TrendForce reports that global economic headwinds have had a significant impact on the MLCC industry, with shipments from January to April of this year totaling 1359 trillion units This represents a 34% decrease compared to the same period in 2021, highlighting the greater impact of global economic headwinds on the MLCC industry compared to the pandemic An unstable demand for orders from brands and ODMs since 2Q23, coupled with continuous price pressure, has forced MLCC suppliers to control capacity in order to maintain a balance among supply, inventory, and pricing In May, the average capacity utilization rate of Japanese suppliers was 78%, while Chinese, Taiwanese, and South Korean suppliers stood around 60–63% Reduced production may become a short-term norm as consumer demand continues to remain weak
New smartphone releases from Huawei, Honor, and OPPO in the second quarter have failed to effectively boost China’s domestic market consumption, leading brands to adopt a more conservative approach to promoting new products In the server segment, current estimates project a 285% YoY decline in total shipments for the year, with potential further downward adjustments This will affect material depletion for ODMs, including Inventec, Quanta, and Wistron Average inventory levels remained high at 4–8 weeks as of the end of April
ODMs began mass production and shipments of Intel’s 13th generation Raptor Lake CPU platform for both consumer and business models in March—coinciding with the three-year replacement cycle since the pandemic However, Quanta and Compal, the top two ODMs, reported shipments of only 33 million and 24 million units in April, respectively Comparatively, during the same period last year when China was under lockdown and supply chains were disrupted, shipment volumes still managed to reach 32 million and 22 million units, respectively This underlines the current sluggish demand in the end-user market, and combined with economic uncertainties, has led OEMs to adopt a more conservative outlook for new product launches
TrendForce further states that previously, the market generally believed inventory pressure was the main factor impacting the MLCC industry However, for smartphones, PCs, and laptops, which account for 30% of MLCC demand, ODMs began adjusting their inventory levels as early as the third quarter of last year By 2Q23, they had gradually returned to normal, with occasional urgent and short orders replenishing stock Nevertheless, overall demand is still weak due to the sluggish consumer market, resulting in low and unsustainable demand for MLCCs from buyers In May, the MLCC supplier BB ratio was 085, only a slight increase of 001 compared to April, indicating extremely low order growth
Looking ahead to the third quarter, although brands and ODMs still hope the traditional peak season can stimulate demand recovery, the forecasted growth rate for MLCC order volume remains low, hardly reflecting the usual uptick expected during the peak season One notable exception is the Japanese firm, Murata, which recently bagged an order for components for Apple’s iPhone 15, set to debut in 3Q23 The order volume has already nudged past last year’s figures, indicating that Apple is confident the upgraded hardware and software of the iPhone 15 will continue to turn heads in the consumer market
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
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TrendForce reveals that alongside the four major CSPs reducing their procurement volumes, OEMs like Dell and HPE have also scaled back their annual shipment volume forecasts at some point between February and April, predicting YoY declines of 15% and 12%, respectively Furthermore, server demand in China is facing headwinds due to geopolitical and economic challenges Consequently, TrendForce projects a downward revision in global server shipment volumes for this year—a 285% YoY decrease at 13835 million units
TrendForce emphasizes that the server market in 1H23 remains pessimistic, with 1Q23 shipments experiencing a 159% QoQ decrease due to off-season factors and end-user inventory adjustments The expected industry boom in 2Q23 failed to materialize, leading to a modest QoQ growth estimate of only 923% Persistent influences on server shipments include OEMs lowering shipment volumes, subdued domestic demand in China, and continuous supply chain inventory adjustments ESG issues have also led CSPs to prolong server lifecycles and reduce procurement volume Moreover, OEMs are lengthening supports period for older platforms as businesses seek to control capital expenditures, further contributing to market strain
Concurrently, with the growing excitement surrounding ChatBOTs this year, AI server shipments have witnessed a significant boost, driven by the proactive investments of industry giants such as Microsoft and Google TrendForce anticipates a remarkable 2023 growth rate surpassing 10% for AI server shipments However, as AI servers currently account for a relatively small portion (<10%) of total server shipments, their impact on revitalizing the sluggish server market remains fairly restricted
Whether the server market can rebound this year hinges upon the rate of inventory reduction Given current estimates, this turnaround could materialize as early as late 2023 or extend into the first half of 2024 Meanwhile, the rate of inventory depletion will also affect the schedule for introducing new platforms and may temper suppliers’ eagerness to transition to DDR5 and lower prices Taking into account present market conditions, TrendForce does not rule out the possibility of further downward revisions to annual server shipment forecasts
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
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TrendForce reveals that Chinese brands—capitalizing on the anticipation for the 618 shopping festival and overseas channels restocking their inventories—have pushed global TV shipments in 1Q23 to an impressive 4337 million units Despite the market being impacted by seasonal fluctuations, resulting in a 218% QoQ decline, shipment levels in 2Q23 are poised to recover to pre-pandemic levels at an estimated 4726 million units—a 9% QoQ increase Current projections indicate a notable growth in 1H23 shipments from brands compared to initial expectations at the beginning of the year Q1 and Q2 have seen an average uptick of 4%, primarily driven by a persistent surge in panel prices, which has encouraged some Chinese brands to stock up early and mitigate overall costs Considering the IMF’s projection for an economic growth rate below 3% for 2023, coupled with the ongoing impact of inflation on market demand for TVs, TrendForce anticipates a slight 12 YoY decrease in annual TV shipments, totaling 198 million units for the year
High inflation curbs demand for 8K and OLED TVs, prompting a slump in shipments
For high-end flagship products, the current economic climate proves unfavorable for sales of 8K and OLED TVs Hindered by hefty panel costs and exorbitant overall prices, 8K has struggled to gain traction in the market Compounding the issue, rampant inflation has been eating at the disposable income of consumers, contributing to a 74% nosedive in shipments last year Forecasts for this year indicate a continuation of negative growth As it stands, Samsung Electronics takes the lead in championing 8K products, cornering around 70% of the market share, while other brands exhibit tepid interest in promotion Consequently, 8K TVs have barely made a dent in the market with a meager penetration rate of 02–03% Demand for OLED TVs face similar headwinds, despite the persistent climb in LCD TV panel prices this year Although the gap between 55-inch UHD OLED and LCD panel prices will narrow from 42 times at the year’s start to 3 times in 2H23, it’s unlikely to spur brands to boost OLED shipments Projections indicate a sharp 172% drop in shipments, amounting to 558 million units
Hisense’s winning sales strategy in North America and China fuels shipment surge
Hisense deftly navigated both domestic and international markets in 2H22 Within China, Hisense utilized its sub-brand Vidda to capture the attention of young consumers with its innovative Music TVs, while Hisense’s own brand set its sights on the high-end market This dual-brand approach proved fruitful, catapulting Hisense’s market share in China to a remarkable 22% in 2022, hot on the heels of Xiaomi In overseas markets, the company homed in on promoting budget-friendly TV models; 40-inch and 58-inch models priced at a mere USD 158 and 268, respectively, became hot commodities among the top five US sales channels Hisense’s knack for delivering cost-effective options allowed it to weather the storm of inflationary pressures Its market share in North America soared to 11% in 2022, with projections expected to reach 15% this year TrendForce’s estimates paint a rosy picture for Hisense, with shipments expected to reach 267 million units this year, marking an impressive 111% YoY increase This accomplishment solidifies the brand’s position as the world’s second-largest TV manufacturer, boasting a global market share of 134%
618 presale event in late May to serve as a pivotal barometer for 2H23 TV demand projections
This year has seen prices of TV panels soaring, prompting Xiaomi to spearhead a move to hike retail prices for select TV sizes in China back in March, with rival brands trailing close behind in April Moving into the end of May, businesses are preparing for the 618 shopping festival, which represents the largest e-commerce promotional event in 1H23 The success of the presale event will serve as a crucial yardstick for brands as they gauge procurement plans for 2H23, subsequently impacting TV panel pricing trends TrendForce asserts that the decision to increase prices ahead of the 618 shopping festival reflects the limited profit margins currently found within the TV market—particularly for TVs under 65 inches It seems unlikely that promotional prices will surpass those from last year’s Double 11 shopping festival, casting doubt on the prospect of significant sales growth during the 618 event Furthermore, with Chinese brands losing steam in building up their inventories in June, panel makers will be compelled to exercise strict control over utilization rates to sustain the rising trajectory of TV panel prices
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TrendForce’s latest research indicates that, as production cuts to DRAM and NAND Flash have not kept pace with weakening demand, the ASP of some products is expected to decline further in 2Q23 DRAM prices are projected to fall 13~18%; NAND Flash is expected to fall between 8~13%
TrendForce reports that the significant drop in DRAM prices was mostly attributed to high inventory levels of DDR4 and LPDDR5 as PC DRAM, server DRAM, and mobile DRAM collectively account for over 85% of DRAM consumption Meanwhile, the market share for DDR5 remains relatively low
PC DRAM: Despite suppliers urgently reducing inventory, transaction volume has failed to increase due to the ample supply of DDR4 In contrast, prices for DDR5 are experiencing a far more moderate decline compared to DDR4 thanks to a tighter supply Overall, the ASP of PC DRAM is expected to decrease by 15~20% in 2Q23
Server DRAM: Weaker server demand has led to increased DDR4 inventory pressure on suppliers, with quarterly price declines expanding to 18~23% The supply of DDR5 has been constrained owing to PMIC compatibility issues, narrowing the price decline for server DRAM in 2Q23 to 13~18% However, given that DDR5’s market share remains low, its impact on price changes is limited, meaning the overall price decline in 2Q23 for server DRAM will remain between 15~20%
Mobile DRAM: Smartphone brands have finally finished correcting their memory inventories meaning a higher purchasing momentum compared to last year However, inventory pressure on suppliers continues to remain high, which means they are more willing to offer discounts Buyers have been merging Q3 demand with Q2 to increase their bargaining power, causing the ASP decline of mobile DRAM to expand to 13~18% in 2Q23
NAND Flash is primarily affected by enterprise SSD and UFS price drops, and the oversupply situation in the market has yet to be resolved These two products account for over 50% of total NAND Flash consumption
Enterprise SSD: Server demand continues to be revised downward, exacerbating inventory pressure on manufacturers Order volume in China has not significantly increased following the lifting of lockdown restrictions Orders for server ODMs have also struggled to grow due to high inventory levels, leading to the ASP decline of enterprise SSDs in 2Q23 to expand to 10~15% Demand for enterprise SSDs is expected to grow significantly in 2H23 as new platforms are released and inventory levels continue to fall
UFS: Smartphone brands have finally finished correcting their memory inventories meaning a higher purchasing momentum compared to last year However, inventory pressure on suppliers continues to remain high, which means they are more willing to offer discounts Buyers have been merging Q3 demand with Q2 to increase their bargaining power, causing the ASP decline of UFS to expand to 10~15% in 2Q23
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
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The ASP of battery-grade lithium carbonate and lithium hydroxide in China saw an MoM decline in the month of April, falling to CNY 198,000/ton (-39%) and CNY 266,000/ton (-33%), respectively, according to TrendForce research Although the MoM decline in prices has expanded, lithium salt prices began to show signs of stabilization and rebounded in late April Additionally, prices of lithium hexafluorophosphate (LiPF6)—a key raw material used in electrolytes— have recently started to rise again, prices of anode materials, iron phosphate, and lithium battery copper foil have almost bottomed out, and China’s EV battery industry chain is gradually stabilizing
Lithium salt prices experienced a five-month decline before stabilizing and rebounding in April This allowed the prices of various li-ion battery products to return to levels observed prior to the surge in demand at the end of 2021 Specifically, in April, the ASP of EV square ternary cells, LFP cells, and pouch ternary power cells were CNY 083/Wh, CNY 074/Wh, and CNY 087/Wh, respectively Taking a look at battery cells used in energy storage equipment, lithium iron phosphate (LFP) storage cells declined 105% MoM in April to around CNY 074/Wh However, the price of LFP materials has recently begun to rise, and businesses are receiving more orders As for battery cells used in consumer electronics, the ASP of cobalt lithium (LCO) cells in April was CNY 854/Ah (USD 124)—a 9% MoM decline—and the market has been showing signs of recovery
TrendForce observes that Chinese EV battery manufacturers are nearing the end of their inventory reduction efforts, and the relationship between supply and demand has gradually normalized after more than a quarter period of market adjustments Furthermore, current battery material prices are stabilizing and market demand is steadily increasing, indicating that China’s battery industry chain is gradually recovering Total recovery is expected in June as downstream demand continues to pick up
For more information on reports and market data from TrendForce’s Department of Green Energy Research, please click here, or email Ms Grace Li from the Sales Department at graceli@trendforcecom
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