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According to TrendForce's latest server-related report, the original goal of CXL (Compute Express Link) was to integrate performance between various xPUs and thereby optimize hardware costs required for AI and HPC, breaking through original hardware limitations. CXL support remains sourced to the CPU and, since the server CPUs that support CXL functionality such as Intel Sapphire Rapids and AMD Genoa only support the CXL 1.1 specification at this time, the product that this specification can realize first is CXL Memory Expander. Therefore, TrendForce believes, among various CXL-related products, CXL Memory Expander will become a precursor product and this product is also the most closely related to DRAM.
In this press release, TrendForce details 10 major trends that are expected to take place across various segments in the tech industry, as follows:
The U.S. Department of Commerce announced new semiconductor restrictions on October 7 in the United States. In addition to existing restrictions on the logic IC sector, this new update extends to the memory category. In addition to Chinese-funded enterprises, the extent of these restrictions stipulate foreign-owned production centers located in China will also need to apply for approval on a case-by-case basis in order to continue to obtain manufacturing-related equipment. In addition, the new restrictions increase the difficulty for China to obtain any chips that may be used for military purposes through imports.
According to a TrendForce investigations, memory pricing began to decline from 4Q21 due to weakening demand for certain consumer electronics. Coupled with the impact of rising inflation, the Russian-Ukrainian war, and pandemic policies, demand in peak season was weak, resulting in inventory pressure that has extended from the buyer side to manufacturers. In response to the aforementioned situation, Micron announced last week that it would cut production of DRAM and NAND Flash, becoming the first major memory manufacturer to officially reduce its capacity utilization plan. In terms of NAND Flash, the market situation is more severe than that of DRAM. As the average contract price of mainstream capacity wafers has fallen to their cash cost and is approaching the periphery of selling at a loss for various manufacturers, Kioxia also announced that it will reduce NAND Flash capacity utilization by 30% from October on the heels of Micron’s announcement.
According to TrendForce research, due to steady weakening of overall demand for consumer electronics, inventory pressure has increased among downstream distributors and brands. Although there are still sporadic shortages of specific components, the curtain has officially fallen on a two-year wave of shortages in general, and brands have gradually suspended stocking in response to changes in market conditions. However, stable demand for automotive and industrial equipment is key to supporting the ongoing growth of foundry output value. At the same time, since the creation of a marginal amount of new capacity in 2Q22 led to growth in wafer shipments and a price hike for certain wafers, this drove output value among top ten foundries to reach US$33.20 billion in 2Q22. Quarterly growth fell to 3.9% on a weakening consumer market.
