The current state of the notebook panel market shows that prices of notebook panels are likely to follow the same trend set by TV panels and monitor panels in 4Q21. In other words, notebook panels may see their prices plummet from the previous uptrend during the quarter.
Notebook brands are confident that a wave of demand for commercial notebooks will take the place of the prior demand for consumer notebooks. Objectively speaking, however, as soon as enterprises return to pre-pandemic business operations, they are unlikely to immediately spend a considerable amount of their budget on refreshing their existing hardware, including notebook computers.
On the other hand, although consumer purchases comprised most WFH demand for notebooks within the past year, these notebooks were purchased with subsidies funded by the buyers’ workplaces. Once consumers return to physical offices for work following the termination of WFH, their purchased notebooks will then be returned to the workplaces as well. Hence, notebook brands which previously anticipated an upcoming wave of replacement demand for business notebooks may be overly optimistic in their expectations. As such, although notebook shipment has remained bullish in 3Q21, notebook sales are likely to gradually slow down going forward, meaning notebook vendors and brands alike may enter into a key period of inventory adjustment in 4Q21. At the same time, notebook manufacturers will also decelerate their procurement activities for panels across their entire range of notebook computers.
The four largest notebook panel suppliers still exert significant influence over the market’s overall supply of notebook panels, although newcomer HKC is not to be underestimated in terms of its potential to do the same, even pertaining to quotes. While HKC did not ship a single notebook panel in 2020, the company has ambitiously targeted an annual shipment of 10 million units this year in light of the expanded production capacity for IPS panels at its Mianyang fab. In 1H21, however, the display industry suffered a severe shortage of driver ICs, whose manufacturers first sought to ensure a steady supply of driver ICs for their more established clients. Being a notebook panel supplier that had had no business foundation, HKC, as was typical of such upstart companies, had its supply of driver ICs accordingly “adjusted” by driver IC suppliers. HKC was hence unable to effectively raise its shipment for 1H21.
As the demand for panels from various end-product segments slows down in 2H21, the shortage situation of driver ICs is also expected to either lessen somewhat or even turn into a supply-demand equilibrium. As such, HKC is likely to procure more driver ICs from its suppliers and subsequently step up its notebook panel shipment to 3.5 million units in 3Q21 and 4 million units in 4Q21. HKC’s increase in panel shipment for 2H21, if proven successful, will place downward pressure on notebook panel prices, thereby weakening said prices going forward.
TrendForce believes that 11.6-inch panels, the market for which has been relatively bearish, will most likely experience a decline in quotes starting in early 4Q21. At this size, even Full HD/IPS products, quotes for which have been relatively high in 3Q21, are likely to see their quotes hold flat in November 2021 and experience a sudden downward pressure on prices at the end of the year. Should the COVID-19 pandemic be brought under control on a global scale, demand for consumer electronics would likely return to its cyclical downturn in 1Q22, and the notebook panel market, despite its relatively robust supply chain, would see a more severe overall price accordingly.
Shipment of curved monitors for 1H21 was constrained by the shortage of such components as panels and scaler ICs, according to TrendForce’s latest investigations. As countries begin to lift pandemic-related restrictions following increased vaccinations in Europe and the US in 2H21, consumer demand generated by the stay-at-home economy has undergone a noticeable slowdown as well. Taking these factors into account, TrendForce, therefore, expects annual curved monitor shipment for 2021 to reach about 15.6 million units, a 10% YoY increase.
TrendForce finds that curved monitor shipment for 2Q21 reached about 3.41 million units, a 6.1% QoQ decrease. Samsung once again took a leadership position with a quarterly shipment of 1.09 million units and a 32% market share. Coming in second place was AOC/Philips, which posted a 12% market share with a shipment of 410,000 units. Finally, MSI and Dell each took third place and fourth place with 10% and 8% in market share, respectively.
It should be pointed out that, SDC, the largest supplier of curved monitor panels last year, reduced their production of LCD monitor panels considerably in 1H21. As a result, brands which had heavily relied on SDC’s panel supply, including Samsung Electronics, AOC/Philips, HP, and HKC, experienced QoQ declines of 21%, 36%, 64%, and 32%, respectively, in their shipments of curved monitors for 2Q21.
Conversely, LGE, Acer, and Dell saw QoQ increases of 110%, 47%, and 38%, respectively, in their curved monitor shipment for 2Q21 against the market downtrend. These companies’ growths can be attributed to the fact that they did not adopt SDC panels for most of the models in their curved monitor lineups while SDC was the predominant supplier of curved monitor panels. LGE, in particular, did not procure panels from SDC at all. Instead, these aforementioned companies have mostly been sourcing panels from AUO or CSOT for their newly released curved monitors, meaning they will be relatively unaffected by SDC’s shuttering going forward.
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The iPhone 13 series, which is about to be formally announced by Apple, has already had its exterior design speculated on by various media outlets and fans alike. TrendForce’s latest investigations indicate that some of the notable hardware upgrades of the iPhone 13 pertain to the SoC (manufactured at the 5nm+ node, which enables improved performance and decreased power consumption), display, and camera. In addition, iPhone handsets featuring support for 5G mmWave will be available for sale in more countries after the release of iPhone 13.
The iPhone 13 will see a shift in its charging circuit board from the previous rigid-flex PCB design to a new design featuring SiP combined with flexible PCB. The space-saving feature of this new design will also likely result in increased battery capacity. As for retail prices, the iPhone 13 series is expected to remain similar to the iPhone 12 series assuming Apple is able to effectively control manufacturing costs, since the latest models do not come with significant hardware upgrades. As a result of this aggressive pricing scheme, iPhone shipment will likely maintain its growth trajectory for two consecutive years.
Huawei’s plight led to Apple’s rising market share in the Greater China region
Owing to heavy competition from Chinese brands, sales in the Greater China region accounted for a decreasing share of Apple’s iPhone revenue, from 19.44% in 2017 down to merely 16.33% in 2020. Nevertheless, this downtrend has been gradually reversing since 4Q20, primarily because of increased sanctions against Huawei.As Huawei was cut off from its chip supply in 4Q20, shipment of Huawei smartphones underwent a massive decline accordingly, in turn leaving vacancies in the flagship smartphone market in China. At the same time, while Apple released its new iPhone 12 models, flagship smartphone buyers in China began purchasing iPhones instead. Thanks to this shift, sales in the Greater China region began accounting for a growing share of Apple’s iPhone revenue, from 14.8% up to 19.13% in 4Q20. Since 4Q20, this figure has remained above 18% for three consecutive quarters.
Prior to being sanctioned by the US government, Huawei had enjoyed the highest market share in the high-end smartphone segment in China. After the sanctions were put into place, this segment then became highly sought after by other smartphone brands. However, because other Chinese brands had not previously placed significant emphasis on the high-end market, the iPhone was able to seize most of the market share in the high-end segment left in Huawei’s wake. Furthermore, although other Chinese smartphone brands have started developing their respective flagship models, it takes considerable time to build up their brand images in this segment and attract customers. TrendForce therefore believes that the iPhone will continue to dominate the high-end smartphone market in China for the next two to three years.
iPhones are expected to account for 16.7% of global smartphone shipment in 2021
An overview of iPhone shipments for the past few years shows that iPhone shipment went into a nosedive starting in 4Q18 because the iPhone XS/XR series featured limited improvements yet a significant price hike over its iPhone 8/X predecessor. Alarmed by this decline, Apple immediately revamped its sales strategy for the next-gen iPhone 11, which not only underwent a total overhaul in terms of specs but also experienced a price cut of US$50 for the entry-level model (the Pro model retained its previous-gen equivalent’s price). Apple subsequently released the brand-new iPhone SE in 2020, thereby reversing the downward trajectory of iPhone shipment as a result.
New iPhones saw a deferred released schedule in 2020 owing to the impact of the COVID-19 pandemic, which led to a 14% YoY decrease in iPhone shipment for 3Q20. However, as the new iPhone 12 models equipped with across-the-board hardware upgrades, including 5G functionality, were released in 4Q20, iPhone shipment saw a massive rebound during the quarter and reached a 12% YoY increase in 4Q20 and a further increase of 42% YoY in 1Q21.
Looking ahead to the shipment volumes of the new iPhone models for 2H21, TrendForce expects Apple to maintain its aggressive pricing strategy in order to boost shipment. In addition, as the iPhone 13 series will once again return to a September release, total iPhone shipment is expected to undergo a 30% YoY increase in 3Q21, but a 5% YoY decrease in 4Q21. As such, iPhone sales for 2H21 will likely surpass 2H20 figures. For 2021, iPhones are expected to account for 16.7% of all smartphone shipment, which is a step-up compared to last year.
While the server industry transitions to the latest generation of processors based on the x86 platform, the Intel Ice Lake and AMD Milan CPUs entered mass production earlier this year and were shipped to certain customers, such as North American CSPs and telecommunication companies, at a low volume in 1Q21, according to TrendForce’s latest investigations.
These processors are expected to begin seeing widespread adoption in the server market in 3Q21. TrendForce believes that Ice Lake represents a step-up in computing performance from the previous generation due to its higher scalability and support for more memory channels. On the other hand, the new normal that emerged in the post-pandemic era is expected to drive clients in the server sector to partially migrate to the Ice Lake platform, whose share in the server market is expected to surpass 30% in 4Q21.
Volume ramp of CPUs based on the Eagle Stream platform will likely take place in 2Q22, while AMD is expected to reach a 15% share in the server market next year
Regarding the mass production schedule of Intel CPUs based on the next-gen Eagle Stream platform, volume ramp is expected to occur in 2Q22. These processors, which feature embedded HBM, comprise a much more diverse product lineup compared to the previous generation. Although Intel’s 2Q22 target represents a slight delay from the market’s previous expectation of a 4Q21 ramp-up, Eagle Stream CPUs will enter the final product qualification stage at the end of 4Q21, after which Intel will begin provisioning certain leading customers with a small batch of these CPUs in 1Q22, according to TrendForce’s survey of server ODMs. As such, the mass production schedule of Sapphire Rapids will likely resemble the release of Ice Lake server processors earlier this year.
Genoa CPUs, AMD’s competitive equivalent of the Intel Eagle Stream, are expected to enter mass production on a similar schedule, since AMD’s wafer starts at the 5nm node have been relatively low-volume. AMD’s server processors manufactured at the 14nm node and below have the competitive advantage in terms of price-to-performance, core count, and interface support.
Furthermore, after progressing to the 7nm node, these processors have been seeing gradually increased adoption by various public cloud service providers, including Google Cloud Platform, Microsoft Azure, and Tencent, throughout 2021. AMD CPUs have currently surpassed a 10% penetration rate in these three CSPs’ servers. Going forward, AMD will begin inputting wafers at the 5nm node at the end of 2021 in order to further optimize its processors’ cost, power consumption, and performance. TrendForce therefore expects AMD CPUs to reach a 15% share in the global server market in 2022.
While the ARM architecture is starting to gain popularity, ARM chips are mostly built-to-order due to the relatively small scale of client demand
Processors based on the ARM architecture began seeing increased market penetration this year, with AWS’ self-designed Graviton chips enjoying the greatest market share. In addition, Ampere and Marvell have also been releasing more agile and flexible ARM-based server processors, validation for which by CSPs is expected to kick off in 4Q21. The server market, however, is still dominated by x86 processors, which currently account for 97% of total server processor shipments.
In particular, AMD has transitioned most of its server offerings to processors manufactured at the 7nm and 7nm+ nodes by increasing wafer inputs at these nodes and replacing its old 14nm product lineups. This transition has paid off, as some of AMD’s clients have gradually become receptive to these new products. On the other hand, ARM- and RISC-based processors are currently built to order, mostly for the data center market. TrendForce therefore believes that ARM CPUs will not be competitive with x86 CPUs in the server market before 2023.
Support will extend to include PCIe G5 and DDR5 RDIMM, while CXL will improve memory performance
It should be noted that Intel as the dominant leader in the market for x86 server CPUs has decided to have Eagle Stream support CXL (Compute Express Link). This interface further optimizes the memory coherence between the CPU and the memory components to which the CPU is connected. The processor platform thus has the ultimate function of establishing a memory pool for all computing units within the server through memory virtualization, even though this function is not notably emphasized in the initial establishment of the product specifications, which originally sought to enable high-bandwidth and low-latency data transfer for the CPU.
The memory pool, in turn, enhances the interconnections (or the data transfer efficiency) among the CPU, memory, GPU, ASIC, FPGA, etc. The new CXL interface will be able to offer significant improvements in terms of dealing with heavier workload in the future and conducting heterogeneous computing. Moreover, CXL will be able to overcome the limits imposed on the current hardware architecture with respect to data transfer and thereby enable more effective integrated computing capability.
The build-out of data centers continues to grow because of the emergence of applications related to AI and Big Data. Furthermore, the demand for larger cloud storage capacity has massively expanded as a result of enterprises’ increasingly rapid digital transformation efforts in the post-pandemic world. At the same time, with the increase in CPU core count, how to raise computing performance via memory optimization has now become an important issue. Eagle Stream can resolve this bottleneck by extending support to PCIe G5 for the SSD interface technology.
Compared with its predecessor, PCIe G5 offers twice the data transfer rate. Therefore, hyperscalers are eager to adopt SSDs based on this standard. As for DRAM, both Eagle Stream and Genoa extend support to the next-generation DDR5 server DRAM, which delivers a faster data transfer rate, making these new server CPUs superior to Ice Lake in all respects. NAND Flash and DRAM suppliers have made plans to commence mass production of PCIe G5 SSDs and DDR5 RDIMMs at the end of 2Q22 in anticipation of demand generated by the release of the Eagle Stream and Genoa platforms for these next-gen products.
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Suppliers and clients in the server DRAM market are still having difficulty in reaching agreements on prices for 3Q21 contracts even though the quarter is well underway, according to TrendForce’s latest investigations. Hence, server DRAM contract prices are much more varied than before. Regarding the price trend in July, contract quotes for the mainstream 32GB RDIMMs rose by 5-7% MoM.
However, the price hikes have led to a reduction in demand, and there are indications that server DRAM sales bits will register some decline for 3Q21. The release of server CPUs based on the new platforms is driving the procurement of higher-density 64GB RDIMMs, but this has not resulted in a significant corresponding increase in content per unit. The general trend for buyers is to replace two 32GB modules with one 64GB module, rather than a one-to-one replacement as DRAM suppliers previously expected. Contract prices of 64GB RDIMMs rose by 5-7% MoM for July, though prices were below this range for some transactions.
TrendForce’s analysis shows that server DRAM suppliers and buyers are finding it difficult to reach a consensus on prices because DRAM suppliers expect that the demand for server DRAM modules is going to surge in 3Q21 as the third quarter is the traditional peak season for the server market. As well, suppliers also anticipate that the adoption of new server processor platforms will increase the memory content in servers.
With a more optimistic demand outlook, suppliers have adjusted their product mixes to allocate more of their production capacity to server DRAM. Hence, the supply fulfillment rate has risen significantly in the server DRAM market in 3Q21. Server DRAM buyers, on the other hand, already have a high level of inventory. Clients in the data center segment were aggressively stockpiling during the first half of this year due to worries about the impact of the COVID-19 pandemic on the supply chain. They now need some time to consume their inventories and are reluctant to procure more DRAM modules.
Contract prices will be constrained to rise further in 4Q21 as demand side has turned conservative
Currently, enterprise server OEMs in North America have finished arranging their quarterly contracts, whereas numerous cloud service providers and Chinese enterprise server OEMs are still in the midst of negotiations. TrendForce believes that, in order to reach their targets for sales and shipments, server DRAM suppliers may be willing to cut more “special deals” for server DRAM products in August. Specifically, suppliers will push for lock-in contracts that offer adjustable prices for fixed quantities.
On the whole, the general behaviors of DRAM buyers with regards to procurement have changed noticeably form the first half of this year. As the demand related to servers, PCs, and other major applications slows down, the whole DRAM market will gradually shift to the state of oversupply. Since the DRAM market is an oligopoly, the major suppliers will still have significant leverage in price negotiations. Quotes for server DRAM products could therefore rise further by 5-10% QoQ in 3Q21. However, given that prices have yet to be finalized for a substantial portion of 3Q21 contracts, the transaction volume is also very limited. This, in turn, will inevitably create a lot of uncertainties with respect to the price trend in 4Q21.
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms. Latte Chung from the Sales Department at firstname.lastname@example.org