© pichetw dreamstime.com Analysis | August 01, 2019
Spot and contract prices split ways
DRAMeXchange finds that although spot prices have increased by 24% on average since the start of July, the scale of the spot market is too small to relieve suppliers of their high inventory levels by any noticeable amount.
Furthermore, end demand for memory products saw no improvement entering peak-season, putting contract prices on the slide yet again. Contract prices for market mainstream DDR4 8GB products have come to USD 25.5, a 10.5% decline MoM from USD 28.5. TrendForce explains that quotes for contract prices were driven by the dynamics of supply and demand rather than news of recent events circulating in the market. Demand forecasts give that the total annual PC shipments (including NB) will drop by 4.8%, the total annual smartphone production volume will drop by about 5%, and the total annual server shipments will register flat growth (a downward correction from a YoY growth of 3.9%). On the supply side, some DRAM manufacturers have announced plans to scale back production, but the actual size of these cuts are fairly limited, and mainly involving phase-outs of legacy processes or wafer reductions accompanying the adoption of more advanced processes. Manufacturers are carrying about 3-5 months of inventories up to now. An unresolved oversupply conjoined with the fact that the contract market forms over 90% of the whole DRAM market means that contract prices are still on the decline this month. Looking at DRAM price trends in 3Q, we see that it will be worth observing whether Japan will actually allow material exports after a 90-day hold-up, but judging from suppliers' willingness to drive sales by lowering prices in July, this won' t pose too big of a problem for production and shipments to come. Even though Japan announced the removal of South Korea from its list of 'white countries,' it is merely removing South Korea's status as a most-favoured nation (MFN) and does not constitute a sanction or restriction, placing South Korea alongside Taiwan and other countries, whose exports of sensitive commodities must go through meticulous reviewing. However, suppliers still hope to leverage this issue to keep prices up somewhat and raise the difficulty in gauging the movements of contract prices for 3Q19. Circulating News Bringing Up Spot Prices, with a Real Reversal to Depend on Supply and Demand TrendForce points out that the recent leap in spot prices were originally the result of the controls placed by Japan on exports of three kinds of semiconductor materials, especially since the price falls in the last two years caused inventories for market channels to become low. The addition of market anxieties and worries over future supply caused spot prices to leap large in the short term, but no actual transactions are taking place in spot markets, and no transactions means a very high probability for prices to plunge after peaking. Past experiences show that the spot market often forms an indicator forecasting the rise and fall of the DRAM industry, but whether the industry will fluctuate by a large degree depends on the actual increases or decreases to inventory. Yet the perceived rise in DRAM spot prices remain mere news, and are unlikely to constitute an official bounce in prices in the short term with suppliers holding large inventory levels, unless the Japan-South Korea dispute worsens. Japan Tightens Export Controls, with Actual Extent of Impacts to Manifest in 3Q Japan has announced a tightening of South Korea-bound export controls on July 1, with three materials with potential military uses listed among the items requiring close scrutiny. But TrendForce's investigations show that among the three restricted items: photoresists, hydrogen fluoride and fluorinated polyamides, only hydrogen fluoride is used in DRAM/NAND production. Although Japan holds a 60-70% share in the global market for hydrogen fluoride, semiconductor manufacturers may still acquire the material from other regions or countries. And since Samsung and SK Hynix hold stockpiles that will last them for around 2.5 months, the short term impacts won't present much of a problem. According to sources, Korean DRAM suppliers have already sent documents to be reviewed by the Japanese government immediately after the materials incident with most documents rejected due to missing required documents, if any were rejected at all. The reviews will last 90 days at most, and we should see things start to clear up a bit in 3Q. If the first batch of controlled items may be successfully exported to South Korea, then the Japan-South Korea problem over controlled materials may be considered subsided for now.
More information can be found at Trendforce.
More information can be found at Trendforce.
Heidenhain opens new expanded Western US HQ This includes the expansion of its executive, sales and technical support offices, as well as demo facilities in San Jose, California.
Delphi Technologies awarded new power electronics business Delphi Technologies is making new strides by securing new power electronics business wins in the second quarter of 2020 with three Chinese OEMs. The new business is scheduled to launch in the 2021-23 timeframe.
Mycronic combines US operations in new facility near Boston Mycronic US says that all of its operations have been integrated into a new 102,000 square-foot facility in Tewksbury, near Boston, Massachusetts.
Lynn Electronics acquires West Coast cable assembly company Pennsylvania-based Lynn Electronics, a manufacturer of fibre optic and copper cable assemblies, has completed its acquisition of Coast 2 Coast, LLC (C2C), an Anaheim, California cable assembly manufacturer.
Sponsored content by ASMASM Impact – Release Summer 2020: SMT technology leader presents new products in compact livestream ASM’s new releases for this summer are innovative, smart, and deliver great gains in productivity. ASM will present these new solutions, the premiere of the ASM Works software suite and many more innovations around the integrated smart factory in a compact livestream with expert chats and spin-off sessions.
Fictiv and Jabil team up for agile 3D printing collaboration The collaboration aims to accelerate and de-risks product development in the move from prototyping and low volume production to large scale global fulfilment.
TT expands with new industrial electronics manufacturing facility The UK-based electronics manufacturing specialist is expanding the footprint of its Global Manufacturing Solutions division by opening operations in Kuantan, Malaysia.
GE Appliances invests $62 million at its Louisville facility The manufacturer is gearing up to build high-end refrigerators and expand capacity at its manufacturing facility in Louisville, Kentucky., creating 260 new jobs.
Eaton buys new facility – merges busway operations from multiple sites Power management company Eaton has purchased a new facility in Hodges, South Carolina, establishing a new home for Eaton’s busway product line currently spanning three facilities across Greenwood County.
AIM adds new facility in Brazil AIM Solder has opened a new wholly-owned facility in Manaus, Brazil. This new stocking facility, which represents the only legitimate source of AIM products in Brazil, enables the company to support a growing Brazilian market.
PFOA now in REACh and POP regulation On 4 July, PFOA - perfluorooctanoic acid, its salts and precursor compounds - was included in the POP (Persistent Organic Pollutants) Regulation (EU) 2019/1021 and at the same time also came into force in the REACh Regulation (Annex XVII, entry 68).
Manz AG receives further Battery order Manz AG is expanding its successful partnership with an international battery manufacturers in the Energy Storage segment with a further major order in the mid double-digit million euro range.
Advantech and Interlatin to set up JV in Mexico Industrial IoT specialist, Advantech, says it is establishing a joint venture subsidiary in Mexico with its channel partner Interlatin.
Mercedes-Benz takes equity stake in Farasis Mercedes-Benz is taking another important step on its journey towards CO₂--neutral mobility. The Stuttgart-based car manufacturer has launched a strategic partnership with Chinese battery cell manufacturer Farasis Energy (Ganzhou) Co., Ltd., including taking an equity stake.
A new EMS provider sees the light of day EMS providers DataED and Bestronics merge to launch a new player – Emerald EMS.
Tektronix joins the fight agains COVID-19 Tektronix has shifted its focus from supporting vehicle manufacturing to assisting with ventilator production.
ABB completes divestment of Power Grids to Hitachi ABB has reached a significant milestone in the company’s transformation towards a decentralized global technology company, with the completion of the divestment of 80.1% of its Power Grids business to Hitachi.
Germany amps up domestic battery production with massive state subsidies The German government is investing more than EUR 1.5 billion in battery cell research and production.
Internal promotions and executive retirements at Kimball EMS provider, Kimball Electronics, has made two new internal promotions aimed at contributing to the company accelerating its strategic growth plans.
Kyocera & TMDU team up for research on vitals measurement headset Kyocera Corporation and Tokyo Medical and Dental University (TMDU) have teamed up on a joint research project to develop a wireless headset that can remotely monitor high accuracy patient biometrics, such as blood oxygen saturation (SpO2).
German battery manufacturer receives funding for cell production facility VARTA AG receives public funding of EUR 300 million for battery cell production facility.
Scanfil to streamline its factory network The EMS provider is planning to combine the production of its Hamburg factory with its other factories in Germany and Poland
Kitron awarded new order within measurement technology Kitron has been awarded new business for measurement technology. The award covers a period of five years, and the expected annual value is between EUR 3.5-5 million.
NORBIT ASA awarded aquaculture contract Norwegian technology manufacturer, NORBIT, has been awarded a new contract from an existing customer within the aquaculture market.
Saki strengthens its Asian operations The AOI specialist is expanding its global sales organisation with new Asia sales department, and appointing Katsuhiro Eddie Ichiyama as Senior General Manager for the Asian regionLoad more news
- X-FAB hit by cyber attack
- U.S.: Cancellation of Preferential Treatment for Hong Kong to impact chip industry
- Apple to start mass producing Mac SoC, projected to cost under US$100
- Arm to strengthen focus on core semiconductor IP business growth
- Fictiv and Jabil team up for agile 3D printing collaboration