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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The ramp-up of the Intel Ice Lake and AMD Milan processors is expected to not only propel growths in server shipment for two consecutive quarters from 2Q21 to 3Q21, but also drive up the share of high-density products in North American hyperscalers’ enterprise SSD purchases, according to TrendForce’s latest investigations. In China, procurement activities by domestic hyperscalers Alibaba and ByteDance are expected to increase on a quarterly basis as well. With the labor force gradually returning to physical offices, enterprises are now placing an increasing number of IT equipment orders, including servers, compared to 1H21. Hence, global enterprise SSD procurement capacity is expected to increase by 7% QoQ in 3Q21. Ongoing shortages in foundry capacities, however, have led to the supply of SSD components lagging behind demand. At the same time, enterprise SSD suppliers are aggressively raising the share of large-density products in their offerings in an attempt to optimize their product lines’ profitability. Taking account of these factors, TrendForce expects contract prices of enterprise SSDs to undergo a staggering 15% QoQ increase for 3Q21.
Looking ahead to 4Q21, TrendForce expects a decline in server shipment to bring about a corresponding downward correction in enterprise SSD procurement capacity. Meanwhile, clients will continue to validate higher-layer PCIe G4 products from Kixoia and Micron. On the other hand, as the shortage of SSD components becomes alleviated going forward, enterprise SSD suppliers’ production capacities will likely increase as well. As a result, enterprise SSD contract prices for 4Q21 will likely remain relatively unchanged from 3Q21 levels.
Suppliers are making a strong push to develop PCIe G5 and CXL products as these new interfaces become available for server applications next year
Intel and AMD are expected to kick off mass production of Eagle Stream and Genoa CPUs, respectively, in 1H22. In addition to being compatible with PCIe G5, these server processors will also support the CXL (Computer Express Link) interface. TrendForce’s investigations indicate that NAND Flash suppliers have been fast-tracking their production of PCIe G5 SSDs in response to the upcoming mass production of Eagle Stream. As such, these SSDs are likely to see market release between 2Q22 and 3Q22.
Micron, on the other hand, has also announced its development of CXL products. Because CXL enables optimized data transmission between CPU and other components, such as memory, GPU, ASIC, and FPGA, memory solutions with CXL interface are likely to experience rapid growth in the hyperscale market, which is constantly in pursuit of faster data transmission speeds. TrendForce believes that the release of increasingly fast data transmission interfaces will bring about a massive increase in the expenses and technological challenges associated with SSD controller IC development. Enterprise SSD suppliers will subsequently have to jostle for market share by leveraging their respective unique competitive advantages.
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
As the Taiwanese IPC (industrial PC) market suffered from deferred orders due to supply chain and logistical disruptions that took place in 1H20, total domestic IPC revenue for 1H20 reached NT$105.4 billion, a 4.7% YoY decrease, according to TrendForce’s latest investigations. However, given that the pandemic was gradually brought under control in 1H21, the market was able to benefit from strong demand from China’s 5G infrastructure rollout, as well as from expanded investments by Europe and the US in public infrastructures such as roads and railways aimed at facilitating an economic recovery. Hence, Taiwan’s IPC revenue for 1H21 reached NT$115.1 billion, a 9.2% YoY increase.
Regarding the financial performances of the top 10 IPC suppliers in Taiwan for 1H21, Ennoconn secured first place with a revenue of NT$42.95 billion, a 16.7% YoY increase. After its acquisition spree that began in 2010, Ennoconn is currently attempting to integrate its various subsidiaries’ technologies and resources in order to make headways in certain emerging technologies, including industrial automation, machine vision, HMI, and cloud services. Going forward, Ennoconn will cultivate its presence in the EV, smart healthcare, and smart retail sectors.
For 1H21, runner-up Advantech posted a revenue of NT$27.37 billion, an 8.2% YoY increase. While Advantech previously favored an acquisition-driven strategy, the company is now expanding into the smart healthcare, smart manufacturing, and smart city sectors primarily through technological partnerships and equity investments. Backed by its WISE-PaaS platform, Advantech continues to expand into the global markets by investing in overseas ISV (independent software vendors) and SI (systems integrators) in the aforementioned sectors.
DFI earned a third-place ranking in 1H21 with a revenue of NT$5.28 billion, a 25.2% YoY increase. After becoming part of the Qisda fleet in 2017, DFI subsequently went on to acquire telecom and information security solutions supplier AEWIN as well as industrial automation vendor Ace Pillar in 2019. These activities culminated in an annual revenue of NT$8.35 billion, an 18.8% YoY increase, for DFI in 2020. DFI currently specializes in smart manufacturing, smart healthcare, and intelligent transportation systems/infrastructures.
AI accelerator suppliers and IPC suppliers work in tandem to clearly define the AI value chain
IPC products have been widely used in AIoT and IIoT applications in recent years due to the proliferation of edge computing. As such, these products have also become the key determinant of how rapidly industries can adopt AI technologies such as machine vision. At the same time, IPC suppliers’ unique position in the mid-stream AI value chain means they are responsible for bridging the gap between upstream AI accelerator suppliers (including Intel, AMD, and Nvidia) and downstream ISV/SI.
With regards to the upstream AI value chain, Intel and AMD acquired independent FPGA suppliers Altera and Xilinx, respectively, in order to achieve more comprehensive heterogeneous computing competencies via horizontal integration. On the other hand, midstream IPC suppliers have been vertically integrating with downstream ISV/SI either independently or collectively through JVs, technological collaborations, strategic alliances, or M&A. For instance, Advantech and ADLINK are now operating on multi-strategy models as well as strategic collaboration models respectively, while Ennoconn and DFI are operating on M&A-oriented models.
On the whole, TrendForce expects that, as AI accelerator suppliers and IPC suppliers push integration forward in the AI value chain, not only will an increasing number of IPC products based on heterogeneous computing platforms be released to market, but emerging AI technologies such as machine vision will also see increased penetration in industrial automation applications. Hence, TrendForce expects annual machine vision revenue to reach US$86 billion in 2025.
In recent years, notebook computer (laptop) brands and processor suppliers alike have been actively adjusting their product strategies and business operations in response to behavioral shifts in the way consumers purchase and use computing devices. While notebook brands jostle for superiority in industrial design with improvements to their product appearances every year, competition in the processor industry has been even fiercer. TrendForce’s investigations indicate that the current competitive landscape in the processor industry consists of three developments, indicated below:
First, competition between AMD and Intel. Not only are both companies focused on expanding their respective ecosystems, but they have also been aiming to conquer the gaming market by releasing new products aimed at gamers this year. Apart from making headways in the PC processor market, AMD has introduced the AMD Advantage Design Framework.
AMD Advantage gaming notebooks are certified to meet standards of performance set by the company. AMD hopes that this certification system will allow it to generate a more consolidated gaming ecosystem while raising its brand equity. Intel, on the other hand, has been cultivating its presence in the creator and 5G notebook markets in an attempt to become the primary driver of digital transformation in the post-pandemic era.
Second, the Nvidia-Arm collaboration. This collaboration took place for the purpose of establishing an AI-enabled reference platform for notebook computers. More specifically, Arm’s CPU/NPU/GPU product stack delivers such wide-ranging AI solutions as real-time recognition, vibration detection, and keyword spotting. Following Arm’s successful foray into the PC segment, Nvidia will speed up its release of notebook products, including CPUs based on the Arm architecture.
Third, Qualcomm’s cross-sector ambitions. By architecting always connected notebooks* with Microsoft and Google, Qualcomm is now leveraging its advantages in 5G technology to prepare for upcoming competition with Intel in the 5G services market.
As the aforementioned companies’ presentations at Computex 2021 would suggest, not only do these processor suppliers possess their own competitive technological advantages, but they also share the common goal of upgrading their gaming competencies, including graphics cards, graphics technologies, and cooling performances.
Some of their current offerings aimed at the gaming market include the AMD RX 6000M, Nvidia RTX 3080 Ti/RTX 3070 Ti GPU, and Intel 11th Gen Core H45. Interestingly, the AMD Advantage Design Framework, which certifies OEMs’ gaming notebooks based on the AMD platform, represents the company’s intention to challenge Nvidia’s dominance in the gaming market.
After Nvidia announced its US$40 billion acquisition of Arm last September, the partnership is expected to yield considerable technological synergies by way of the two companies’ AI collaboration. TrendForce believes that, in the long term, Arm Cortex CPUs based on the Armv9 architecture will allow Nvidia to break free from the dominance of Intel and AMD in the notebook CPU market. In particular, Nvidia will be able to cultivate its presence in the high-performance notebook market by combining its existing graphics technology with Arm Cortex CPUs.
Qualcomm’s main impetus for entering the notebook market can be attributed to the fact that the pandemic has brought about a new normal in which consumer adherence to notebook products has become increasingly strong. On the whole, Qualcomm’s cross-sector ambition appears to be on the cusp of victory, given the company’s preexisting 5G competencies and its experience in always-connected applications, advanced camera technologies, immersive audio/visual and display experiences, AI acceleration, and power efficiency for smartphones. As a case in point, Qualcomm is set to release Windows on Snapdragon notebooks as its own 5G *always connected PC platform.
It should be noted that Intel has also adopted MediaTek’s 5G chip technology in 5G connected notebooks featuring “Intel 5G Solution 5000”. On the other hand, Qualcomm is also developing mobile processors aimed at the entry-level always connected 4G/5G notebook market. TrendForce expects competition in the always connected market to generate a fresh wave of replacement demand in the mobile computing market.
*Always connected laptops (notebooks): notebooks that feature modem chips and have a constant internet connection much like smartphones. These notebooks can connect to the internet using 4G/5G networks without the need for Wi-Fi.
The rise of such products as automotive, industrial, telecom, and networking chips in recent years has resulted in continued advancements in packaging and testing technologies, and the market revenue of these technologies has seen a corresponding rise as well. Demand for advanced packaging has been relatively strong thanks to high demand for 5G smartphones, consumer electronics, and high-performance processors.
In particular, the mainstream development of advanced packaging and testing is currently concentrated on three major fields: HPC chip packaging（2.5D/3D）, FOPLP（fan out panel level packaging）, and SiP（system in package）. Some of the other factors driving forward the technological development of advanced packaging also include improvements in end product functions, advancements in transistor gate sizes, reduction in advanced packaging L/S, and migration of chip interconnect technology from micro-bumping to hybrid bond.
According to TrendForce’s investigations, the advanced packaging market last year reached a revenue of US$31.037 billion in 2020（which was a 13% increase YoY）and accounted for 45.8% of the total packaging market. At the moment, most packaging and testing companies have successively entered the advanced packaging market, with Flip Chip applications accounting for the majority of applications across smartphone AP, WiFi chips, entry-level processors, and high-end PMICs. Flip Chip applications make up more than 80% of the total advanced packaging revenue.
In spite of continued growth, advanced packaging will unlikely overtake traditional packaging in terms of market share within 5-10 years
In spite of the multitude of companies that are eager to enter the advanced packaging industry, not all of them possess the technological competence to progress in R&D, thus making acquisition the fastest path to advanced packaging success. With regards to technological competence, foundries and IDMs are the likeliest candidates to enter the industry, as they already possess ample experience in chip development.
At the moment, TSMC, Intel, and Samsung are the most well-equipped to do so, respectively. With regards to outsourced operations, Taiwanese companies such as ASE, SPIL, and PTI lead the industry in terms of packaging technologies, while U.S.-based Amkor is able to compete for neck-and-neck with ASE. Although these aforementioned companies are not specialists in chip fabrication, they have an extremely strong grasp of the downstream assembly ecosystem, hence their superiority in advanced packaging.
On the other hand, thanks to China’s Big Fund, the trinity of Chinese packaging and testing operators（JCET, TFME, and Hua Tian）were able to acquire major global players, including STATS ChipPac, AMD-SUZ, and Malaysia-based Unisem, respectively, during the 2014-2019 period.
Hence, not only have the Chinese trio been able to raise their market shares and rankings in the global packaging and testing market, but they have also been able to acquire certain competencies in advanced packaging technologies.
The current market would seem to suggest that advanced packaging has been gradually cannibalizing the market share of traditional packaging. However, as applications including home appliances and automotive electronics still require traditional packaging, TrendForce believes that only after 5-10 years will advanced packaging overtake traditional packaging in terms of market share.