The third quarter is the traditional peak season for the electronics industry, but concerns about weak downstream market demand this year have always enveloped the entire industry, and the semiconductor sector on the disk has experienced a phased correction. Among them, the supply and demand of representative semiconductor storage has an inflection point, and the industry predicts DRAM, NAND
Flash will enter a price decline cycle. On the other hand, a reporter from the Securities Times noticed that in the face of chip shortages, international giants continued to expand production, and domestic storage head-echelon companies generally performed well in the third quarter, speeding up product iteration and deepening the industry chain, and actively Layout the automobile and other markets.
Loosening of storage market prices
“From the perspective of market conditions and trends, storage should have fallen.” An industry insider from Shenzhen Huaqiangbei confirmed to reporters that MCU prices, which are particularly fierce for out-of-stock prices, have also loosened slightly. On the whole, high-grade electronic components have been long-term Still out of stock status.
Entering the third quarter, chip prices have diverged significantly. Memory chips are an important branch of the semiconductor industry, and DRAM prices have fallen continuously. Wind shows that taking a certain 8GB DDR4 memory as an example, the spot price of the product dropped from $3.11 in August to the latest $2.24; the smaller 4GB product also dropped.
TrendForce Consulting pointed out that due to the contraction of DRAM purchases in the market and the leading decline in spot prices, it is expected that the contract price in the fourth quarter will have a high chance of reversing, and it is expected to fall by 3% to 8%, ending only three quarters of increase. Cycle; In addition, it is expected that the NAND Flash market procurement demand will also weaken, and the contract price in the fourth quarter will turn to a slight decline of 0 to 5%, ending the two-quarter increase cycle. It is expected that the overall NAND Flash market will enter a price decline cycle in 2022.
TrendForce TrendForce analyst Wu Yating told reporters: “Whether it is DRAM or NAND Flash, the price decline is expected to continue into the first half of next year. Among them, the main reason is that the growth of demand is lower than the growth of supply.”
Statistics show, smartcell phone, Server and notebook computer market is usually the main DRAM consumption market. Since the beginning of this year, the growth has been strong, and the year-on-year base of 2022 has been relatively increased. Therefore, it will be more difficult to increase production and shipments next year. In addition, the shortage of electronic components will be difficult for the long-term. Relief, terminal product assembly will also be restricted. It is estimated that the growth rate of the demand side of DRAM in 2022 is only 16.3%, which will be lower than the growth rate of the supply side.
In an interview with the media, Gou Jiazhang, general manager of Huirong Technology, a storage master chip factory, said that the demand for terminal consumer electronics was strong in the first half of this year, but the demand for mobile phones has declined since June. Demand for storage products; compared to strong demand for business computers, consumer computers began to decline sharply in July this year, and there has been a slow recovery trend recently.
In addition, the latest market data disclosed by the data research organization Counterpoint Research shows that the sales of smart phones in China in the third quarter of 2021 decreased by 9% year-on-year and increased by 3% month-on-month, reaching 76.5 million units. Due to the impact of weak consumer demand and the shortage of electronic components on terminal demand, the domestic smartphone market failed to show any significant improvement in sales in the third quarter of 2021.
Industry insiders pointed out that last year, as clients, especially consumer electronics, were worried about traffic jams during the epidemic, increasing inventory, and storage prices continued to rise. Later, as the epidemic eased, some prices for memory began to fall again. This year, a similar situation appeared in the market. At this stage, the high inventory level and the lack of demand for new products have led to the lack of market performance during the peak season. Next, we hope that there will be a wave of stocking at the end of the year.
Although the storage market has undergone adjustments, the international storage giants are optimistic about the market demand for data centers, automobiles, etc., and considering the lack of core conditions, they will continue to promote production expansion.
SK Hynix, the world’s second-largest memory chip manufacturer, disclosed that the company’s net profit in the third quarter was approximately 3.315 trillion won (US$2.843 billion), an increase of 67% from the previous quarter and an increase of approximately 2 times year-on-year. Among them, due to the plan of some customers to digest their own inventory first, and the weak PC market demand, the negotiation time with some customers has been extended, the revenue main DRAM Bit shipment growth is slightly lower than expected, but the average unit price of the company’s DRAM products still maintains The growth of nearly 10%, coupled with the improvement of DRAM product yield and the increase in production proportion, has reduced unit costs and ensured the profitability of this part of the business; in addition, the NAND business turned losses into profits.
Looking ahead, SK Hynix said that for suppliers including Hynix, inventories are still at historically low levels, and the company will be more flexible in responding to the market environment; considering the demand from data centers, the NAND market has broad growth potential. Therefore, the supply of DRAM will be conservative from the second half of this year to the first half of next year; and the supply of NAND will be in line with the market demand growth.
SK Hynix also announced on October 29 that it would acquire Key Foundry, a South Korean foundry company, for approximately US$492 million. Key Foundry mainly produces chips for power management, display drivers and microcontroller unit semiconductors (MCU). After the acquisition, SK Hynix expects that its 8-inch foundry capacity will double.
Another storage OEM giantMikoTechnology revealed that it will expand the scale of its wafer fabs in the United States. Regarding changes in the memory chip market, Micron Technology executives acknowledged that the shipments of memory chips will moderately decline from a very strong level in the short term; however, the demand for the memory market in 2022 will be affected by shipments of data centers, servers, and 5G mobile phones. And the pull of the automotive and industrial markets.
Samsung Electronics executives also stated on a recent earnings conference call that considering the global chip shortage, which has caused key industries from automobiles to smart phones to face production problems, Samsung plans to expand foundry production, and it is expected that the production capacity will reach three times the current by 2026. .
Regarding the expansion of international giants, Wu Yating pointed out to reporters that although capital expenditures will remain high next year, they will mainly be used for process transfer and longer-term capacity planning. Therefore, the investment expansion in 2022 will not be too obvious; consider current storage It has entered a situation of oversupply, and average prices have begun to decline; however, since the industry is still in the order of production planning, it is expected that the price decline will not be lower than the total amortized production cost, so most suppliers will continue to be in gains. Benefit state.
In addition to the original storage plant, other foundries are also actively expanding production. Foundry leader TSMC recently reported that it will join hands with Sony to set up a factory in Japan; GlobalFoundries, the fourth largest foundry in the world, will officially land on Nasdaq on October 28 and will invest US$6 billion in the next two years. Expand its production capacity in Singapore, Germany and the United States.
According to statistics from TrendForce, driven by the price increase led by TSMC, it is expected that the output value of foundry will reach US$117.69 billion next year, with an annual growth rate of 13.3%. Major foundries have announced that their expanded production capacity will continue in 2022. The new production capacity is concentrated in the 40nm and 28nm processes. It is expected that the extremely tight chip supply at this stage will be slightly relieved; but considering the stocking situation of the industry chain by then, the phenomenon of capacity relief is expected to be not obvious.
IDC warns of the risk of overcapacity of semiconductors in the future. It is expected that the semiconductor industry will reach equilibrium in the middle of 2022. With the large-scale expansion of production capacity at the end of 2022 and 2023, overcapacity may appear in 2023.
In-depth alliance of domestic storage echelon
Judging from the performance of the third quarter, the overall performance of A-share semiconductor listed companies is improving. Wind statistics show that as of October 29, about 90% of listed companies in the semiconductor industry that have disclosed their performance have achieved year-on-year growth in net profit in the first three quarters, and the median year-on-year growth rate has also set a historical record in the past three years. The highest record in the same period; further, a number of listed companies including storage businesses have achieved significant growth, and they have strengthened their deep integration with the industry chain and expanded cooperation in the automotive field.
Among them, the net profit of Guokewei in the first three quarters of this year increased by about 119 times year-on-year to 181 million yuan, of which the main profit contribution was concentrated in the third quarter. During the period, the company’s revenue from multiple product lines increased and its performance increased.
Guoke Micro is mainly responsible for providing data storage, multimedia and satellite positioning chip solutions, and adopts the Fabless mode of operation and production. Compared with other solid-state drive companies, the company has its own controller chip. Its self-developed solid-state storage controller GK2302 series chip has been developed in multiple versions, and has passed the dual certification of the national test and national secret, and has achieved large-scale quantities. Production; the company’s next-generation solid-state storage controller chip GK2302 V200 has also been mass-produced, and products based on this chip have also been officially launched in 2021. At the same time, the company has also deepened upstream and downstream connections to ensure wafer production capacity in the out-of-stock market.
In a recent interview with the media, Tian Dahai, general manager of the product department of Guoke Microelectronics, pointed out that the company and Yangtze River Storage have become strategic partners in 2019 and signed a long-term supply agreement; in addition, the storage main control chip is out of stock this year, and China Kewei adopts self-developed main control chip and orders one year in advance, so it can smooth the impact of the lack of core tide. Judging from the current market share, Guokewei is already in the first echelon in the domestic storage market.
As a domestic storage leader, Zhaoyi Innovation’s net profit in the third quarter was 862 million yuan, a year-on-year increase of 178.47%, and its net profit after non-deduction increased by about 2 times. Zhaoyi Innovation focuses on NOR Flash storage, and it ranked third in the world last year. At the same time, Zhaoyi Innovation has entered the DRAM chip market, and its cooperation with Changxin Storage is mainly for niche markets and has already formed a profit contribution. In June of this year, Zhaoyi innovatively launched its first own-brand DRAM product, which has been certified on mainstream consumer platforms and has been mass-produced and used on many clients. According to the company’s executives in the September institutional survey, 19nmDDR4 has been mass-produced and shipped, and 17nmDDR3 is actively being developed. If it goes well, it is expected to contribute revenue to the company next year. In the automotive field, Zhaoyi has launched a nationwide production of automotive-specific flash memory chips, with a data throughput rate of more than 5 times that of existing products.
Through the acquisition and consolidation of Beijing Sicheng (formerly ISSI), Beijing Junzheng has also entered the memory chip business and is leading the domestic automotive storage IC. In the third quarter of this year, the company continued its rapid growth trend, and its profit increased nearly 25 times year-on-year to 280 million yuan. In addition to DRAM products, Beijing Junzheng is also promoting the application of Flash product lines in the automotive, medical and high-end consumer markets. In addition, the company has completed sample production and launched market promotion for Nor Flash chips for the mass consumer market.
In the context of the shortage of foundry capacity, Beijing Jun also strengthened the capital binding with the upstream supply chain. In July of this year, Beijing Junzheng increased its investment in wafer foundry Rongxin Semiconductor, and plans to spend 100 million yuan to subscribe for Rongxin Semiconductor’s registered capital of 4 million yuan; on the other hand, Beijing Junzheng’s 1.3 billion yuan fixed increase will receive Weal The shares are subscribed for 550 million yuan to form a business strategic cooperation between automotive CIS and automotive storage IC.
In addition, the third-quarter net profit of Lanqi Technology, a sci-tech innovation board storage interface chip maker, was about 200 million yuan, a year-on-year decrease of 25%, and the net profit after non-deduction increased by about 13% year-on-year. According to reports, as the cloud computing industry entered the destocking stage from the second half of last year, coupled with the DDR4 memory interface chip entering the later stage of the product life cycle, product prices have fallen compared with the same period last year, dragging down performance; and as the industry continues to recover and promote Due to the good performance of the server platform product line, the company’s performance is showing an obvious trend of improving quarter by quarter. In the third quarter of 2021, operating income has more than doubled year-on-year. In addition, in October this year, the company’s DDR5 first-generation memory interface chip and memory module supporting chips have successfully achieved mass production.