CPU market expecting a demand surge in Late March/Early April
OEMs, EMS and Distributors have all started resuming business in China. We are hearing that the work force currently stands at 50% – 60% with a 10% increase weekly. We are expecting market activity to increase within the next 3-6 weeks. As companies get back to full capacity they will start pulling in their allocation from Intel and local distributors that has been frozen. Since Intel has yet to solve their 14nm production issue, the current increase in available supply will quickly diminish. Although there has been some recent price relief, worldwide Distributors and OEMs that we are working with have stated that they are not seeing full allocation grants for product for March and April.
Samsung and Hynix China fabs not affected by COVID 19
DRAM and NAND plants in China, such as Samsung Xi’an fab, SK Hynix Wuxi fab, are not affected by the outbreak, since semiconductor fabs are automated and have a very low requirement for manpower. In addition, companies stocked up on materials before Chinese New Year, enough to avoid shortages in the short term. As long as additional materials that need to be imported can pass through customs as usual, the outbreak should not cause any problems for the DRAM and NAND flash industry. All semiconductor fabs in China hold national special licenses, which allow them to ship their products throughout China, even to cities that are under quarantine. From a global perspective, memory product suppliers do not reduce their manufacturing operations unless a global systems-wide risk were to occur. Furthermore, as client-side inventories are still showing shortages, the purchasing momentum of memory products will continue to hold up despite problems of labor and material shortages faced by downstream clients. Expect DRAM pricing to trend upwards with the amount of uncertainty happening right now in spite of the outbreak.
DRAM Pricing expecting a continued upward trend
Expect DRAM pricing to trend upwards with the amount of uncertainty happening right now. Over the past 1-2 weeks we have seen large quantities of Samsung & Micron DRAM being bought, especially in the China market. Specifically 4G/2G DDR3/DDR4 were extremely active and witnessed a 10-15% increase. As more and more factories come back online we will see increased demand and consumption.
Data Center consumption continues to drive up pricing on SSD
The seemingly endless need for data storage is causing continued strain on supply in the market. Although Samsung did not have any production issues due to COVID-19, they are still having trouble keeping up with demand even at full capacity. Since the beginning of the year the market has seen pricing jump in the 20% range with no sign of any short terms solution. Using the mainline PM883 as a barometer we can illustrate the price increase.
- January 2020 ~$135.00-140.00
- March 2020 ~ $165.00 – 170.00
- Similar increases have been noted on Intel S4510 and S4610
Yageo raising pricing on chip resistors by 70%
According to previous reports, Yageo had originally planned to increase the price of MLCC by 30%, but the recent impact of the COVID-19 pandemic has caused the actual output of global passive component factories to be lower than expected, and also affected the output of chip resistors. Therefore, Yageo adjusted its plan and will increase the price of MLCC by 50% and the price of chip resistors by 70%, which will take effect in March.
In addition, Yageo’s global low-end MLCC market share is about 30%, and chip resistors have a global market share of 34%. Therefore, Yageo’s production capacity will also affect the global MLCC and chip resistor supply and price.