Market Intelligence
September 7, 2022

The Greensheet: August 2022

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CPU

Cost savings opportunities on the horizon

As customers in China cancel orders or delay Server CPU projects, supply has slowly been improving alongside pricing decreases. Lead time delivery could be affected by shifting forecasts and higher inventory levels, but the overall trend will likely benefit customers who seek to take advantage of the current market.

Ethernet controller shortages prompting redesigns or alternates

Open market demand on WGI210IT Ethernet Controller I210-IT and WGI210IS Ethernet Controller I210-IS has dropped, but supply remains constrained. To meet the needs of customers, Intel is reportedly releasing a million pieces of WGI211AT Ethernet Controller I211-AT, but it is unclear whether this will ease the current imbalance between supply and demand. This is ahead of the EOL PCN on the WG1211AT, which has listed the Last Product Discontinuance Order Date as April 22, 2022, and Last Product Discontinuance Shipment Date as October 22, 2022. Recommended replacements include:

  • WGI210AT Ethernet Controller I210-AT
  • KTI225LM Ethernet Controller I225-LM
  • KTI226LM Ethernet Controller I226-LM

Motherboard layouts will need to be modified to use either KTI225LM or KTI226LM. Those looking to make use of WGI211AT & WGI210AT should purchase as soon as possible, as supply is still constrained, and the additional demand could further expand lead times and pricing.

Demand for Intel’s Gen Comet Lake and Gen Rocket Lake takes off

Demand within China has increased interest in the 11th Gen Rocket Lake and 12th Gen Alder Lake, with more customers going to the open market for sourcing. Additionally, Intel’s 10th Gen Comet Lake desktop CPUs are seeing more inquiries and transactions, with the top models being i5-10400, i5 –10500 and i7-10700. The 10th Gen Comet Lake desktop CPUs were launched in 2020 and are nearing the end of their product lifecycle. Customers with consistent demand for this component should purchase stock before supply dries up. Despite prices rising by at least 2% for the 11th Gen Rocket Lake, cost saving opportunities are still available for Intel desktop CPU customers.

 

Memory

Memory module space sees increased activity

Overall memory module demand was trending down during the previous quarter, but activity has increased on the open market of late. Customers tracking pricing trends are taking advantage of opportunities for PPV cost savings on the open market.

Based on June reports, pricing is likely to continue to drop, as supply outweighs demand. Manufacturers are still chasing numbers to meet targets, which is forcing vendors to commit numbers and orders to manufacturers. Prices for 16GB, 32GB and 64GB are dropping by 5 – 8%. This pattern is predicted to continue next quarter if demand stays soft and vendors carry the burden of high inventory levels.

 

 

Finished Products

Supply improves for Intel and Mellanox customers, but not for long

Project cancellations across Asia have improved availability and pricing of Mellanox’s MCX4 and MCX5, but the MCX6 series remains in tight supply. The surplus situation and falling prices are not expected to last, as global demand remains high. Additionally, an incoming EOL notice planned for the first half of 2023 is dictating a 50% production cut for the MCX5 series. Manufacturing capacity will be shifting to the MCX6 series.

For Intel, the availability of chipsets for network adapter cards has improved. However, components for the boards are still hard to come by overall, particularly for the I350T2V2 model. The shortage is predicted to persist through Q3, with possible relief in Q4. In the interim, prices are expected to rise alongside manufacturing costs.

 

GPU

Excess inventory and decreased demand trigger price changes

Consumer-grade and gaming graphic cards have seen a drop in demand, resulting in oversupply. As the market struggles to digest the inventory, manufacturers are likely to reduce official pricing to expunge existing stock. This move would also ensure a smooth launch of the new series 40xx. Other upcoming releases include a high-end model of NVIDIA’s RTX 3090, which will be discontinued as the new model enters the market. The release is planned for Q3, with lower end versions to follow.

In contrast, AI and datacenter customers are showing consistent need for GPUs. The new A100 80 GB, which replaced the A100 40 GB, remains in high demand.

 

STORAGE

Intel announces popular SSD series EOL soon

Market pricing for Intel’s popular SSD series will remain at the current level as they move towards EOL status. Components affected by the EOL notice include:

  • S4510
  • S4610
  • S4520
  • S4620

Intel will be lowering costs for NVMe models by 3 – 5% during Q3. This has improved demand, particularly for large capacity 1.92 TB and above. Price for SATA SSD remains unchanged.

Other major SSD manufacturers also intend to reduce prices on enterprise SSDs. Samsung and Micron are experiencing lower demand, which will affect pricing as Samsung expects an overall drop of 8%. Additionally, shortages persist for Solidigm SATA SSD in small caps, 1 TB and below, and Q3 allocation will continue to be limited.

 

 

IC

Samsung intensifies competition with the latest in Nanosheet fabrication

Although TSMC has already won the 5nm market “arms race,” Samsung is looking to use the latest Nanosheet technology to corner the market in 3nm process technology. Samsung is expected to break through the performance limitations of FinFET and provide more advanced innovations to shift the 2D chip process from 5nm and 7nm to 3nm.

Each chip will feature improved power efficiency and performance. Samsung’s chips will be unmatched in the field of GAA, due to the Nanosheet technology, and have wider channels to support higher performance to meet customers’ additional needs.

The advancements in the 3nm chips are substantial, but they currently cannot replace 5nm chips. At present, the 3nm market is small, as the market is still working towards recognizing the new process.

To avoid declining demand for products like high-end smart electronics, Samsung is looking to the future by replacing the management of foundry manufacturing. Through these technological reforms, Samsung aims to compete on a higher level with TSMC and Intel.

Power disruptions temporarily pause production

A power disruption temporarily paused production at Micron’s Hiroshima DRAM plant, which produces 1-beta DRAM chips, mostly about DDR4, and supplies for end products like high-end smartphones and other high-performance portable devices. Similarly, Renesas also experienced a brief shutdown at its Kumamoto City plant due to a lightning strike. The factory, which is responsible for the majority of Renesas MCUs, was back to full production capacity on July 11th and reportedly only lost one week’s worth of work.

Lead times extend beyond 2 years for Toshiba IC components

Toshiba’s opto-isolators (TLP series) and IC drivers (TC series) are seeing deep shortages, with some distributors quoting 6 – 9-month lead times on average. The worst affected series are pushed out beyond 2 years. Similarly, Linear Technology and Renesas are seeing lead times extend and market prices rise. Renesas’ R5 and R7 series are currently receiving at least 52-week lead times.

Alternatively, market supply pressure is easing for Analog Devices ADUM series, as authorized distributors are releasing allocation. STMicro is also experiencing stability with Mosfets and Diodes lead times, which are around 6 months to a year, with distributors not predicting any major decommitments.

Shortages and economic pressure downsize expected outputs while increasing prices

Raw material shortages continue to increase STMicro production costs, leading to higher pricing. Due to these shortages, as well as inflation and global economic slowdown, STMicro has begun to downsize expected production outputs for home appliances and mobile divisions.

These factors are impacting production costs, particularly for STMicro Mosfets and Diodes, which could push pricing higher. Vishay’s High Voltage Power MOSFET (IRF-xxx series) and automotive grade items (SQ-xxx series) are under tight manufacturer stock allocation with little relief predicted for the coming year.

Conversely, Samsung, Micron and other franchised distributors have a high level of inventory stock and production output due to previous bookings. Computing products, including personal computers and laptops, are currently in a downtrend, thanks to a drop in demand from datacenters and customers receiving sufficient supply. This is predicted to decrease prices for DDR4, LPDDR and eMMC.

been an increase in demand from local PC DIY retailers. Overall, tier 1 GPU manufacturers have reduced prices roughly 5%.

 

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