China's DRAM spot prices have faced continued declines throughout November, with DDR4 particularly hard hit. In contrast, NAND flash prices have shown signs of stabilizing. Following 2-3 quarters of inventory adjustments, stock pressure has eased significantly. Manufacturers' tighter supply controls are expected to gradually restore restocking demand.
Amid challenges, Samsung has decided to scale back investments in its foundry business, prioritizing existing production lines to reduce losses and refocusing efforts on regaining competitiveness in memory technologies. However, with its foundry lagging in technical competitiveness and large-scale investments difficult to recoup, Donald Trump's re-election and speculations regarding spinning off Samsung's foundry unit or collaborating with Intel have further heightened interest in Samsung's future direction.
Powerchip Semiconductor Manufacturing Corporation (PSMC) announced on November 28 the launch of its Tongluo facility in Miaoli, central Taiwan, equipped with advanced interposer production and 3D wafer stacking capabilities. This new fab, with a monthly capacity of 40,000 12-inch wafers, positions PSMC to deliver high-margin 3D AI foundry services, enabling global clients to capitalize on the accelerating growth of the AI sector.
China's largest foundry operator, SMIC, surpassed the US$2 billion revenue mark for the first time in the third quarter of 2024. Meanwhile, companies like CXMT and JHICC are aggressively lowering DDR4 prices, making their products up to 50% cheaper than those from Samsung Electronics and SK Hynix.
Micron has intensified its recruitment efforts in South Korea, targeting university campuses with "on-the-spot hiring" initiatives. Previously focused on hiring experienced engineers from companies like Samsung Electronics, the company is now pivoting to fresh graduates amid a growing global talent shortage.
Memory module maker TeamGroup anticipates heightened demand for high-end memory products in the first quarter of 2025, with low-end memory demand expected to follow suit in the second quarter.
SK Hynix has reportedly begun mass production of its 321-layer 1Tb TLC 3D NAND Flash products, posing a potential threat to Samsung Electronics' (Samsung) leading position. This development is drawing significant attention from the market.
Samsung Electronics (Samsung) has implemented a significant personnel adjustment within its Device Solutions (DS) division to regain competitiveness in the semiconductor sector. This includes appointing the head of the foundry business unit and having the DS department head personally lead the memory business.
Nvidia is currently conducting high bandwidth memory (HBM) verification tests with Samsung Electronics (Samsung), with industry attention focused on the validation timeline and potential supply volumes.
Samsung Electronics has enacted changes to its management, including the appointment of a new chief technology officer (CTO) for its foundry operations.
While the US has not yet imposed sanctions on China's high-bandwidth memory (HBM) chips and manufacturing equipment, industry sources expect such restrictions are inevitable. This situation highlights the urgent need for local chip manufacturers in China to develop domestic memory capabilities to address the HBM technology gap.
SK Hynix and Samsung Electronics are focusing on upgrading equipment, transitioning processes, and expanding high-bandwidth memory (HBM) packaging capacity instead of investing in new equipment for 2025. This strategic approach aims to maintain their competitive advantage while managing supply-demand dynamics and pricing stability. However, increased DRAM production by Chinese competitors may challenge the success of this "natural attrition" strategy.
South Korean media report that SK Hynix and Samsung Electronics have reduced their reliance on China over the past seven quarters. SK Hynix's China revenue dropped from 30% to 24%, while Samsung's equipment assets in China fell from 8% to under 5%, signaling ongoing decoupling efforts among South Korea's semiconductor giants.
Jae-yong Lee, chairman of Samsung Electronics (Samsung), was indicted in September 2020 on charges related to illegal inheritance and management practices. He has faced judicial risks for nearly four years, coupled with recent deteriorating performance in Samsung's core semiconductor business and insufficient technological competitiveness, the company's crisis is more severe than ever.
Korean memory vendors intend to promote LPDDR5 as the prevalent specification, which will necessitate a reduction in the output of LPDDR4 and LPDDR4X chips, according to industry sources.
In 2024, Samsung Electronics and SK Hynix saw their US semiconductor revenue surge, driven by robust demand from AI-focused tech firms and data centers. This growth stemmed from increased sales of premium semiconductor products such as HBM and DDR5 modules.
During Nvidia's earnings call for the third quarter of fiscal year 2025, CEO Jensen Huang expressed gratitude to supply chain partners including TSMC and SK Hynix for their contribution to the next-generation Blackwell chips. However, Samsung Electronics (Samsung) was notably absent from this acknowledgment, sparking speculation about the availability of its HBM3E.
Elite Semiconductor Microelectronics Technology Inc. (ESMT) expected a rebound in the memory market in the second half of 2024, driving an increase in wafer production. However, demand recovery underperformed expectations, resulting in elevated inventory levels. The company is now prioritizing efforts to address these backlogs.
With the acceleration of Blackwell mass manufacturing, the capacity of HBM3E will greatly grow. According to industry estimates, after a twofold rise in HBM production in 2024, demand from AI servers will drive exponential growth in HBM output in 2025.
SSD sales have been buoyed by specifications upgrades, according to industry sources, while DRAM module sales have exhibited signs of weakness. In 2024, they predict that SSD sales will surpass those of DRAM modules.
SK Hynix's strategic focus on high-end NAND memory, coupled with rising AI-driven demand, is expected to push its annual market share above 20% in 2024, bringing it closer to industry leader Samsung Electronics.
Samsung Electronics is bolstering its HBM competitiveness through significant investments in advanced packaging. Upgrades are underway at its Cheonan facility in South Korea, and its Samsung Electronics Suzhou Semiconductor (SESS) plant in China is receiving new semiconductor production tools. According to Seoul Economic Daily and Businesskorea, Samsung secured contracts worth KRW20 billion (approx. US$14.32 million) in the third quarter of 2024 to drive this expansion.
Samsung Electronics will reportedly terminate its MLC NAND production by next year, shifting focus to high-capacity NAND production, according to industry sources.
Despite making progress in DDR5 power management IC (PMIC) development over the past two years, Taiwanese suppliers have seen limited revenue growth in this sector. This limitation stems from persistent market dominance by non-Taiwanese players and memory manufacturers' increasing focus on high-bandwidth memory (HBM) products.
