During the downward cycle, keywords such as layoffs, order cuts, bankruptcy and deregistration have permeated the cloudy year of 2023.

  The old year has passed, and the new year begins. Waving our hands, we bid farewell to the past and rush towards 2024 with beautiful hopes for the future. Although the future represents uncertainty and uncertainty, industry trends are traceable in the process of industrial development.

  So, in 2024, full of imaginative space, what new changes, trends, and opportunities will the semiconductor industry have? Will the dawn of recovery that practitioners are looking forward to, like the pipa girl in "The Pipa Tour," emerge with countless calls?

Vol.1

The market will grow by 20%

  Recently, the latest research by International Data Corporation (IDC) shows that global semiconductor revenue in 2023 decreased by 12.0% year-on-year, reaching $526.5 billion, but higher than the institution's September estimate of $519 billion. It is expected to grow by 20.2% year-on-year in 2024, reaching $633 billion, higher than the previous forecast of $626 billion.

  According to the agency's forecast, as the long-term inventory adjustments in the two largest segmented markets, PC and smartphones, fade away, the visibility of semiconductor growth will increase. As electrification continues to drive semiconductor content growth in the next decade, inventory levels in the automotive and industrial sectors are expected to return to normal levels in the second half of 2024.
It is worth noting that the segmented markets with a recovery or growth trend in 2024 are smartphones, personal computers, servers, automobiles, and the AI market.

Smartphones

  After experiencing a downturn for nearly three years, the smartphone market finally showed signs of recovery starting from the third quarter of 2023.

  According to Counterpoint research data, global smartphone sales, after 27 consecutive months of year-on-year decline, saw a year-on-year increase of 5% in first-time sold transactions (i.e. retail sales) in October 2023. Third party market research institutions such as IDC predict that the shipment volume of China's smartphone market will achieve the first year-on-year growth since 2021 in 2024.

In the Chinese market, both the Huawei Mate 60 series and Xiaomi 14 have greatly attracted market attention and achieved good results, becoming the best-selling phones of the year.

  Canalys predicts that the shipment volume of smartphones for the entire year of 2023 will reach 1.13 billion units, with an expected growth of 4% by 2024, reaching 1.17 billion units. It is expected that by 2027, the shipment volume of the smartphone market will reach 1.25 billion units, with a compound annual growth rate (2023-2027) of 2.6%.

  "The rebound of smartphones in 2024 will be driven by emerging markets, where smartphones remain an indispensable part of connectivity, entertainment, and productivity," said Sanyam Chaurasia, senior analyst at Canalys. Chaurasia said that one-third of the smartphones shipped in 2024 will come from the Asia Pacific region, compared to only one-fifth in 2017. Driven by the recovery of demand in India, Southeast Asia, and South Asia, the region will also become one of the fastest-growing regions with an annual growth rate of 6%.

  It is worth mentioning that the current smartphone industry chain is highly mature, and stock competition is intensifying. At the same time, various aspects such as technological innovation, industrial upgrading, and talent cultivation are driving the smartphone industry to highlight its social value.

personal computer

  According to the latest estimate from TrendForce, global laptop shipments will reach 167 million units in 2023, a year-on-year decrease of 10.2%. However, with the easing of inventory pressure, it is expected that the global market will return to a healthy supply and demand cycle in 2024. It is expected that the overall shipment scale of the notebook market will reach 172 million units in 2024, an annual increase of 3.2%. The main growth drivers come from the demand for device replacement in the terminal business market, as well as the expansion of Chromebook and e-sports laptops.

  TrendForce also mentioned the development status of AI PCs in the report. The organization believes that due to the high cost of upgrading AI PC related software and hardware, the initial development will focus on high-end business users and content creators. The emergence of AI PCs may not necessarily stimulate additional PC procurement demand, and most of them will be naturally upgraded to AI PC devices along with the business upgrade process in 2024.

  For the consumer end, the cloud based AI applications currently available on PC devices can mostly meet the needs of daily life and entertainment. If there are no AI killer applications in the short term, it will be difficult to quickly promote the popularity of consumer AI PCs by proposing a meaningful upgrade of the AI experience. However, in the long run, with the development of more diverse AI tools in the future and the lowering of price barriers, the popularity of consumer AI PCs can still be expected.
Server and data center

  According to Trendforce estimates, the shipment volume of AI servers (including those equipped with GPUs, FPGAs, ASICs, etc.) will exceed 1.2 million units in 2023, with an annual increase of 37.7%, accounting for 9% of the overall server shipment volume. In 2024, it will grow by more than 38%, and the proportion of AI servers will exceed 12%.

  With the efforts of ChatBOT (chatbots), generative AI, and other applications in various fields, cloud solution providers such as Microsoft, Google, AWS (Amazon) have increased their investment in AI, driving up the demand for AI servers.

  From 2023 to 2024, active investment from cloud solution providers will drive the growth of demand for AI servers. After 2024, it will be extended to more application fields where industry professionals will invest in professional AI models and software service development, driving the growth of edge AI servers equipped with medium and low-end GPUs. It is expected that the average annual growth rate of edge AI server shipments will exceed 20% from 2023 to 2026.

New energy vehicles

  With the continuous promotion of the new four modernizations trend, the demand for chips in the automotive industry is constantly increasing.
From basic power system control to advanced driving assistance systems (ADAS), autonomous driving technology, and automotive entertainment systems, there is a great dependence on electronic chips. According to data provided by the China Association of Automobile Manufacturers, the number of automotive chips required for traditional fuel vehicles is 600-700, while the number of automotive chips required for electric vehicles will increase to 1600 per vehicle. The demand for chips for more advanced intelligent vehicles is expected to increase to 3000 per vehicle.

  According to relevant data, the global automotive chip market size is approximately 310 billion yuan in 2022. In the Chinese market with the strongest trend in new energy, the total sales volume of Chinese vehicles reached 4.58 trillion yuan, and the market size of Chinese automotive chips reached 121.9 billion yuan. According to the China Association of Automobile Manufacturers, the total sales of automobiles in China will reach 31 million units in 2024, a year-on-year increase of 3%. Among them, passenger car sales were around 26.8 million units, a year-on-year increase of 3.1%. The sales of new energy vehicles will reach around 11.5 million units, a year-on-year increase of 20%.

  In addition, the penetration rate of intelligence in new energy vehicles is constantly increasing. In terms of product philosophy for 2024, the ability to intelligentize will be an important direction emphasized by most new products. In 2024, the joint competition between automotive companies and the intelligent supply chain of automobiles will launch a cost-effectiveness war in the price range of 100000 to 200000 yuan.
This also means that there will be a significant increase in demand for chips in the automotive market next year.

Vol.2
What are the trends in industrial technology?

  Innovation is the primary driving force for development.

  The emergence of ChatGPT at the beginning of the year ignited the global pursuit of Generative Artificial Intelligence (AIGC), and brought great opportunities to the segmented product markets such as AI chips, GPUs, and storage.

  What can be expected from technological innovation when there is a clear trend of recovery in the entire industry?

AI chip

  AI runs through the entire year of 2023 and will continue to be an important keyword in 2024.

  Some institutions predict that the chip market for executing artificial intelligence (AI) workloads is growing at a rate of over 20% per year. The AI chip market size will reach 53.4 billion US dollars in 2023, an increase of 20.9% compared to 2022, and a growth of 25.6% in 2024, reaching 67.1 billion US dollars. By 2027, AI chip revenue is expected to be more than twice the market size of 2023, reaching $119.4 billion.

  Gartner analysts point out that in the future, large-scale deployment of customized AI chips will replace the current dominant chip architecture (discrete GPUs) to adapt to various AI based workloads, especially those based on generative AI technology.
2.5/3D Advanced Packaging Market
  In recent years, with the evolution of chip manufacturing processes, the iteration progress of Moore's Law has slowed down, leading to a sharp increase in the marginal cost of chip performance growth. While Moore's Law is slowing down, computational demand is skyrocketing. With the rapid development of emerging fields such as cloud computing, big data, artificial intelligence, and autonomous driving, the efficiency requirements for computing power chips are becoming increasingly high.

  Under multiple challenges and trends, the semiconductor industry is beginning to explore new development paths. Among them, advanced packaging has become an important track, playing an important role in improving chip integration, shortening chip distance, accelerating electrical connection speed between chips, and optimizing performance.

  2.5D itself is a dimension that does not exist in the objective world, as its integration density exceeds 2D but cannot reach the integration density of 3D. Therefore, it is called 2.5D due to its compromise. In the field of advanced packaging, 2.5D specifically refers to the integration method using an intermediate layer, which is currently mostly made of silicon material, utilizing its mature technology and high-density interconnect characteristics.

  3D packaging technology and 2.5D are different from high-density interconnection through intermediate layers. 3D refers to the direct high-density interconnection of chips through TSV (silicon via technology) without the need for intermediate layers.

  International data company IDC predicts that the 2.5/3D packaging market is expected to have a compound annual growth rate (CAGR) of 22% from 2023 to 2028, making it a highly anticipated area in the semiconductor packaging testing market in the future.

HBM

  An H100 chip, with the H100 bare chip occupying the core position, and three HBM stacks on each side. The combined area of six HBMs is equivalent to that of the H100 bare chip. These six ordinary memory chips are one of the main culprits of the H100 supply shortage.

  HBM takes on a portion of the storage function in the GPU. Unlike traditional DDR memory, HBM essentially stacks multiple DRAM memories vertically, which not only increases memory capacity but also effectively controls memory power consumption and chip area, reducing the space occupied inside the package. In addition, HBM achieves higher bandwidth by significantly increasing the number of pins on the basis of traditional DDR memory to achieve a memory bus with a width of 1024 bits per HBM stack.

  AI training has extremely high requirements for data throughput and data transmission latency, so there is also a high demand for HBM.

  In 2020, ultra bandwidth solutions represented by high bandwidth memory (HBM, HBM2, HBM2E, HBM3) began to gradually emerge. After entering 2023, the crazy expansion of the generative artificial intelligence market represented by ChatGPT has not only rapidly increased the demand for AI servers, but also driven the sales of high-end products such as HBM3 to rise.

  Guojin Securities predicts that the global DRAM market size is expected to reach 59.6 billion by 2023. Omdia's research shows that from 2023 to 2027, the annual growth rate of HBM market revenue is expected to soar by 52%, and its share in DRAM market revenue is expected to increase from 10% in 2023 to nearly 20% in 2027. Moreover, the price of HBM3 is approximately 5-6 times that of standard DRAM chips.

Satellite communication

  For ordinary users, this feature is optional, but for those who enjoy extreme sports or work in harsh conditions such as deserts, this technology will be very practical and even "life-saving".
Satellite communication is becoming the next battlefield targeted by various mobile phone manufacturers. At present, Huawei, Apple, Honor, OPPO, and others have all announced that they will incorporate satellite communication technology into the new generation flagship models, and have successively announced new developments.

  Shanxi Securities Gao Yuyang stated that direct connection of mobile phones to satellites can quickly increase the market penetration rate of satellite communication in a short period of time, drive the commercial performance growth of related hardware suppliers and service providers, accelerate the technological accumulation of China's satellite industry, and is expected to become the main application model of satellite internet in the future. According to data from the China Academy of Information and Communications Technology, the market size of satellite communication terminals in China will reach 1.02 billion US dollars by 2027.