Despite the COVID-19 pandemic’s negative impact on the global economy, several emergent trends, such as WFH, distance education, rising 5G smartphone penetration, and strong component demand from telecom infrastructure build-out, have resulted in a bullish semiconductor market against economic headwinds, according to TrendForce’s latest investigations. Global foundry revenue is projected to undergo a 23.8% increase YoY in 2020, the highest percentage in 10 years.
Demand for end-devices saw a continued growth due to the rise of the stay-at-home economy brought about by the COVID-19 pandemic in 2Q20, according to TrendForce’s latest investigations. As U.S. sanctions against shipping chips manufactured with U.S. equipment and technologies to Huawei took effect on September 15, various OSAT companies rushed to make deliveries prior to the September 15 deadline. Driven by this wave of urgent orders, the top 10 largest OSAT companies’ quarterly revenue reached US$6.759 billion in 3Q20, a 12.9% increase YoY.
The COVID-19 pandemic has accelerated paradigm shifts in work, education, and living for people around the world since the early part of 2020, according to TrendForce’s latest investigations. The proliferation of smart handheld devices has led to strong and consistent growth in the demand for cloud storage and computing. Furthermore, the market penetration of cloud services has risen sharply as enterprises undertake digital transformation projects. On the side of general consumers, there have been changes in online spending habits and advances in business models for e-commerce. At the same time, a new generation of social media platforms has risen. Thanks to these developments, cloud service providers (CSPs) are able to collect huge amounts of consumer data for developing a more diverse range of businesses. As such, TrendForce’s latest survey of the global server market indicates that hyperscale servers already account for almost 40% of the total demand in 4Q20, and the number of hyperscale data centers is now three times of that in the 2012-2014 period.
As the current mainstream solution for PC DRAM and server DRAM, both of which share the same roots in IC design, DDR4 reached a penetration rate of more than 90% in each of the above two categories in 3Q20, according to TrendForce’s latest investigations. As well, JEDEC finalized the definition of next-generation DDR5 memory in September 2019. Significant increases in the penetration rate of DDR5 PC DRAM is not expected to take place until 2022 at the earliest.
On October 27, AMD announced that it had reached an agreement with leading FPGA manufacturer Xilinx to acquire the latter for US$35 billion. Should the acquisition proceed as planned, AMD will greatly increase its influence across industries such as 5G, data center, ADAS (advanced driver-assistance systems), and industrial automation, in turn overtaking MediaTek in revenue and becoming the fourth largest IC design company behind third-place Nvidia, according to TrendForce’s latest investigations. Furthermore, as AMD and Xilinx are both major clients of TSMC, AMD will command increased leverage when negotiating for TSMC’s foundry services following the Xilinx acquisition.