Market Insights - Q4 2023 - New Design - Flipbook - Page 10
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General Market Insight
Standard Logic
" Supply - Semiconductor demand softens in consumer markets, leading to a healthier supply structure with
revised lead times of 6-12 weeks for general-purpose logic; automotive and application-specific semiconductors
maintain stability in delivery times and prices; logic suppliers report stabilized lead times based on inventory
availability; most suppliers have capacity utilization below 80% and BB ratios below 1.0; foundry utilization rates
decline through 2023; Texas Instruments improves lead times, while Nexperia plans new production capacity;
Onsemi shifts logic portfolio manufacturing to Vanguard Semiconductor; Onsemi focuses on industrial and
automotive growth, contributing 80% of sales.
" Market Dynamics - automotive sector's contribution to growth expected to rise in 2023 and continue doubledigit growth in the next three years; strong demand in automobiles, industrial equipment, and medical equipment
mitigates semiconductor oversupply concerns; Chinese logic suppliers SG Micro and Wuxi ICORE enter the logic
supply system with competitive prices.
" Price – Consumer materials experience declining orders, demand, and prices, while automotive and industrial
equipment materials maintain stability; suppliers adjust prices to gain market share amid softening demand;
Texas Instruments and Nexperia focus on pricing to increase market share; Onsemi expected to maintain flat
prices with solid supply and demand for logic; Microchip implements price increases, impacting Emitter Coupled
Logic (ECL); caution needed in monitoring potential issues with production cuts when demand recovers in
certain end markets.
Discrete
" Supply – Auto market experiences changes; allocation of automotive discrete components improves with slightly
reduced lead times; suppliers focus on SiC MOSFET technology for expected EV market demand; lead times by
technology vary; Infineon forecasts growth in SiC, GaN, and Si discrete products; Onsemi implements price
increases; semiconductor oversupply not expected due to strong demand in certain sectors; Chinese logic
suppliers SG Micro and Wuxi ICORE offer competitive prices.
" Market dynamics - Chinese economic slowdown linked to liquidity crisis of major real estate developers,
worsened by a 14.7% YoY drop in exports; potential deflationary impact unlikely to persist with core inflation
continuing; SiC companies, including Wolfspeed, Infineon, STM, Onsemi, and ROHM, focus on rapidly expanding
SiC production capacity; SiC usage expected to increase in electric vehicles, renewable energy, power grid
upgrades, and industrial equipment; geopolitical tensions drive suppliers to adopt China+1 strategy, establishing
post-processing facilities in Southeast Asia.
" Price - Non-automotive component prices show a slight downward trend as suppliers become more negotiable in
a softening market, while in the automotive sector, constrained production capacity keeps MOSFET and die ord
Passive Commodities
prices flat.
Optoelectronics
" Supply - Optocouplers, infrared devices, and optical sensors are widely available from most manufacturers;
Japanese manufacturers like Toshiba and Panasonic face restrictions on certain SSR products; Panasonic
automotive SSR products are currently allocated due to high demand; Tier 1 manufacturers experience declining
lead times in the face of market softening; Onsemi's lead times decrease but remain in a non-cancellable, nonrefundable status; most
manufacturers stick to cancellation policies amid customer deferrals; overall
capacity utilization is below 80% with a 30% business decline; LED manufacturers like Visual Communications
Company, Panasonic, Nichia, Dialight, Vishay, and KingBright phase out legacy products; LED suppliers explore
new business in growth markets, while consumer market demand remains stable, and procrastination behaviour
increases with reduced lead times.
" Market dynamics - Tier 1 brand suppliers concentrate on automotive and electric vehicle markets with new
products expected; Asian-based suppliers seek new business opportunities for a competitive edge; potential
challenges for small and medium-sized, non-automotive suppliers if the economy doesn't improve; OEMs
exploring sources outside China, but market slowdown hinders real action.
" Price - Prices remain stable across all product types in Q4 2023 as suppliers aim to maintain market share amid
rising material costs
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