Market Intelligence
October 4, 2022

The Greensheet: September 2022

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CPU

Inflation and raw materials’ cost push prices higher 

Beginning October 2nd, 2022, Intel will increase pricing across all product lines. This is in reaction to rising inflation and raw material shortages that are driving up production costs. Customers looking to capitalize on lower prices prior to the price hike should review Q4 projects and take an inventory position prior to the effective date of October 2nd 

Here are the products and their upcoming price increases: 

INTEL PRODUCT (BU)  RICE EFFECTIVE DATE Q4’22 LIST PRICE INCREASE 
Xeon CPU & Chipset   October 2, 2022   Xeon SP: Bronze & Silver 5%, Platinum & Gold 7% - 10% Xeon D: 2-10% 
Xeon E: 5% 
Chipset: 7%  
Atom: 2:5% 
Client CPU& Chipset   October 2, 2022   Mobile SIPP Processors 0% (no increase)  
Other Core Processors 10% 
Pentium, Celeron and Atom 20% 
Workstation Xeon W 10% 
Client and Workstation PCH 10% 
NUC  October 2, 2022   Intel NUC (Core based) 3-9% 
INTEL NUC (Celeron/Pentium based) 2-20%

Uncertainty develops within the ethernet controller chipset market 

Within the past two months, Intel cancelled distributor backlog and issued instructions to reconfirm and resubmit demand forecasts. They did this to avoid double bookings and oversupply down the road. 

Additionally, most of Intel’s chipsets are manufactured in Taiwan, which may cause supply constraints if the tensions between China and Taiwan worsen. The market might already feel some effects in the form of delivery delays, as China continues to conduct military exercises around the country. 

Intel MPNs that are COO Taiwan include the following: 

  • WGI210AT SLJXR  
  • WGI210AT SLJXQ  
  • WGI210IT SLJXT  
  • WGI210IT SLJXS  
  • WGI210IS SLJXX  
  • WGI210IS SLJXW  
  • WGI210CS SLKKL   
  • WGI210CS SLKKM  
  • WGI211AT SLJXZ  
  • WGI211AT SLJXY  
  • WGI219LM SLKJ3  
  • WGI219LM SLKJ2  
  • WGI219V SLKJ5   
  • WGI219V SLKJ4  
 

 

Memory

Decreased demand leads to increased supply of memory modules 

A 3-5% price decrease was recently announced for memory modules as demand remains soft and massive project cancellations continue. Supply is improving, as used modules flood the open market, mostly because of the cryptocurrency market crash. Supply is expected to reach excess levels as crypto miners try to cash out mining machines, which will reduce pricing, if there is no uptick in demand. 

Manufacturers are still chasing numbers to hit respective targets and are pushing deals through special pricing, targeting customers looking for cost-saving opportunities.  

 

 

GPU

Price cuts up to 30% hint at a temporary market shift 

To clear on-hand inventory of the RTX 30s, distributors have slashed prices by 25-30% on the RTX 3090. This is likely due to decreased demand from the consumer market and a large wave of secondhand card availability from the crypto mining crash. 

This shift in price and stable supply is not expected to continue, as next generation GPUs are being released in Q4, which will lead to older models being discontinued. Unlike most manufacturers, Nvidia does not provide much advance notice to place last-time buys, so customers are encouraged to forecast demand and take advantage of the current climate, while pricing and supply are still favorable. 

Buyer’s market emerges for some MXC series, but MCX-6 supply sees little improvement 

Supply for MXC-4 and MCX-5 series is increasing, as server project cancellations push large OEM excess into the market. While this is creating a buyer’s market for individuals exploring cost savings opportunities, supply has yet to stabilize for the highly sought after MCX-6 series. This is unlikely to change until at least Q4. 

Mellanox cards have improved supply, and this has caused lead times for new booking orders to shrink from 32 weeks to about 20 weeks. Additionally, prices are declining slightly for Intel’s E810 series adapter cards, as market demand slows.  

However, shortages continue for I350T2V2, as well as X710 and XL710 models as open market supply is limited. 

 

Storage

Small cap supply remains tight and LCD transactions continue to drop 

Supply for Solidigm SATA SSD in small cap is still constrained, but market pricing is trending downwards by 10-15% as server market demand in China drops. A couple of notes on supply availability: 

  • Small caps (240GB and 480GB) supply in this quarter is almost nonexistent for S4510 series. 
  • S4510 and 960GB has some leftover stock from last quarter, but it is uncertain if supply will improve in Q3.  
  • S4610 480GB/960GB supply is also critically low from last quarter, but limited quantities are arriving on the market. 

For Samsung, there are ongoing conversations around price adjustments, but poor demand will likely push distributors to drop prices by 10-20%. 

The downturn of LCD demand for consumer products, including the popular 11.6” model, is triggering fewer transactions and more plentiful supply from manufacturers. Suppliers expect that this trend will continue through the rest of the year. 

 

IC

Demand for operational amplifiers rises as supply gaps increase 

The gap between supply and demand of operational amplifiers has grown more than 30%, consequently extending lead times, particularly within automotive-grade products. Demand has been driven by the following factors: 

  • Global need for sensors and transducers 
  • Broadened production within automotive segments 
  • Increased demand for battery-powered products 

Automotive grade parts are the most in demand, particularly IGBT components which now have lead times of over 50 weeks. Some of the major players in the global amplifier market are Texas Instruments, STMicro, onsemi, API Manufacturing, Analog Devices and NXP. 

Maxim amplifier products currently have 60-week lead times, with the MAX 40/44/96/99 remaining critically short. To focus on high-level business, Maxim is cutting small profit product manufacturing. There has been no news on how capacity is being affected by this, but if demand stays strong, there are rumors that Maxim will increase prices in September.  

In comparison, onsemi amplifiers have minimally better lead times, ranging from 6-52 weeks. TSX7-XXX precision amplifiers are on the higher end of that range, as shortages endure. Operational amplifier supply is stable, with only 6 weeks production time, while the TSB-XXX, TSV-XXX, LMV-XXX currently has no firm lead time. Precision amplifiers are also seeing price increases across the board. 

Texas Instruments seems to have the most stable amplifier supply, but demand is predicted to increase over the coming months, as customers look for alternatives with shorter lead times. 

Raw material shortages upset STMicro production  

STMicro is downsizing forecasts for home appliances and mobile divisions due to ongoing issues with raw material supply. Other contributing factors include inflation and global economic slowdown, which are affecting consumer behavior.  

If raw material shortages persist, prices will likely stay high, as production costs increase. 

Additionally, MOSFET and diode supply has normalized, with lead times of around 6 months to a year. As of now, distributors are not predicting any major decommitments on lead time deliveries.  

Global political instability and economic weakness deepen Analog Devices’ shortages 

Q4 outlooks for Analog Devices are not optimistic, as tensions between the United States and China continue to unfold. The global political instability and economic weakness have resulted in a shortage of the following series: 

  • AD82# 
  • ADM# 
  • AD5# 
  • ADJ7# 
  • AD8# 
  • AD9# 

Demand for commercial grade products has dipped slightly while industrial performance remains consistent. There are rumors that Analog Devices, along with Linear Tech and Maxim, will increase their prices, but no official announcement has been made, so it is unknown what percentage these price increases could be. 

Linear Technologies is still struggling with its family series, with limited support from manufacturers. This has made lead time delivery unstable and market pricing is likely- to keep rising. 

On a positive note, Analog Devices’ ADUM series is seeing steady market supply, partially thanks to authorized distributors slowly easing allocations and bringing more stock to the market.  

Production levels struggle while waiting for new facilities to come online 

The demands on automotive production continue to grow, further straining global production plants that lack the ability to source necessary chips for computerized vehicles. The scarcity of supply continues to have far-reaching repercussions; global passenger car output has yet to return to pre-pandemic levels.  

Larger chip manufacturers are investing and expanding manufacturing capacity, which may aid in recovery, but this will only affect future production levels and not the immediate gaps. It is expected that the global chip shortage will continue well into 2023, with an uncertain future. 

In memory chips, consumer mobile and PC DRAM demand has slowed, but server DRAM has stayed steady. The increased demand was caused by the surge of shipments received by manufacturers, a reported 5 – 10% increase in comparison to previous quarters. 

Related to manufacturing capacity, Samsung’s Korea facility has hit their max for the year and have announced a new plant will be opening to increase DRAM production in Q1 2023 for the 14 NM fab. Competitor SK Hynix followed suit by increasing production in its China Wuxi and Korean plants.  

At the start of 2022, Micron began planning to purchase new machinery to control/maintain wafer production. The 1alpha NM will be introduced to Micron’s Japan facility by the end of 2022. 

Shipments for DRAM consumers has declined for Taiwanese Nanya. This has negatively impacted revenue in comparison to other memory chip manufacturers.  

Similarly, Winbond’s revenue declined slightly by 3.3%. This is because of inventory corrections among networking customers and a suspension of supply from TV manufacturers. At present, Winbond's Kaohsiung plant will be entirely dedicated to 25S NM production. Mass production of the next-generation 20nm process is expected in mid-2023, which is expected to drive revenue growth.  effectively driving revenue growth.

 

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