Supply and demand of memory chips is likely to be more balanced next year due to production cuts, stronger capacity and a rebound in demand following a substantial price correction, Fitch Ratings Inc said yesterday.
Demand is expected to recover thanks to data expansion and upgrades to high-density servers and smartphones, as well as greater end-market diversification, especially into the automotive and industrial sectors, the ratings agency said.
However, in the short term memorychip manufacturers would continue to suffer from oversupply, the structural decline of the smartphone market and weaker-than-expected demand from servers, it said.
“We believe the NAND market will improve faster than DRAM due to demand recovery following deep price corrections since late 2018 and capital expenditure cuts by major companies such as SK Hynix Inc and Micron Technology Inc,” Fitch said in a report.
The industry would gradually absorb excess capacity this year, which would support a more beneficial pricing environment next year, it added.
Average selling prices of PC and server DRAM products fell by nearly 30 percent in the second quarter, Fitch said, citing market research firm TrendForce Corp (集邦科技).
The price decline in mobile DRAM was smaller — about 10 to 20 percent — thanks to a less aggressive price increase during the previous up-cycle, while NAND flash prices were largely flat last quarter, it said.
Samsung Electronics Co consolidated its position in both the DRAM and NAND markets with its market share last quarter growing to 46 percent and 35 percent respectively due to a recovery in server demand, Fitch said.
Samsung’s leading technological capability and continued improvements have led to strong shipment growth, it said.
Japan-South Korea trade tensions have had minimal effects on the memorychip industry, at least in the short term, as Japan’s tighter export controls do not impose a complete ban on the supply of key semiconductor materials, while South Korean manufacturers are also actively seeking alternative suppliers, Fitch said
Japan has approved shipments of key materials to South Korea three times since introducing the export curbs in early July, the ratings agency said.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,
‘SWARM TECH’: Joint venture FARobot is to develop autonomous mobile robots that would first be deployed in Hon Hai’s factories to optimize production efficiency Hon Hai Precision Industry Co (鴻海精密) and Adlink Technology Inc (凌華科技) have formed a robotic venture that aims to use “swarm technology” to create robots that can communicate with one another on the factory floor to optimize production efficiency. Hon Hai is Apple Inc’s leading iPhone assembler and the world’s largest contract electronics maker, while Adlink supplies industrial computers and Internet of Things solutions. Through a subsidiary, Hyield Venture Capital Co (鴻揚創投), Hon Hai holds a 51 percent stake in autonomous mobile robot (AMR) developer FARobot (法博智能移動), while Adlink owns the remaining 49 percent. Together, the two companies put up NT$200