TrendForce’s First Seminar in Japan, Spotlights TSMC, Rapidus and Japanese Semiconductor Revitalization

2023-12-15 Semiconductors editor

As the Japanese government injects substantial funds to revitalize its semiconductor industry, the dynamics of the Japanese semiconductor industry have been a global focus. TrendForce, during this year’s SEMICON Japan, organized its first overseas industry-focused information seminar, delving into the global semiconductor, optoelectronics, and electric vehicle industries, with a particular focus on the dynamics and strategies of the Japanese market and companies. The event attracted over a hundred participants from Japanese technology industry.

The seminar, opened by TrendForce CEO Kevin Lin, under the theme of “the era of challenges,” served as a commentary on the future development of the technology industry in the coming years. Lin pointed out that global technological industries, influenced by geopolitical factors, are experiencing a trend of supply chain restructuring. He also highlighted China’s expansion in the semiconductor, electric vehicle, and downstream supply chains, reshaping the global supply chain landscape—an aspect requiring global attention.

During the seminar, TrendForce’s Senior Research Vice President, Ken Kuo, presented an analysis of the global memory and AI server market. He noted that after a year and a half of adjustments, prices in the DRAM and NAND markets started to rise across the board in the fourth quarter, driven primarily by robust growth in AI. This trend is expected to continue into the next year.

Beyond AI servers, the introduction of technologies such as Microsoft’s Copilot, as well as AI PCs and AI smartphones, is poised to be a growth driver next year. In terms of AI chip shipments, NVIDIA is projected to maintain its dominance, with an estimated 1.5 million units shipped this year and an anticipated 100% growth next year.

The semiconductor foundry market is expected to recover in 2024.

The recovery of the semiconductor market in 2024 was a major focus for participants. TrendForce’s analyst Joanne Chiao mentioned that as supply chain inventory pressures gradually ease, the semiconductor foundry industry is expected to experience a recovery in 2024, driven by TSMC’s advanced processes and inventory replenishment momentum, with a projected growth of 7%.

In light of geopolitics, , semiconductor foundry supply chains are undergoing restructuring. In 2023, Taiwan is expected to account for approximately 46% of global semiconductor foundry capacity, followed by China at 26%, South Korea at 12%, the United States at 6%, and Japan at 2%. With the drive from subsidy policies in China and the United States to increase local production capacity, by 2027, Taiwan and South Korea’s production capacity shares are expected to converge to 41% and 10%, respectively.

Meanwhile, Japan is actively implementing subsidy policies to support local company Rapidus and attract Taiwan’s TSMC and PSMC to establish facilities, aiming to secure a place in the semiconductor foundry market.

The introduction of Apple Watch with Micro LED is expected in 2026, with estimated display costs 2.5-3 times higher than OLED.

TrendForce’s Senior Research Vice President, Eric Chiou, analyzed Apple’s progress in adopting new display technologies during the display technology session. He mentioned that the next-generation Apple Watch panel would use Micro LED as the display technology, with a size larger than the current Apple Watch Ultra at 2.12 inches.

The product will have two key suppliers: German LED giant ams OSRAM, which will exclusively supply Micro LED chips smaller than 10x10um, and South Korean panel manufacturer LG Display, responsible for the chip mass transfer engineering in addition to providing LTPO glass backplates.

Chiou pointed out that the adoption of small-sized chips inherently helps compress costs. Considering Apple’s strong bargaining power in the supply chain, he estimated that when the product is launched in 2026, the cost of the Micro LED display panel could be controlled below $120, equivalent to 2.5 to 3 times the current price of OLED panels—a reasonable range for a new technology.

Moreover, with Apple’s outstanding ability to integrate new technologies and specifications, there is an expectation of achieving million-unit-level shipments in the first year of launch, injecting abundant vitality into the demand for Micro LED chips and the overall industry’s development.

China’s EV expansion brings impact to the global automotive industry.

In 2023, China became the world’s primary exporter of automobiles, prompting the global automotive industry to recognize that competition with Chinese automakers will extend from the domestic market to the global market. TrendForce analyst Caroline Chen highlighted in her speech that the most significant threat to international automakers is China’s advantage in EV( including BEV, PHV, FCV).

She emphasized that due to China’s early development of EVs, it has established a complete supply chain, particularly in the proactive development of power battery production capacity and upstream materials. EVs account for over a quarter of China’s passenger car exports.

On the other hands, with a nearly 60% market share in the Southeast Asian market, Chinese automakers gradually threaten Japanese automakers’ long-term dominance in the Southeast Asian automotive market.

She believes that as Chinese automakers expand into the international market, Japanese automakers should not only accelerate the development of new energy vehicles but also leverage their long-accumulated brand value and well-established maintenance systems as core competitive advantages. Additionally, maintaining leadership positions in semiconductor and chemical materials is a strategy for sustained investment to consolidate their influence in the automotive industry.