Chip Spot Market Analysis — UniBetter April 2024 Edition

Published on: April 29, 2024

From January to March 2024, there has been a slow and steady upward trend, and the market's expectations for April have naturally increased. Perhaps it was the Qingming solar term that added a touch of sadness, or perhaps it was because all the flowers that should have bloomed had already done so in March. Overall, the performance in April was not surprising and remained at about the same level as in March. This is in line with the traditional trends of the electronics industry. However, after more than a year of continuous decline in the electronics industry, the market's desire for recovery is growing stronger, and no change represents disappointment. But I believe this trend will be the norm for some time to come. We should adopt a down-to-earth attitude, correctly view the industry's profit model and the normal changes in the market, and provide quality service every time. The market always belongs to those with high quality who can provide high-quality services.

Manufacturer Updates

Texas Instruments (TI)

Texas Instruments (TI) brand announced the financial report for the first quarter of the fiscal year 2024, with revenue of 3.66billion, adecreaseof101.11 billion, a decrease of 35% year-on-year. Among them, analog revenue decreased by 14% year-on-year, embedded processing revenue decreased by 22%, and other departments decreased by 33% year-on-year. This trend was originally in line with TI’s expectations. For the Chinese market that was originally lost, TI is preparing to regain market share through price reductions. The gross margin red line was adjusted from the initial 60% to the current 40%, and the shipment pressure in the entire Q1 was relatively high. After a trial operation in Q1, the overall mechanism has been running smoothly. Analysts predict that TI’s Q2 shipments should have a slight increase compared to Q1, so the overall shipment pressure in Q2 will not be too great. TI will also adopt some tightening price control measures, especially in the field of analog chips, because of their growing momentum, which leads the original factory to further raise the price red line. Customers can place orders early.

SeriesCurrent Lead TimeLead Time Trend
PMIC(UCCx、TPSx、LMRx、TLx)6-8 WEEKSsignificantly shortened.
DSP(TMS320x)6-30 WEEKSsome models have longer lead times while most have significantly shortened.
Data Converters(DACx、ADCx、ADSx)6-12 WEEKSstable
MCU and Processors(MSP430x、SMx)6-16 WEEKSmost models return to 6 weeks.
Logic ICs(SN74XX、SN54XX、CD4x、74Ax)6-12 WEEKSstable
SeriesCurrent Lead TimeLead Time Trend
Interface Isolation ICs(ADMx、ADUMx、ADGx)13-15 WEEKSbasically returned to normal
Amplifier ICs(ADA4x、ADLx、AD8x)12-31 WEEKSaverage reduction of 3-5 weeks
Linear Products(ADRx、LT10x、16x、66x、67x)15-28 WEEKSsigns of lengthening
MAXIM Products10-36 WEEKSsome products have extended lead times

ADI Brand

Since the price increase began in February, the communication of pricing data to the outside world has not been effectively conveyed, leading to high communication costs and slow efficiency, which has negatively impacted customer experience. Additionally, with the integration of data from Maxim, there has been a significant impact on shipments. Many approval processes have been severely affected, slowing down the shipping speed. As a result, ADI’s lead times have been delayed by at least 4-6 weeks from the original schedule.

Xilinx (XILINX)

Since the announcement of the discontinuation of some models, there has been a slight increase in orders from the original factory. Currently, XILINX’s strategy remains conservative, focusing mainly on price control and the rational use of existing production capacity. Therefore, overall changes in XILINX will be relatively small. Moreover, after being acquired by AMD, the agency rights and data integration are slowly taking place, which will have a certain impact on the overall supply chain structure, but the overall impact is not significant.

SeriesCurrent Lead TimeLead Time Trend
FPGA 16nm AU\KU\VU(XCAU7P、KU5P、VU3P)12-35 WEEKSreturning to normal
FPGA 20nm KU\VU(XCKU035、065)12-48 WEEKSmost still require a 40-week lead time
FPGA 28nm 7 Series(XC7S\7A\7K\7V)12-30 WEEKSreturning to normal
FPGA 45nm 6S Series(XC6S)17-50 WEEKSsome models have eased
SoC(XC7Z\ZU)20-48 WEEKSbasically returned to normal
SeriesCurrent Lead TimeLead Time Trend
Traditional 16-bit MCU(S912x)13-25 WEEKSfurther shortened
Traditional 32-bit MCU(MK64x、MK70x)18-54 WEEKSunstable lead times
General-purpose MCU(LPC17x)13-50 WEEKSfurther shortened
Automotive MCU(MP5x、FS32x、MCFx)36-54 WEEKSno significant change
Interface ICs(TJAx)12-16 WEEKSbasically returned to normal

NXP (NXP)

The market inventory remains high, with a large amount of stockpiling in the agent market. The most abundant stock is in interface chips, and the price inversion is also very serious. NXP currently has no aggressive policies; it still adopts conservative control policies. Some production lines with minimal demand are considering stopping production and other related matters. NXP’s focus is currently on the automotive field, and its production capacity is also tilting towards this area. Non-automotive field products may face a decline in product quality or service or potential discontinuation.

SeriesCurrent Lead TimeLead Time Trend
8-bit MCU(PIC16x、AT89x、ATMEGA25x)6-12 WEEKSbasically normal
16-bit MCU(PIC24x、DSPIC3x)6-30 WEEKSsome models have significantly shortened
32-bit MCU(ATSAMA5x、PIC32x)4-14 WEEKSmost lead times shortened, a few models still have long lead times.
Ethernet Switch ICs(KSZ9x、LAN8x)4-24 WEEKSlead times shortened
Interface ICs(MCP2x)4-24 WEEKSlead times shortened
EEPROM(AT24x、24LCx)4-24 WEEKSlead times shortened

Microchip (MICROCHIP)

Due to a wide range of production lines, expedited fees were previously required for shipments, which has now been lifted for most products, allowing for normal delivery. However, the lead times are still relatively long compared to other brands, with an average lead time of over 20 weeks. Some general-purpose products have a large inventory and no lead time pressure. MICROCHIP has a wide range of products and production lines. Some production lines have stopped working due to low order volumes that do not meet MOQ (Minimum Order Quantity) requirements, and they are currently in a state of order shortage. As a result, the customer experience is relatively poor. For MICROCHIP, there is a need to make choices regarding capacity and production lines. The chip markets that are currently booming, such as automotive, AI, and new energy fields, may be the main focus of its capacity. In April, it also acquired two companies, one mainly focused on in-vehicle networking products to expand its share in the automotive field, and the other mainly assisting the AI market with FPGA products.

Storage Devices

Taiwan has always been a crucial core area in the semiconductor supply chain. The earthquake in Hualien, Taiwan, in April had a significant impact on the storage industry. Many original manufacturers have suspended quoting, with DRAM being the most affected, and prices are expected to rise. The impact on NAND flash is currently not significant, with shipments remaining normal. However, since the memory manufacturers announced production cuts, the overall market effect should be relatively positive. It remains to be seen whether other manufacturers will follow suit with production cuts. In line with the trend of reduced production and price increases, hard disk manufacturers such as Western Digital and Seagate Technology announced price increases in April, stating that they will immediately raise prices for new orders and demand exceeding previously committed quantities. In addition, storage manufacturers such as Samsung and Hynix are actively discussing with TSMC to potentially use TSMC’s 7nm process for their foundational wafers.

MCU and Diode Connectors

Currently facing the test of domestication. The domestic market in this segment is relatively stable, with no significant changes. European and American original manufacturers are not making significant moves to compete for the Chinese market. Overall, domestic products are in a state of steady growth, and there is an expectation that domestic brands will enter the global stage in the future.

Market Trends

The market in April was unusually calm, with demand decreasing to some extent compared to March. Traditionally, March might be the procurement peak season. Although the growth in March 2024 was not satisfactory, it was still slowly recovering. After entering April, the market demand was noticeably reduced, and the willingness of customers to purchase further decreased, which was another heavy blow to the market. Overall, market confidence was not as strong as in March.

ADI Brand

For linear products such as LT, since the delivery time and price are relatively stable, the market price is currently strong, and the difficulty of negotiation is high, with the market inventory level continuing to decline. Some power module products, such as LTM4620, have tight delivery times and rising market prices. The original factory is in an allocated state, and for HMC products that have always had longer delivery times, the current demand is low, and the market supply is not abundant, with prices remaining relatively stable. Due to the long delivery times and fewer production lines, the original factory’s willingness to offer discounts is also minimal, so the market continues to remain stable. Some of ADI’s isolation and interface chips currently have a high inventory, with a serious upside-down situation, and there is a certain increase in customer willingness to purchase. However, the ADI customer base is small, so the market enthusiasm is not very high. Some models with large volumes may be able to arouse customer interest.

TI Brand

The market and agents of TI currently have a relatively high inventory level and are still in the process of clearing inventory. In the short term, TI’s prices will continue to decline. However, with the original factory tightening prices, TI’s prices should stabilize soon. Currently, the overall demand for TI is gradually recovering, and due to price support, customer willingness to purchase is higher than before, so TI is currently in a slow growth trend.

MICROCHIP Brand

Starting this month, the number of inverted models for MICROCHIP has gradually increased, especially some low-end MCU products. In the future, MICROCHIP’s market price will face a period of price reduction. The current price of agents is still relatively strong, and it depends on how MICROCHIP cooperates with agents next. If they maintain a strong price, the market inventory may become the mainstream direction for transactions in the future.

NXP Brand

In April, NXP’s market demand decreased by at least 20%, and overall market confidence is very weak. Currently, there are more and more inverted models, and it will take a long cycle to face the pressure of inventory reduction. Especially for interface chips, customer PPV willingness is not high, and it is possible that the inverted models in the market will be the mainstream for customer cost reduction in the future.

FPGA Brands

The mainstream FPGA products are currently Xilinx, Altera, and Lattice. Because Lattice targets the consumer and industrial markets, its sales have slumped with the downturn in these sectors. Currently, Lattice’s inventory is not large, and the original factory’s price for agency batches is relatively high compared to 2020. As for Xilinx’s products, such as 7K, 7Z, etc., the market inventory is still very abundant, with a slight price inversion in the market, but the gap is not significant. However, it requires special attention that the market sources for these products are uneven, and it is necessary to strictly control the sources to prevent refurbished or counterfeit goods, which are a major disaster area. The 6S products currently have a sharp price decline, the original factory’s production capacity has been restored, the delivery time has returned to normal, there are many inverted models, and it is a good time to purchase inventory.

ALTERA Brand

Since being acquired by Intel, the delivery time has been extended, and new product development has been slow, with market share gradually declining. Currently, there is news that Altera will be separated from Intel and operate independently. The mainstream product Cyclone is currently priced close to 2020 prices, with no significant price inversion, stable sources, and stable prices. Customers can arrange their purchases according to their needs.

Storage Products

Affected by production cuts, the market’s storage product inventory reduction is relatively fast, and stockpilers in the market are also seizing the opportunity to sell quickly. In the past two years, affected by the low demand for PCs and mobile phones, storage product stockpilers did not profit but accumulated a lot of inventory. This year, taking advantage of the rise in storage prices, many stockpilers are still focusing on reducing inventory. So far, although the original factory has increased prices, the market bargaining space is still large, and the mainstream procurement may be staying in the market. Customers can seize the opportunity to start from the market. As storage prices continue to rise in the future, stocking up now should be a very good opportunity. If the market inventory level continues to decrease, this price gap may not exist.

Customer Trends

New Energy Vehicle Sector:

Currently, it is understood that due to the revision of the definition of automotive safety parts and non-safety parts, many automotive manufacturers have a large accumulation of automotive chips. Most of them have switched to non-vehicle specifications for cost considerations, and the demand for the original vehicle specifications has decreased, with a lot of stagnation. If you need to purchase vehicle-specific chips, there may be many opportunities to reduce costs with stagnant materials. In terms of the market, new energy vehicles, as the largest market capacity in recent years, many companies have laid out automotive business, and old car manufacturers are facing the huge challenge of new energy. On April 24th, news reported that Volkswagen started a large-scale layoff to save costs, with a relaxed retirement policy to ensure that Volkswagen can survive in the fierce competitive environment. From the chip end demand, the intelligence and electrification of automobiles have driven the growth of chips, mainly power devices and power management chips. In the future, autonomous driving will require a large number of computing power chips, vision chips, radar, storage, and control-related chips. Major chip manufacturers are also optimistic about this trend, investing a lot of manpower, material resources, and financial resources for research and development to seize the opportunity.

Artificial Intelligence:

It is still very hot. During the global economic recession, AI emerged and brought new vitality to economic development. The original factory NVIDIA is very popular in this industry, with its revenue increasing by 265% compared to the previous year. Currently, NVIDIA has replaced 144 800G optical modules with 2 1.6T optical modules, which will also bring continuous upgrades and improvements to AI products. Currently, NVIDIA’s AI chips can be sold for 3-4W US dollars, and analysts believe that the high chip prices may attract a wave of user research interest. In addition, the rise of AIPC is also conducive to the rise of AI chips. After NVIDIA launched AIPC, Lenovo, HP, Acer, and other PC manufacturers have successively launched AI PC products to seize market share, which is also a main reason why INTEL’s CPU is expected to rise in price. The highly anticipated Apple also recently released the new MacBook Air with the M3 chip. The M3 chip integrates a faster and stronger 16-core neural network engine, which, together with the accelerators in the central processor and graphics processor, speeds up machine learning on the device. Therefore, Apple boldly claims that the new MacBook Air is “the world’s best consumer laptop for AI”. This statement is the same as what Apple CEO Tim Cook said not long ago at the annual shareholders’ meeting, when he said, “All Macs driven by Apple chips are very powerful artificial intelligence machines. In fact, there are no better computers for artificial intelligence on the market than Macs.”

Communications, Industrial, Medical, Consumer and Other Customer Fields:

There are currently no major changes and are still in a slow recovery state. The demand growth is less than 10%, and some industries are almost negligible, and there is no significant increase expected at present.

Summary

According to the shipment data from major original factories and analyst forecasts, the demand for consumer electronics is gradually improving, which is a very positive signal for the overall environment. In addition, in the industrial field, unlike the past where all industries were declining, the demand in some industrial sectors is gradually improving and growing slowly. Some industries are still declining, indicating that the overall economy has passed the period of severe recession and is slowly improving, but this cycle may still need to be maintained for a period of time. Therefore, for the entire industry chain, the low point has passed, and what awaits us will be a long recovery cycle.


This is the monthly spot market analysis report from UniBetter. It is hoped that this summary and analysis of the chip spot market can bring you some help and value.


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