand peaks are being handled reasonably well, minimizing concerns about last-minute demand upsides.
• Average lead time based on technology:

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	36-38 weeks
Automotive MOSFET	22-26 weeks

• Vishay supply has normalized, and the general lead time for diodes has fallen below 16 weeks. As for MOSFETs, the lead times have been reduced to 26 weeks, including automotive-grade MOSFETs, with Vishay’s expansion of external front-end wafer fab capacity. Tower has increased capacity by transitioning from 6-inch wafers to larger 8-inch or 12-inch wafers to support Vishay’s new capacity demands better.
• Vishay also adopted a dual-site strategy for China+1 solutions, with backend factories located in Taiwan (Kaohsiung), Thailand, Malaysia, etc.
• Vishay’s expansion plans for the front end (diode)
   
  • Schottky (8-inch wafer) 
  • Fred (ultra fast) (6/8-inch wafer) 
  • PAR TVS (Taiwan) 
  • Uni & Bi TVS (Subcon, general SMA, SMB, and SMC)
  • SSD (Germany)
  • DFN (Germany) – Small Signal 
• STM continues to see a weakened backlog quarter over quarter, with power and discrete products down by more than 5%. A significant lead time improvement is observed; Diode and MOSFET products saw a more than 10% increase in MPNs, with lead times now under 26 weeks. 
• Nexperia - With the completion of the Linggang fab phase 1, Nexperia is now concentrating on expanding its backend operations. In response to increasing demand from various customers for “China+1” manufacturing, Nexperia will prioritize expanding its facilities in Penang, Malaysia, and Cabuyao, Philippines.
• New joint venture backend factory in Malaysia is estimated to be in mass production by October 2024, focusing on Diodes Inc’s  SOT and SOD packages, followed by SMA/B/C in phase 2 starting within the first half of 2025.

 

MARKET DYNAMICS

• Onsemi has announced the reduction of 1,000 jobs due to weak market demand.
• Infineon plans to lay off 1,400 jobs globally and relocate an additional 1,400 roles to countries with lower labor costs as part of a cost-saving program driven by weak economic momentum.
• Despite ongoing market uncertainty, ADI, a maker of analog power devices, reported mixed results in its latest quarterly earnings. While consumer demand showed signs of recovery with a 3% revenue increase in the third quarter, the industrial market segment remained weak, falling slightly short of its target revenue.
• The overall market remains uncertain, influenced by the potential escalation of tensions in the Middle East and geopolitical uncertainties surrounding the upcoming U.S. elections in November 2024.

 

PRICE

• Pricing is beginning to stabilize, with the pace of reductions slowing down.

 

SUPPLY

• Supply for all optoelectronic-related products remains healthy. However, market inventory has been depleted, making ad hoc demand and short lead-time support uncertain.
• Some product lines are experiencing extended lead times as manufacturers hesitate to buffer raw materials for non-common parts. Customers are encouraged to provide long-term visibility and sufficient lead time for solid-state relay (SSR) products from Japanese manufacturers, a situation expected to persist through the rest of this year and into 2025.
• Major global brands have secured their 2024 backlog, but their business levels for 2025 remain unclear. Many do not have sufficient orders to utilize total capacity, leading to limited investment and recent increases in lead times over the last few weeks.
• Demand in the Medical and Industrial segments remains stable, while demand in the Automotive segment has softened.  
• Increased backlogs have resulted from extended lead times, which now range from 15-36 weeks for global brands. In contrast, Asian brands are now maintaining shorter lead times of 8-16 weeks.

 

MARKET DYNAMICS

• The overall market demand is flat. Manufacturers announced lead-time extensions and company restructuring to cope with the challenging market environment expected in 2025.  Optoelectronics is using older wafer technology nodes, and the supply situation is comparatively stable as it does not require much capital investment.     
• Business is expected to be slow for the remainder of 2024, especially in China’s consumer segment. Asian suppliers will struggle to sustain their current business and production capacity. If the economy remains weak, we could potentially see another round of consolidation or bankruptcy.   
• The market is hopeful that AI products will benefit the Optoelectronic commodity as data storage and networking requirements will generate high demand.  New investment is pending until the suppliers see a more robust market outlook.

 

PRICE

• Pricing for optoelectronic products is expected to remain stable throughout 2024 as suppliers closely manage prices amid softening overall demand and rising raw material costs.
• Some suppliers proactively offer discounts to secure new business, sockets, or shares.
• Growth in the Automotive and Healthcare sectors has slowed, with customers maintaining conservative forecasts. Conversely, the Home Appliance and Consumer sectors are performing better, particularly in the American and European regions.

 

SUPPLY

• The DRAM market, particularly DDR4 and DDR5 memory types, faces several challenges contributing to current supply constraints. 
• Both DDR4 and DDR5 are experiencing issues with manufacturing capacity, particularly at the leading edge of technology, such as High Bandwidth Memory (HBM), which is increasingly used in AI data centers. This results in inefficient utilization of overall capacities. New semiconductor plants are coming online, although the ramp-up is slower than anticipated, further restricting output.
• Shortages of critical components like power management ICs (PMICs), crucial for server-grade DDR5 memory modules, have significantly impacted supply. Delays in the delivery of DDR5 chips by significant manufacturers are exacerbating the situation, as there aren't enough chips available for module makers, which slows down the production and supply of newer DRAM modules.
• Geopolitical and Market Influences: Geopolitical tensions and strategic competitions, especially involving major semiconductor-producing countries, are adding complexity to DRAM supply chains. These factors influence the availability and pricing of memory chips, contributing to the current constraints in the market.
• Overall, while the transition from DDR4 to DDR5 brings performance improvements, it also faces several supply chain and technological hurdles that need to be navigated carefully by both manufacturers and consumers.
• Supply Stability Highlights:
   
  • DDR4/DDR5: Some Constraints
  • HBM: Some Constraints
  • DDR3: There are few constraints but some available production options.
  • Legacy (SDRAM, DDR1, DDR2):  Stable Look to 2^nd tier for support.

 

MARKET DYNAMICS

• China’s CAC has excluded using Micron Products for Critical Information Infrastructure in China. Micron’s position is Business as usual.  This has become a “Nothing Burger”, but it still exists.
• Analysts predict market stabilization through 2024, and the first half of 2025 with limited bit growth, but AI (High-Bandwidth Memory) and 5G are gradually rising. Uncertainty remains in the market, and factories are now reporting lower lead times and product availability.  
• Demand has been lower than production rates in 2024 (except for HBM). Lead times are currently normalizing. Expect the same through the first half of 2025.
• Major suppliers are downgrading growth predictions for the first half of 2025.  
• Suppliers are reporting capacity in DDR3.  Look for support from most suppliers as deals can be made.
• DDR4/DDR5 pricing will increase into 2025 as suppliers continue to move to profitability. (As much as 40%)
• DDR5 (vs. DDR4) bit crossover is happening now.  Manufacturers prioritize the most capacity increases for HBM production for AI applications, potentially limiting the server DDR4/DDR5 supply.
• PC and Server demand has normalized, and handset demand has increased.
• Look for and take advantage of Short-term SPOT-Market lower pricing and over-supply opportunities. There is inventory in the channel, and deals are being made.

 

PRICE

• Prices for both DDR4 and DDR5 are projected to increase through 2025. This trend is likely influenced by technological advancements, increased demand for higher performance in computing and AI applications, and the gradual transition from DDR4 to DDR5, which introduces more advanced features and better efficiency.
• HBM (High Bandwidth Memory) is expected to see price increases through 2025. The rising costs are attributed to its critical role in AI data centers and high-performance computing, where speed and bandwidth are paramount. As these sectors expand, the demand for HBM intensifies, pushing prices upward. Additionally, delays in deliveries of HBM chips by major manufacturers, such as SK Hynix—which has reported its HBM production as fully booked for the upcoming years—exacerbate the situation. This limitation on chip availability restricts the production and supply of new HBM-equipped DRAM modules, further contributing to price increases.
• In contrast, DDR3 is experiencing some price decreases. As a technology that is being phased out in favor of newer memory standards, DDR3 sees declining demand, which typically leads to lower prices.
• Legacy DRAM types are also undergoing price decreases. As newer memory technologies become standard, the shift away from older legacy systems reduces their market value, leading to lower prices.
• Price Stability Highlights:
   
  • DDR4/DDR5: Expect increases through 2025.
  • HBM:  Expect increases through 2025.
  • DDR3: Some decreases
  • Legacy:  Some decreases

SUPPLY

• The supply of Asynchronous and Synchronous SRAM, including variations like Low Power, Fast SRAM, Slow SRAM, and Quad Data Rate, remains stable. This stability is critical for maintaining uninterrupted operations across various applications that rely on SRAM for fast, reliable data storage.
• SRAM is a mature technology, which typically leads to less volatility in its supply. The lack of significant innovations in SRAM technology means that supply chains are well-established and less susceptible to sudden disruptions compared to newer 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 market.
• Balanced market conditions are expected to continue throughout the second half of 2024 and into the first half of 2025.  
• Lead times are expected to remain extended due to increased orders placed on suppliers.
• Consider utilizing second-tier suppliers to alleviate constraints from first-tier suppliers.

 

PRICE

• The price for SRAM is expected to remain stable despite the dynamic semiconductor market. This stability is reinforced by a balanced demand-supply equation, where supply keeps pace with demand, avoiding major price fluctuations.
• The lack of significant regulatory changes or disruptions in the SRAM market contributes to price stability. This environment allows manufacturers to plan with greater certainty and maintain stable pricing strategies.
• Price Stability Highlights:
   
  • Asynchronous: Stable
  • Synchronous: Stable

This applies to NAND Flash derivative products such as Solid-State Drives, eMMC, Memory Cards and USB Drives

SUPPLY

• The NAND Flash market is growing due to its critical role in data storage across various sectors, such as consumer electronics and cloud computing. However, this demand is putting pressure on the supply chain, compounded by production challenges and slower-than-expected ramp-ups in new manufacturing facilities.
• There are also issues with shortages of essential components required for NAND Flash production. These shortages affect NAND Flash products’ overall output and availability in the market.
• 3D NAND manufacturing is significantly more complex than Planar NAND, involving multiple layers of memory cells stacked vertically. This complexity can lead to yield issues and production delays.
• Supply Stability Highlights:
   
  • Planar NAND: Some Constraints
  • 3D NAND Flash: Some Constraints

 

MARKET DYNAMICS

• Price increases are expected for Nand Flash products, including eMMC and SSDs, as suppliers work towards regaining profitability. Effective forecasting is recommended to navigate these conditions, and it could be beneficial to explore opportunities in oversupply and spot market pricing where suitable.
• Major suppliers are likely to raise prices on high-density Flash and SSDs, so consider evaluating alternatives or seeking assistance from Global Commodity Managers. Second-tier suppliers might offer viable solutions.
• Sectors such as hyperscalers, AI, mobile, and PC are anticipated to increase purchases in response to market recovery.
• Short-term demand looks to increase going into 2025, and pricing reflects this. Pricing will stay higher for the first half of 2025. Give suppliers as much forecast and hard orders as possible to ensure supply.

 

PRICE

• The growing demand from data centers and consumer electronics for higher capacity storage solutions is pushing the prices of 3D NAND flash memory upwards. As these sectors expand their data storage capabilities, the need for advanced 3D NAND technology intensifies, influencing market prices.
• Although production of Planar NAND is decreasing, its prices are expected to rise due to sustained demand from niche markets that still rely on this older technology. This reduced production aligns with a strategic shift towards more advanced 3D NAND but keeps prices for Planar NAND elevated due to its lower supply.
• Until manufacturers reach economies of scale, the cost of 3D NAND is likely to remain high.
• Price Stability Highlights:
   
  • Planar NAND: Increasing
  • 3D NAND Flash: Increasing

 

SUPPLY

• The NOR Flash market is experiencing increased demand across various sectors, notably in automotive and industrial applications. This growing demand is further amplified by NOR Flash's durability and fast read capabilities, making it essential for real-time applications.
• However, the industry faces challenges due to a slower transition in the technology used for NOR Flash production. This slower pace in adopting newer manufacturing technologies hinders the supply chain's ability to keep up with the rapidly increasing demand from new technological applications.
• Supply Stability Highlights:
   
  • Low-Mid Density NOR:  Some Constraints
  • High Density NOR: Some Constraints

 

MARKET DYNAMICS

• Alert!! China’s CAC has excluded using Micron Products for Critical Information Infrastructure in China. Micron’s position is Business as Usual. 
• NOR Flash memory is anticipated to remain tight into 2025.
   
• The rising popularity of true wireless products is expected to continue driving demand for NOR Flash memory into 2025, with new 5G product launches and AI applications potentially tightening supply. It's important to stay informed about market developments.
• NOR Flash Foundry partners are experiencing increased demand from non-memory products that offer higher margins, which could restrict capacity expansion plans for NOR Flash.
• Consider engaging second-tier suppliers for support; Global Commodity Managers (GCM) can assist in identifying alternative solutions.

 

PRICE

• Despite the supply constraints in the NOR Flash market, the alignment between current market demand and available supply is helping to maintain stable prices. 
• Manufacturers and suppliers are anticipated to continue managing their inventories strategically. This proactive approach is crucial, especially in scenarios where supply might tighten, to ensure a stable pricing environment is maintained.
• Price Stability Highlights:
   
  • Low-Mid Density NOR: Flat
  • High Density NOR: Flat

 

SUPPLY

• EEPROM technology is well-established with mature manufacturing processes, which contributes to a stable supply chain. This stability is enhanced by EEPROM serving specific niche markets with steady demand patterns rather than experiencing the volatile shifts seen with newer memory technologies.
• Its stable demand, combined with established production techniques, ensures that supply levels are consistent and unlikely to face significant disruptions. 
• Supply Stability: Stable

 

MARKET DYNAMICS

• EEPROM is a matured memory technology with a stable demand and supply base that consistently supports the market.
• Market conditions for EEPROM are expected to remain balanced into 2025.
• It is advisable to monitor lead times closely and provide accurate forecasts to suppliers.
• Major suppliers are normalizing lead times and maintaining capacity but are also considering engaging second-tier suppliers for additional support.

 

PRICE

• The pricing of EEPROM remains stable due to the absence of sudden spikes in demand or drastic shifts in supply conditions.
• The mature nature of EEPROM technology means it is less susceptible to the rapid changes and innovations that often disrupt pricing structures in newer technologies. 
• Price Stability: Stable

SUPPLY

• There is increasing demand for high-performance storage solutions, particularly in data centers and enterprise settings. This surge is driven by the need for faster data access and higher reliability in processing large volumes of information, contributing to supply constraints.
• As SSD technology continues to advance, particularly with the introduction of newer interfaces and enhanced data transfer rates, manufacturers are challenged to scale up production efficiently. The rapid pace of innovation can lead to production bottlenecks as facilities struggle to keep up with the latest specifications and performance requirements.
• Supply Stability: Constrained

 

MARKET DYNAMIC

• Alert!! China’s CAC has excluded using Micron Products for Critical Information Infrastructure in China. Micron’s position is Business as usual.  Follow GCM updates.
• SSD growth in Automotive applications is expected to outperform previous years in 2025.
• Recent production and CapEx reductions have significantly impacted supply, causing prices to continue rising.
• Very high-capacity (30TB-60TB) QLC server SSDs, particularly in AI applications, are experiencing sold-out conditions for the next two quarters.
• Growth in Half-Height, Half-Length (HHHL) SSDs is also expected to continue, offering enhanced performance into 2025.
• PCle SSDs offer Higher performance and reduced latency.
• The demand for SSDs in both client and enterprise sectors is rapidly increasing due to the growing number of cloud platforms.
• Although SSD costs remain higher than HDD, the costs for 3D NAND Flash are expected to change dramatically into 2025.
• It's advisable to take advantage of favorable pricing opportunities when possible.

 

PRICE

• Major manufacturers have adjusted their production levels, which has already led to price increases. These adjustments are in response to the need to balance market supply and achieve profitability.
• Fluctuations in the cost of NAND flash, a primary component, are driving up SSD prices.
• Price Stability: Increasing into the first half of 2025

 

SUPPLY

• Supply is stable as the investment in wafer capacity over the last couple of years is starting to take effect. The market has been picking up in the second half of 2024. However, the outlook for 2025 is unclear as the market lacks longer-term orders and visibility.   
• Suppliers are focusing on developing new products with advanced technologies for automotive, IoT, and automation applications. Global brands are reviewing their product portfolios as they look to support the growing markets and new applications induced by AI applications.  
• Some global brands like OnSemi and NXP have announced lead time extensions, although supply remains stable due to underutilized factory output. Continuous enhancements in EV features are driving ongoing product launches and technological upgrades within the sensor commodity sector. Ongoing product portfolio reviews aim to phase out legacy products. It's important to stay alert to End of Life (EOL) notices from suppliers to manage inventory and planning effectively.

 

MARKET DYNAMICS

• Sensors are essential across various sectors such as automotive, consumer electronics, healthcare, industrial automation, and aerospace, contributing to the creation of more affordable, smaller, smarter, and easier-to-use smart devices. These devices leverage advanced sensor technology that enhances precision, reduces power consumption, and improves repeatability and digital output, fostering innovation and attracting new market entrants.
• The demand surge and sensors’ pivotal role in diverse applications are expected to drive double-digit market growth and encourage new suppliers to enter the market.
• Key drivers of innovation in sensors include automotive electrification and the growing needs in industrial and healthcare applications.
• The expanding artificial intelligence (AI) market also significantly demands various types of sensors for environment monitoring, temperature, humidity, navigation, and positioning feedback.

 

PRICE

• Prices have slightly decreased due to market slowdown and intense competition, with suppliers adjusting pricing strategies to secure market share and new project engagements. However, these cost reductions are being offset by increases in material and labor costs.
• Suppliers remain cautious as the market trend for 2025 is still uncertain.
• Inventory levels within the supply chain are healthy.
• Costs for raw materials, labor, freight, and foundry services are on the rise, placing financial pressure on suppliers to maintain their business operations and gross margins. Prices may increase by the end of this year or early 2025.

SUPPLY

• As we approach the end of 2024, most Suppliers' capacity utilization is < 80%, and book to bill ratio is < 1.0. A market correction that impacts revenue and unit-to-be-shipped basis is well underway and will continue through the end of 2024.  
• Lead times continue to reduce gradually, 70% on 12-25 weeks, 25% on 26-35 weeks, and 5% on 36-52 weeks. Most of the Timing IC Suppliers have improved cancellation and rescheduling windows.
• Microchip: New orders will no longer be flagged as “PSP” and will be managed under standard terms and conditions, though existing orders under PSP conditions remain unchanged.
   

Texas Instruments

• Current lead times for orders are 8-12 weeks.
• Committed to a 300mm manufacturing expansion. 

Analog Devices, Inc.

• The company has increased allocations at external fabs, reduced queue times, and primarily resolved assembly and test constraints. Material shortages for lead frames and laminates have been resolved. Lead times for 80% of the portfolio are now under 13 weeks. Additionally, there's a planned $1B upgrade for their Oregon plant.

NXP

• Remains bullish on automotive parts and is exploring further investments in the Indian semiconductor market. There are no capacity shortages, and market growth is being carefully monitored. Unplanned demand within current lead times may incur expedited fees. A long-horizon order book is advised to optimize the product mix. 

STMICROELECTRONICS

• Recently revised CW/RW lead times to 4 weeks.
• Planning a $4B investment to increase wafer production capacity.
• Projected growth in the Automotive and Industrial sectors at 10.9% and 7.1%, respectively.

MARKET DYNAMICS

• Demand trends in the automotive and core industrial sectors remain strong, though supply constraints have limited growth. Timing ICs, essential for engine management, safety, and infotainment systems in vehicles, continue to drive demand.
• The automotive electronics segment is expected to see double-digit growth over the next three years. The average semiconductor content per vehicle is projected to increase from $712 in 2022 to $931 in 2025, influenced by the shift towards electric and autonomous vehicles.
• The semiconductor industry is poised to rebound in 2025, with generative AI expected to catalyze growth despite geopolitical challenges. The sector anticipates a resurgence in chip sales, spurred by AI applications and growing demand across key segments.
• The rise of IoT and connected technologies is also boosting the semiconductor industry, particularly for high-precision timing solutions, indicating a robust market for Timing ICs in the future.

 

PRICE

• Most timing IC suppliers expect no price change through 2024. Pricing levels are still holding firm, and automotive-grade semiconductors are still relatively high.  
• The demand from the Enterprise and Data Center sectors as well as Automotive is holding up so there is little incentive to reduce. Suppliers are not aggressively looking to trade cost reduction for more shares. 
• The geopolitical situation may have unforeseen consequences, possibly making the China market less accessible for Western companies.  There’s enough data to claim a more intense competitive landscape in China is starting to weigh on results. US government export controls on US companies selling to China have forced some semiconductor manufacturers in China to move their focus to analog chips, which could lead to a price war with Global companies.