Delay in Intel's 7-nm Chip Release Bad News for Samsung’s Memory Business
Intel’s announcement last week that it will delay the release of a 7nm process-based microprocessor by about six months is expected to negatively affect Samsung Electronics, which is the world’s number-one DRAM and NAND flash memory maker.
Intel announced on July 23 (local time) that the release date of the Meteor Lake microprocessor will be at the end of 2022 or early 2023, about six months late compared to the previously announced release date.
Given that Intel usually releases a microprocessor for PCs first and then that for servers about a year later, it is predicted that CPUs for servers will be released at the end of 2023 at the earliest.
Intel announced that it will release Tiger Lake, a 10nm CPU for PCs, in the third quarter of 2020 and Ice Lake, a 10nm CPU for servers within this year. But the announcement was not enough to ease market concerns. The stock price of Intel plunged more than 10 percent in after-hours trading.
Industry insiders predict that Intel's late technological advancement will provide an opportunity for its rival AMD. AMD has 7nm CPU design technology and outsources production to TSMC. The foundry business departments of TSMC and Samsung Electronics are currently able to mass-produce 5nm semiconductors based on extreme ultraviolet (EUV) lithography equipment.
Intel, on the other hand, produces CPUs on its own without relying on foundry companies. But the company cannot invest in advanced foundry processes as much as TSMC and Samsung Electronics do. This is why some predict that the gap between Intel and AMD will narrow. AMD's share of the PC CPU market exceeded 17 percent in the first quarter of 2020, more than double from five years ago, according to market research firm Mercury Research
Intel's slump is a negative factor for memory semiconductor makers such as Samsung Electronics. Cloud business companies such as Microsoft and Amazon increase their purchases of DRAMs and NAND flashes that will run together with new CPUs for servers. With a recent surge in "untact demand" due to the spread of the new coronavirus, Intel’s release of a new CPU could fuel another super cycle for memory producers. SK Hynix benefited from increased demand for chips stemming from an increase in untact services. The share of DRAMs for servers in its sales rose close to 50 percent in the second quarter of 2020. On the other hand, due to the delay in Intel's release of state-of-the-art CPUs, Samsung Electronics and others will have to make money by increasing sales of mobile DRAMs for smartphones.
PCB firms optimistic about notebook demand in 2H20
Taiwan-based PCB manufacturers are optimistic about demand for notebook applications in the second half of 2020, judging from the outlook given by notebook ODMs.
PCB demand for notebooks is set to stay robust in the third quarter, according to sources at PCB makers.
Besides, notebook-related chip suppliers have suggested clear order visibility through the fourth quarter, said the sources. In particular, demand for Chromebook, mid-range notebooks and gaming notebooks will remain strong through the quarter, the sources indicated.
Notebook sales, particularly sales of commercial models, were impressive in the first half of 2020 thanks mainly to coronavirus-induced increasing work-from-home trend, the sources said.
Taiwan-based notebook PCB specialists include Gold Circuit Electronics (GCE), HannStar Board, Taiwan PCB Techvest (TPT) and Tripod Technology.
AP Memory Joins NXP Partner Program
AP Memory Technology Corporation (AP Memory, TWSE: 6531), a leading supplier of innovative DRAM products, has joined the NXP Connect Partner Program. AP Memory is a memory IC design company focusing on low to mid density DRAM solutions, providing a full range of IoT RAM (low pin count QSPI/OPI PSRAM), ADMUX PSRAM (CellularRAM™), and low power DRAM (LPDDR2/LPDDR3). Partnering with an advanced DRAM technology foundry, AP Memory offers products with world-class power, performance, supply longevity, and quality. AP Memory's innovative products have been widely adopted in mobile, IoT, wearable, AI, and other applications. Since the company's inception, AP Memory has shipped nearly 10 billion devices. AP Memory supports a wide range of NXP MCU and applications processors.
AP Memory differentiates itself as a leading customized DRAM supplier. AP Memory is the first company to define and deliver DDR PSRAM, Octal-SPI PSRAM, Quad-SPI PSRAM, ultra-low-power PSRAM, ultra-high-speed PSRAM, among many application-optimized products.
"We are delighted to be joining the NXP Partner Program and look forward to serving NXP customers, and making their solutions more competitive," says Ivan Hong, Vice President and General Manager of IoT Business Unit of AP Memory.
"With the advent of IoT and AI, memory is an important part of our MCU and MPU platforms. We are very pleased to add AP Memory to our partner program. Their solutions will help our customers better realize the full potential of our products," Robert Thompson, Director, Edge Processing MPU Ecosystem, NXP Semiconductors.
Intel may expand partnership with TSMC
As Intel is facing troubles to improve its manufacturing processes, the CPU giant is now seeking outside help in production of some of its processors with TSMC having a high chance to be one of the partners. Meanwhile, PCB makers Zhen Ding and AT&S now together supply 60% of SLP used in iPhones and Apple Watch, leaving about 40% shared among smaller suppliers. Because of the uprising opportunity of 5G, ASE has been increasing its capacity of FC-AiP packaging and is looking to stay at the top of the industry for the 5G sector.
TSMC EUV nodes to attract orders from Intel, sources say: Intel at its recent earnings call disclosed that its next-generation 7nm processors, including the company's first 7nm datacenter GPU design, would rely on external and internal process technologies, sparking speculation about TSMC being its potential foundry partner.
Zhen Ding, AT&S lead in SLP mainboard supply for iPhones, Apple Watch: SLP (substrate-like PCBs) makers in the supply chain of Apple devices have ended their first wave of competition, with Taiwan's Zhen Ding Technology and Austria's AT&S each absorbing 30% of orders for iPhone and Apple Watch applications, according to industry sources.
ASE ramping up FC-AiP packaging capacity: ASE Technology Holding has continued committing equity investments to build up its FC-AiP (flip chip-antenna in package) packaging capacity seeking to maintain its leading position in the sector, according to industry sources.
PS5 shipments may reach at least 120 million units in next 5 years
Sony's new-generation PS5 game console shipments are estimated to reach at least 120 million units in the next five years after launch in fourth-quarter 2020, roughly double those for Microsoft's Xbox series X, according to sources of its backend supply chain in Taiwan.
The life cycle for household game consoles may be shortened to five years from 6-7 years, and PS5 shipments may challenge 120-170 million units when its 5-year cycle expires, compared to 110 million units registered to date for PS4 launched in November 2013, the sources said, adding that Sony has recently boosted its PS5 shipment estimate for 2020 to near 10 million units.
AMD-designed processors for the device fabricated by TSMC on its 7nm node and packaged by ASE Technology and Siliconeware Precision Industries (SPIL) with its FCBGA process are already being delivered to Sony, and shipments of peripheral chipsets are expected to peak later in the third quarter to support first wave of terminal sales in the fourth quarter, the sources continued.
Taiwan's chipmaker ZillTek Technology and China's AAC Technologies now share Sony's orders for handle controller chips for PS5, and another two Taiwanese IC designers Nuvoton Technology and Genesys Logic are supplying MCUs and USB hub controllers, respectively, for the device, with Greatek Electronics as their backend partner. Meanwhile, Phison Electronics reportedly has also cut into PS5 supply chain with its SSD controller chips packaged by Taiwan's OSE, the sources added.
PC chipmakers seeking more foundry support to digest ballooning orders
Taiwan's designers of peripheral chips for PCs and notebooks are trying hard to vie for more capacity support from foundry partners seeking to meet strong replacement demand in the third quarter, according to industry sources.
IC designers of USB host controllers, power management solutions, display driver ICs, keyboard and other embedded controllers have seen their inventories cleared by vendors of commercial notebooks and other consumer models supporting remote work and study amid the coronavirus pandemic since the second quarter of the year, the sources said.
The designers, including ITE Tech, Elan Microelectronics, Genesys Logic, Leadtrend Technology, ASMedia Technology, Parade Technologies, and Realtek Semiconductors have also enjoyed a significant ramp-up in additional rush orders from clients eager to cash in on the upcoming replacement boom for gaming and consumer notebooks, with order visibility stretching to the fourth quarter, the sources continued.
This is expected to help the chipmakers gain significant revenue growth momentum in the months ahead. Keyboard controller chips specialist ITE Tech and stylus and touch solutions provider Elan Microelectronics, for instance, expect their third-quarter 2020 revenues to grow over 20% sequentially to hit new highs.
But whether the chipmakers can smoothly fulfill the orders hinge largely on whether they can secure sufficient capacity support from foundry houses TSMC, United Microelectronics (UMC) and Vanguard International Semiconductor (VIS), the sources said.
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