The global semiconductor market is nearing the end of its inventory cycle. With the rise of AI-related applications, new energy vehicles, 5G, high-performance computing, and other emerging sectors, industry experts estimate that the global semiconductor industry could reach a valuation of $1 trillion by around 2030.

Recently, new signals have emerged from various regions globally, including China, South Korea, and Japan. Based on the changing data, the growth in different sectors reflects shifts in supply and demand, indicating a widespread recovery trend in the semiconductor industry.

South Korea: Memory Chip Exports Surge by 60.7% YoY

On October 14, local time, data from South Korea’s Ministry of Science and ICT showed that boosted by record semiconductor sales, South Korea’s ICT (Information and Communication Technology) exports in September 2024 increased by 24% year-on-year to 22.36 billion USD(about 160 billion RMB), marking the 11th consecutive month of growth and the second-highest monthly figure on record.

In the semiconductor sector, South Korea’s semiconductor exports amounted to 13.63 billion USD (about 96.5 billion RMB) in September 2024, a historical high, with a 36.3% year-on-year increase.

Notably, memory chip exports surged 60.7% year-on-year to 8.72 billion USD, a nearly 20% increase compared to the previous month. System semiconductor exports rose 5.2% year-on-year to 4.37 billion USD. The Ministry highlighted that the demand for high-bandwidth memory (HBM) and other high-value-added products has fueled significant growth in memory semiconductor exports.

South Korea is home to two of the world’s largest memory manufacturers: Samsung Electronics and SK Hynix. According to TrendForce, Samsung and SK Hynix occupy the top two spots globally in the DRAM and NAND Flash markets, followed by Micron. Hence, South Korea’s semiconductor sector remains a focal point for the industry.

Additionally, the memory market has experienced significant fluctuations this year, with concerns about future trends.

TrendForce data indicated that before the third quarter of 2024, demand for consumer products remained weak, with AI servers driving the primary demand for memory. However, as HBM gains more market share, it is crowding out the capacity for existing DRAM products, leading suppliers to maintain certain pricing levels for contracts. Although server OEMs have maintained momentum in placing orders, smartphone brands are still cautious.

TrendForce forecasts that the growth rate of memory prices will significantly slow in the fourth quarter. Conventional DRAM prices are expected to increase by 0% to 5%, but with HBM accounting for a larger proportion of sales, the overall DRAM price is estimated to rise by 8% to 13%, marking a noticeable slowdown compared to the previous quarter.

China: Integrated Circuit Exports Grow by 22%

According to recent statistics from Chinese customs, China’s total imports and exports reached 32.33 trillion RMB in the first three quarters of 2024, up by 5.3% year-on-year. Of this, exports grew by 6.2% to 18.62 trillion RMB, and imports increased by 4.1% to 13.71 trillion RMB.

In terms of exports, China’s exports of mechanical and electrical products reached 11.03 trillion RMB in the first three quarters, an increase of 8%, accounting for 59.3% of total exports. Notably, high-end equipment exports grew by 43.4%, while exports of integrated circuits, automobiles, and household appliances rose by 22%, 22.5%, and 15.5%, respectively.

In terms of imports, China’s integrated circuit and auto parts imports grew by 13.5% and 4.6%, respectively, in the first three quarters. Consumer goods imports exceeded 1.3 trillion RMB.

Regionally, China’s trade with over 160 countries and regions has grown, indicating steady diversification. Trade with Belt and Road Initiative countries reached 15.21 trillion RMB, growing by 6.3% and accounting for 47.1% of China’s total trade. Trade with RCEP members grew by 4.5%, with ASEAN trade increasing by 9.4%. Meanwhile, trade with the EU and the U.S. grew by 0.9% and 4.2%, respectively.

Japan: Semiconductor Equipment Exports to China Surge by 61.6%

Data released by Japan’s Ministry of Finance shows that in August 2024, Japan’s semiconductor equipment exports to China surged by 61.6%, reaching 179.9 billion yen (around $1.29 billion).

The total weight of equipment exported from Japan to China in August was 6,742 tons, a 41% increase compared to the previous month. Machinery accounted for 23.2% of Japan’s total exports to China, with semiconductor equipment making up 11.9%.

These figures underscore Japan’s critical role in the global semiconductor supply chain.

Additionally, ASML, the Dutch photolithography giant, previously reported that its exports to China grew by 21% quarter-on-quarter in Q2 2024, reaching 2.3 billion euros. Earlier data showed that Asia accounted for 84% of ASML’s 2023 revenue.

(Photo credit: istock)

At its previous earnings call in July, Samsung has announced the ambitious goal that its HBM sales would increase three to five times in 2H24. However, as it is still struggling to pass the verification of 12-Hi HBM3e products, the company’s prospects for returning to glory in the near term seems to be rather dim.

According to a report by Korean media outlet ZDNet, the main issue may lie in the core die of HBM, while the adoption of 1a DRAM is hindering Samsung’s recent efforts to supply HBM3e for NVIDIA.

Notably, an insider cited by the report notes that Samsung’s Vice Chairman Jun Young-hyun, the new Head of Device Solutions (DS) Division, is aware of these issues, so the decision for whether to redesign the 1a DRAM or not may be made soon.

According to the report, Samsung began the mass production of 1a (4th generation) DRAM, which has a linewidth of approximately 14 nm, as early as in the second half of 2021. It is worth noting that the company tries to enhance the product’s competitiveness by actively adopting advanced technologies such as EUV (extreme ultraviolet lithography).

ZDNet notes that Samsung applied five EUV layers to its 1a DRAM, which is significantly more than the one layer used by its major competitor, SK hynix.

However, though EUV is advantageous for reducing linewidths compared to the existing ArF (argon fluoride) lithography process, which is supposed to enhance efficiency and thus lowering manufacturing costs, EUV’s high technical difficulty has negatively affected the stability of the process, according to the report.

As a result, the cost of Samsung’s 1a DRAM has not decreased as initially anticipated, according to the report, with the yield issue occurring reportedly hinders Samsung’s HBM3e verification progress with NVIDIA.

Previous reports indicate that Samsung had conducted an on-site inspection with NVIDIA regarding the 8-layer HBM3e products at its Pyeongtaek campus. While the inspection itself concluded without any issues, concerns have reportedly been raised as the data processing speed (Gbps) of Samsung’s 8-layer HBM3e is about 10% lower compared to its rivals, according to sources cited by ZDNet.

Both SK hynix and Micron utilize 1b DRAM for their HBM3e core dies, the report notes.

Therefore, industry insiders cited by ZDNet reveal that Samsung has been internally discussing the possibility of redesigning some of the circuits in its 1a DRAM.

However, If Samsung does proceed with the redesign, it is expected to take at least six months for the product to be completed, the report suggests, which means the mass production could only begin by the second quarter of next year, and it will be challenging to supply the product in a timely manner.

Read more

• [News] Lagging behind SK hynix in HBM, Samsung Plans Significant Year-end Cuts to Chip Executives
• [News] Samsung Rumored to Cut HBM Production Target by 10% by End of 2025 amid HBM3e Delays

(Photo credit: Samsung)

According to TrendForce’s latest memory spot price trend report, regarding DRAM, trading volumes in the spot market continues to fall during China’s National Day Golden Week, while a rebound is unlikely before the year’s end. As for NAND flash, buyers’ reluctance towards procurement has further exacerbated the excessive provision within the market. Details are as follows:

DRAM Spot Price:

It is now China’s National Day Golden Week, so trading volumes in the spot market continues to fall. Furthermore, some module houses are keen to lower their inventory levels, thus pushing spot prices to go down further. The supply-demand dynamics of the spot market remains unchanged, and a rebound is unlikely before the year’s end. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has dropped by 0.26% from US$1.934 last week to US$1.929 this week.

NAND Flash Spot Price:

The spot market was seen with sluggishness in transactions as buyers had not raised their willingness in stocking amidst the National Day holiday of China. Several suppliers are obviously selling their products at lower unit prices this week as sales pressure continues to envelop the entire market, which however has yet to alleviate the overall status, where buyers’ reluctance towards procurement has only further exacerbated the excessive provision within the market. Spot prices of 512Gb TLC wafers have dropped by 0.58% this week, arriving at US$2.595.

According to TrendForce’s latest memory spot price trend report, regarding DRAM, with China’s upcoming National Day holiday and the lack of restocking momentum, the spot market is expected to become quieter in the next two weeks, causing the spot prices continue to slide. As for NAND flash, another wave of inventory reduction has surfaced among module houses. Combined with the relatively high inventory of YMTC, the spot market is surrounded by pressure of sales. Details are as follows:

DRAM Spot Price:

The previously mentioned influx of reball DDR4 and DDR5 chips (from decommissioned modules) is still unabated, and most major module houses are compelled to cut prices due to inventory pressure. With China’s upcoming National Day holiday and the lack of restocking momentum in the earlier period, the spot market is expected to become quieter in the next two weeks. Therefore, spot prices will continue to slide as well. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has fallen by 1.28% from US$ 1.959 last week to US$1.934 this week.

NAND Flash Spot Price:

Another wave of inventory reduction has surfaced among module houses amidst the supposedly peak season, followed by an ongoing decrement of prices, where most sellers equipped with ample stocks are looking to maintain their operations by exchanging their inventory with cash. All the while, YMTC has managed to drop in inventory by rushing to ship out its products to some major module houses at lower prices also due to the pressure aroused by excessive inventory. The spot market is thus lingering amidst pressure of sales. Spot prices of 512Gb TLC wafers have dropped by 3.69% this week, arriving at US$2.610.

Is the winter really coming for the memory sector? Despite an earlier report by Morgan Stanley warning of an AI bubble, U.S. memory giant Micron reveals a financial guidance that beats market expectations, projecting its fiscal first-quarter revenue to reach USD 8.7 billion, higher than an average analyst estimate of USD 8.32 billion, Bloomberg notes.

Meanwhile, Micron expects a significant increase in gross margin to around 39.5%, and an adjusted earnings of USD 1.74 per share, exceeding analysts’ estimates of USD 1.65, according to Reuters.

The growth momentum will mainly rely on the soaring demand for HBM, driven by AI. Earlier in June, Micron noted that its HBM chips have been fully booked for 2024 and 2025.

In terms of the outlook for the overall HBM market, Micron’s view evidently contradicts with that of Morgan Stanley, as it eyes the HBM total available market (TAM) to grow from approximately USD 4 billion in 2023 to over USD 25 billion in 2025.

And the company is making strides in its progress in HBM in the following year. According to its press release, Micron expects its HBM, high-capacity D5 and LP5 solutions, and data center SSD products to deliver multiple billions of dollars in revenue in fiscal 2025.

The U.S. memory giant also expects its HBM market share to commensurate with the company’s overall DRAM market share sometime in 2025.

According to TrendForce, Micron ranked third in DRAM revenue in Q2, 2024, with a market share of 19.6%, after Samsung’s 42.9% and SK hynix’s 34.5%, respectively.

Regarding the latest development on HBM, after its 8-hi HBM3E entered mass production in February, Micron confirms that it has started shipments of production-capable HBM3E 12-hi 36GB units to key industry partners to enable qualifications across the AI ecosystem, stating that its HBM3E 12-hi 36GB delivers 20% lower power consumption than its competitors’ HBM3E 8-hi 24GB solutions while providing 50% higher DRAM capacity.

The company expects to ramp its 12-hi HBM3E in early 2025 and increase the 12-hi mix in the overall shipments throughout the year.

According to a previous report by Tom’s Hardware, the new products are reportedly designed for cutting-edge processors used in AI and high-performance computing (HPC) workloads, including NVIDIA’s H200 and B100/B200 GPUs.

Micron delivered a strong finish to fiscal year 2024, with fiscal Q4 revenue at the high end of its guidance range and gross margins and earnings per share (EPS) above the high end of its guidance ranges.

In fiscal Q4, Micron’s revenue jumped 93% YoY to USD 7.75 billion. Its earnings per share (EPS) came in at USD 1.18, a notable turnaround from the loss of USD 1.07 per share in the same period of 2023. In addition, it achieved record-high revenues in NAND and in its storage business unit.

Micron’s fiscal 2024 revenue grew over 60%, with company gross margins expanding by over 30 percentage points and achieved revenue records in data center and in automotive, according to its press release.

Read more

• [News] Micron’s 12-Hi HBM3e Ready for Production, Targeting NVIDIA’s H200 and B100/ B200 GPUs
• [News] Morgan Stanley Predicts ‘DRAM Winter,’ But TrendForce Remains Less Pessimistic

(Photo credit: Micron)