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2023/04/24
TrendForce reports that mass production of new server platforms—such as Intel Sapphire Rapids and AMD Genoa—is imminent However, recent market reports have indicated a PMIC compatibility issue for server DDR5 RDIMMs; DRAM suppliers and PMIC vendors are working to address the problem TrendForce believes this will have two effects: First, DRAM suppliers will temporarily procure more PMICs from Monolithic Power Systems (MPS), which supplies PMICs without any issues Second, supply will inevitably be affected in the short term as current DDR5 server DRAM production still uses older processes, which will lead to a convergence in the price decline of DDR5 server DRAM in 2Q23—from the previously estimated 15~20% to 13~18%
As previously mentioned, PMIC issues and the production process relying on older processes are all having a short-term impact on the supply of DDR5 server DRAM SK hynix has gradually ramped up production and sales of 1α-nm, which, unlike 1y-nm, has yet to be fully verified by consumers Current production processes are still being dominated by Samsung and SK hynix’s 1y-nm and Micron’s 1z-nm; 1α and 1β-nm production is projected to increase in 2H23
TrendForce estimates that DDR5 server DRAM 32 GB prices are expected to decrease to US$80–90 during April and May, owing to lower fulfillment rates of DDR5 server DRAM in the short term However, this price estimate is slightly higher than the previous Q2 average estimate of US$75 In contrast, DDR4 prices are projected to fall by 18–23% in 2Q23, whereas DDR5 prices are expected to drop by 13–18% This indicates a larger quarterly price decline for DDR4 than DDR5, as the price gap between the two widens
AI indirectly helps drive up demand, 128 GB high-capacity modules see prices stop falling in April
The explosive popularity of ChatBOT has driven up demand for AI server shipments, leading to talks about HBM and boosting purchasing power for 128 GB server DDR5 RDIMM to accommodate ChatGPT 40 computing architecture This has led to an increase in demand for high-capacity RDIMMs in early 2Q23, primarily from US CSPs TrendForce reports that 128 GB RDIMMs require Through-silicon VIA (TSV) packaging, as the DDR5 mono die is mostly 16Gb However, main suppliers cannot increase their TSV production capacity in the short term, leading to further price increases for SK hynix’s high-capacity DDR5 modules this month This is in contrast to the current downward trend in the prices of DDR4 and other DDR5 products
Overall, compared to DDR4, DDR5 modules require PMIC components, which introduces the possibility of compatibility risks In the meanwhile, clients have also been delaying the mass production of new server platform models Even though DRAM suppliers have already been sending out samples to CPU vendors and buyers since early 2022, practical issues have only just begun to emerge as new server production ramps up TrendForce believes that the resulting changes in the price difference between DDR4 and DDR5 will be reflected in Q2 and Q3 of this year As the production of new products begins to ramp up, the price gap will converge
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
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/04/18
A strong growth in AI server shipments has driven demand for high bandwidth memory (HBM) TrendForce reports that the top three HBM suppliers in 2022 were SK hynix, Samsung, and Micron, with 50%, 40%, and 10% market share, respectively Furthermore, the specifications of high-end AI GPUs designed for deep learning have led to HBM product iteration To prepare for the launch of NVIDIA H100 and AMD MI300 in 2H23, all three major suppliers are planning for the mass production of HBM3 products At present, SK hynix is the only supplier that mass produces HBM3 products, and as a result, is projected to increase its market share to 53% as more customers adopt HBM3 Samsung and Micron are expected to start mass production sometime towards the end of this year or early 2024, with HBM market shares of 38% and 9%, respectively
AI server shipment volume expected to increase by 154% in 2023
NVIDIA’s DM/ML AI servers are equipped with an average of four or eight high-end graphics cards and two mainstream x86 server CPUs These servers are primarily used by top US cloud services providers such as Google, AWS, Meta, and Microsoft TrendForce analysis indicates that the shipment volume of servers with high-end GPGPUs is expected to increase by around 9% in 2022, with approximately 80% of these shipments concentrated in eight major cloud service providers in China and the US Looking ahead to 2023, Microsoft, Meta, Baidu, and ByteDance will launch generative AI products and services, further boosting AI server shipments It is estimated that the shipment volume of AI servers will increase by 154% this year, and a 122% CAGR for AI server shipments is projected from 2023 to 2027
AI servers stimulate a simultaneous increase in demand for server DRAM, SSD, and HBM
TrendForce points out that the rise of AI servers is likely to increase demand for memory usage While general servers have 500–600 GB of server DRAM, AI servers require significantly more—averaging between 12–17 TB with 64–128 GB per module For enterprise SSDs, priority is given to DRAM or HBM due to the high-speed requirements of AI servers, but there has yet to be a noticeable push to expand SSD capacity However, in terms of interface, PCIe 50 is more favored when it comes to addressing high-speed computing needs Additionally, AI servers tend to use GPGPUs, and with NVIDIA A100 80 GB configurations of four or eight, HBM usage would be around 320–640 GB As AI models grow increasingly complex, demand for server DRAM, SSDs, and HBM will grow simultaneously
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
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/03/28
TrendForce reports that several suppliers, such as Micron and SK hynix, have started scaling back DRAM production The ASP of DRAM plunged 20% in 1Q23, and this price decline is predicted to slow down to 10~15% next quarter It’s uncertain whether or not demand will recover in 2H23 Therefore, the ASP of DRAM has continued to fall as inventory levels are high from the suppliers’ side, and prices will only rebound if there is a significant decrease in production
PC DRAM: Purchase quantity from buyers has fallen drastically over the past three quarters; buyers have around 9~13 weeks of PC DRAM stock remaining Despite suppliers having already cut production in the PC DRAM segment, DDR4 8 GB module is still likely to fall by more than 10% in 2Q23 There is a possibility that PC OEMs may purchase more DRAM because prices have been down to a relatively low level, but it is still under observation whether or not this can mitigate the inventory overstock situation from the suppliers’ side TrendForce predicts the ASP of PC DRAM will fall between 10~15%
Server DRAM: Demand for server DRAM from OEMs and cloud service providers has been sluggish due to inventory adjustments In addition, consumer demand looks less than promising, prompting suppliers to increase the ratio of server DRAMs in their product mixes However, this resulted in a massive inventory pile-up during 1Q23 While most suppliers have lowered their capacity utilization rates, their efforts have yet to make a noticeable impact on declining prices TrendForce predicts that the ASP of server DRAM will fall 13~18% in 2Q23
Mobile DRAM: The DRAM inventories of smartphone brands have returned to a relatively healthy level However, these brands have mostly adopted a conservative plan of action for smartphone production, which means that buyer demand for mobile DRAM will be constrained in 2Q23 As a result, suppliers are under a great deal of pressure to sell off as much stock as possible Even with cutbacks being made in mobile DRAM production, reversing their current overstock will continue to be a challenge for these companies TrendForce predicts the ASP of mobile DRAM to continue falling as we move into 2Q23 Nevertheless, there is a possibility that the decline will shrink to 10~15%
Graphics DRAM: Buyers have been stocking up on graphics DRAM rather conservatively, while even AI has failed to make a considerable impact on demand Taking a mainstream product, the GDDR6 16 Gb, for example, TrendForce predicts ASP will fall 10~15% QoQ in 2Q23 due to constrained demand The DRAM industry is currently in the midst of transitioning from 8 to 16 Gb; Samsung’s GDDR6 8 Gb will reach its EOL at the end of the year Beginning 2024, SK hynix will be the only company still offering 8 Gb products Rolling back production could finally present an opportunity for the price of GDDR6 8 Gb to stop fluctuating aggressively
Consumer DRAM: Demand for networking devices has been relatively stable However, buyers have dialed back their procurement activities as of late given that existing orders have been completed These buyers appear to have conservative estimations of the growth potential of network-related demand this year, and the application market, which includes television, will be unable to support demand for the consumer DRAM market Supply continues to outpace demand even as suppliers reduce their production considerably TrendForce predicts that the ASP of consumer DRAM will fall 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
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/03/08
According to TrendForce’s latest survey of the server market, many cloud service providers (CSPs) have begun large-scale investments in the kinds of equipment that support artificial intelligence (AI) technologies This development is in response to the emergence of new applications such as self-driving cars, artificial intelligence of things (AIoT), and edge computing since 2018 TrendForce estimates that in 2022, AI servers that are equipped with general-purpose GPUs (GPGPUs) accounted for almost 1% of annual global server shipments Moving into 2023, shipments of AI servers are projected to grow by 8% YoY thanks to ChatBot and similar applications generating demand across AI-related fields Furthermore, shipments of AI servers are forecasted to increase at a CAGR of 108% from 2022 to 2026
TrendForce has also found that the four major North American CSPs (ie, Google, AWS, Meta, and Microsoft) together held the largest share of the annual total AI server demand in 2022, accounting for 662% of the annual global procurement quantity Turning to China, localization of manufacturing and self-sufficiency in critical technologies have been gaining momentum in recent years, so the build-out of the infrastructure for AI technologies has also accelerated in the country Among Chinese CSPs, ByteDance was the leader in the procurement of AI servers in 2022 Its share in the annual global procurement quantity came to 62% Following ByteDance were Tencent, Alibaba, and Baidu that comprised around 23%, 15%, and 15% respectively
AI-Based Optimization of Search Engines Is Driving Demand for HBM
Seeing a bright future in the development of AI technologies, Microsoft has invested a considerable sum in the well-known research laboratory OpenAI Furthermore, Microsoft launched an improved version of its search engine Bing this February The new Bing has incorporated a large-scale language model named Prometheus and the technology that underlays ChatGPT Prometheus, in particular, is a collaboration between Microsoft and OpenAI Not to be left out, Baidu launched ERNIE Bot this February as well Initially operating as a standalone software, ERNIE Bot will be integrated into Baidu’s own search engine at a later time
Regarding the models and specifications of the computing chips used in the aforementioned projects, ChatGPT has mainly adopted NVIDIA’s A100 and exclusively utilizes the cloud-based resources and services of Microsoft Azure If the demand from ChatGPT and Microsoft’s other applications are combined together, then Microsoft’s demand for AI servers is projected to total around 25,000 units for 2023 Turning to Baidu’s ERNIE Bot, it originally adopted NVIDIA’s A100 However, due to the export control restrictions implemented by the US Commerce Department, ERNIE Bot has now switched to the A800 If the demand from ERNIE Bot and Baidu’s other applications are combined together, then Baidu’s demand for AI servers is projected to total around 2,000 units for 2023 TrendForce’s survey has revealed that in the market for server GPUs used in AI-related computing, the mainstream products include the H100, A100, and A800 from NVIDIA and the MI250 and MI250X series from AMD It should be noted that the A800 is designed specifically for the Chinese market under the context of the latest export restrictions In terms of the market share for server GPUs, NVIDIA now controls about 80%, whereas AMD controls about 20%
Focusing just on the specifications of the aforementioned GPUs, ones that are involved in high-bandwidth computing and thus require high-bandwidth memory (HBM) have attracted even more attention in the market Using bits as the basis for calculation, TrendForce has found that HBM currently represents about 15% of the entire DRAM market The main suppliers for HBM solutions are Samsung, SK hynix and Micron Among them, SK hynix is expected to become the dominant supplier for HBM3 solutions as it is only one capable of mass producing the HBM3 solution that has been adopted by NVIDIA Also, since HBM solutions on the whole have a very entry high barrier with respect to manufacturing technology, memory suppliers regard them as products with a high gross margin
During the 2020~2021 period, when the COVID-19 pandemic was at its height, buyers of key components raised their inventories above the usual level because of worries about pandemic-induced shortages in the supply chain As a result, the demand for HBM solutions rose significantly in the same period However, the growth of this demand is expected to slow down in 2023 due to the pressure to make inventory corrections TrendForce currently forecasts that the market for HBM solutions will expand at a CAGR that is above the 40~45% range from 2023 to 2025 In sum, cloud companies around the world are going to invest more in AI servers over the years Presently, companies and organizations are scaling back IT spending as the global economy is being impacted by high inflation and sluggish growth However, with applications such as ChatBot and search engines driving the demand for an AI-based technological transformation, cloud companies will prioritize the related businesses or projects when allocating capital expenditure
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
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/03/01
The four major North American cloud service providers (CSPs) have made cuts to their server procurement quantities for this year because of economic headwinds and high inflation Turning to server OEMs such as Dell and HPE, they are observed to have scaled back the production of server motherboards at their ODM partners Given these developments, TrendForce now projects that global server shipments will grow by just 131% YoY to 1443 million units for 2023 This latest figure is a downward correction from the earlier estimation The revisions that server OEMs have made to their outlooks on shipments shows that the demand for end products has become much weaker than expected They also highlight factors such as buyers of enterprise servers imposing a stricter control of their budgets and server OEMs’ inventory corrections
Customers of US-Based Server OEMs Are Slow to Adopt New CPU Platforms, Thus Affecting HPE’s and Dell’s Shipment Growth Rates for 2023
US-based server OEMs, including Dell and HPE as the long-established leading brands for enterprise servers, will be compelled to significantly lower their annual shipment targets for 2023 As for Inspur that is the world’s third largest server OEM, its shipments are going to be mainly influenced by government policies Looking at Dell, it has to deal with the piles of barebones that have accumulated at its ODM partners and warehouses A possible temporary solution is to reallocate the orders going to ODMs so as to relieve some of the pressure However, even if Dell does this, the effect on its bloated inventory will be quite limited TrendForce has corrected down Dell’s server shipments for 2023 and enlarged the estimated YoY decline to 81% As for HPE, it has not made any significant adjustments for now, but its server shipments for 2023 are still projected to drop by 62% YoY
Moreover, TrendForce’s latest investigation finds that after the general adoption of Intel’s Ice Lake platform, most buyers of enterprise servers want to slow down the migration of server CPUs given the total cost of ownership Thus, their passiveness will not only directly affect the shipment share of the servers running on Intel’s Sapphire Rapids platform in 2023 but also the schedule for the switch to Intel’s Emerald Rapids as the follow-up platform With the advancement of the CPU platform not progressing as smoothly as expected, Dell and HPE remain at risk of experiencing further drops in shipments
Inspur Will Face Difficulties in Raising Shipments as Chinese CSPs Cut Their Respective Annual Server Procurement Quantities by Half
Regarding the Chinese server market, its demand has been strongly influenced by government policies such as the projects related to the Government Cloud and the East-to-West Computing Initiative Also, while the Chinese market is undergoing a major transformation at this moment, this development has not significantly affected global server demand as a whole Nevertheless, a series of changes within the ecosystem will be taking place in the country As for Inspur, most of its server shipments during this year will go to tenders for national-level projects or from major state-owned telecom operators Looking ahead, the Chinese server market is expected to remain relatively weak up to the Two Sessions that will be held by the Chinese government in March After the conclusion of this major political event, server shipments in China are expected to start to gradually pick up in 2Q23 However, TrendForce currently projects that Inspur will continue to experience declining shipments this year The YoY drop is now estimated around 32%
There are four main factors behind Inspur's YoY drop for 2023 First, the demand from internet-based services was previously huge in scale but has now shrunk considerably Therefore, the major Chinese CSPs such as Baidu, Alibaba, and Tencent have reduced their respective annual server procurement quantities by about half Second, the export control rules implemented by the US Commerce Department have caused delays in the tenders related to the Government Cloud and the East-to-West Computing Initiative Third, Inspur will be facing more intense competition in the domestic market In additional to newly established domestic server OEMs such as ZTE, H3C, and xFusion, there are also third-party organizations that are supported by government programs for promoting startups and innovations These competitors will likely take a significant chunk of Inspur’s market share Lastly, even though China is moving on from the COVID-19 pandemic, the positive responses from the demand side of the country’s economy have not generated enough momentum for a strong and sustainable recovery At the same time, inflation is dampening consumer spending, so companies across many sectors have postponed their procurement plans
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
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
