Summary Overview

IC Market

1. The shortage of GPUs is expected to continue until at least next year.
2. According to an agency, global NAND flash sales declined by 16% in the first quarter.
3. The industry anticipates that the inventory levels of middle and lower-tier memory chips have reached a healthy level.
4. Two new research and development centers in Japan have officially opened.
5. Huatai Electronics, a storage IC packaging and testing factory, expects a moderate recovery in revenue during the second and third quarters.

Wafer foundry
6. The CEO of NVIDIA has confirmed that TSMC is the exclusive manufacturer of the H100 product.
7. According to a recent report by an agency, the global foundry revenue is expected to experience a
9.2% decline in 2023.

Application areas

8. There is news indicating that the inventory situation in the PC channel has normalized to a reasonable
level.

Report in full

IC Market:

1. GPU shortages will continue until at least next year
According to a report from the Shanghai Securities News, industry insiders have revealed that the computing power market is experiencing robust demand, driven by the surge in large-scale models. This has led to a persistent shortage of computing power servers with long distribution cycles. Server manufacturers are expected to face waiting periods of more than six months to acquire the latest GPUs, indicating that the GPU shortage will persist until at least next year.

Data shows that GPU-based computing power, particularly in the field of artificial intelligence, has witnessed rapid growth in recent years. In 2016, domestic AI computing power accounted for only around 3% of the overall computing power structure. However, by 2022, this proportion has surpassed 50%, highlighting the significant expansion of GPU-driven computing power in the market.

2. Agency: Global NAND flash sales fell 16% in the first quarter
Based on research conducted by TrendForce, the global NAND flash memory industry generated approximately $8.63 billion in revenue during the first quarter. This represents a month-on-month decline of 16.1%, following a 25% decrease in the fourth quarter of the previous year. Set state consulting forecasts a 5.2% increase in overall shipments of NAND flash memory in the second quarter. However, due to manufacturers still facing pressure to clear inventory, the average selling price (ASP) of the products continues to decline. As a result, it is anticipated that the second-quarter revenue for the NAND flash memory industry will experience a further decline of approximately 7.9% compared to the previous quarter.

3. The industry expects that the storage of the middle and lower reaches of the memory chip has fallen to a healthy level.
According to MoneyDJ news, the DRAM industry has reduced production, leading to a potential flat or negative growth in annual DRAM bit output. The impact will take about four months to be realized. However, high inventory levels have decreased to a healthy level after several seasons of price declines. Market expectations are for a rapid recovery once there is significant replenishment demand, driving a rebound in quotations and market growth.

4. Two New Research and Development Centers in Japan are Officially Open
On June 2, the Japanese storage giant Kaisha announced the completion and official opening of two new R&D and design centers in Japan. The centers are named Kaisha Yokohama Science and Technology Park and Shin-Koyas Frontier Technology Center. These state-of-the-art facilities, which underwent construction over several years, will focus on advanced storage technology research and development.

5. Storage IC Packaging and Testing Factory Huatai Electronics Q2, Q3 revenue is expected to moderate recovery
With the storage market situation becoming more defined, manufacturers within the production chain are anticipating an improvement in operating momentum in the second half of the year. Among them, AI servers hold the most promising potential for driving growth. As the storage industry continues to recover, post-test orders are expected to increase, providing an opportunity for the storage IC packaging and testing factory, Huatai Electronics, to experience a moderate recovery in the second and third quarters of this year.

Wafer foundry

6. NVIDIA CEO: H100 Exclusively Manufactured by TSMC
According to a report from Taiwanese media, Electronic Times, the CEO of Nvidia has stated that the H100 product is exclusively manufactured by TSMC and there are no plans to add a second wafer foundry. This decision is primarily due to the complexity of the entire design foundry process, making it difficult to divide the production between two foundry manufacturers. Nvidia and TSMC have already initiated plans for cooperation on 3/2nm technology. Huang Jensen, the CEO, also confirmed that TSMC will continue to be the sole provider of the next generation of AI chips for Nvidia, particularly in the AI GPU series, for the next few years. The A100/A800 and H100 products are manufactured solely by TSMC, while the RTX40 series has shifted to TSMC’s 4nm process. The RTX30 series, on the other hand, utilizes Samsung’s 8nm process, with Nvidia and Samsung currently collaborating on memory-related aspects.

7. Agency: Global Foundry Revenue to Decline 9.2% in 2023
On June 1, DIGITIMES Research made a prediction regarding the global foundry industry, stating that it anticipates a 9.2% decline in revenue for 2023. This projection comes as chip demand weakens and inventory adjustments in the first half of the year take longer than expected. The global fab revenue outlook is further challenged by the overall subdued demand for foundries, attributed to the global economic slowdown. Eric Chen, an analyst at the analysis of mechanisms, highlights that although the AI boom is driving growth in high-performance computing (HPC), the overall demand for foundries remains muted.

Application areas

8. News that PC channel inventory has returned to a reasonable situation
On June 1, DIGITIMES Research made a prediction regarding the global foundry industry, stating that it anticipates a 9.2% decline in revenue for 2023. This projection comes as chip demand weakens and inventory adjustments in the first half of the year take longer than expected. The global fab revenue outlook is further challenged by the overall subdued demand for foundries, attributed to the global economic slowdown. Eric Chen, an analyst at the analysis of mechanisms, highlights that although the AI boom is driving growth in high-performance computing (HPC), the overall demand for foundries remains muted.