Destocking progress is different, these three types of IC will be the first out of the cycle (2023/4/19 12:12:21)
After the first quarter, the destocking progress of the industrial chain has been greatly promoted, but the process of the destocking cycle of all kinds of components is not consistent. It can be seen from the market information that the following three components will take the lead to complete the destocking cycle, indicating that the market will rebound. But with the electronic season, new demand is coming in.
Display driver IC: inventory clearance is over, the fastest cycle progress
Display driver IC follows the decrease of panel shipments and first enters the destocking stage, and is currently the first component to complete the destocking. Earlier, some IC companies confirmed that the HD version of driver and touch integrated IC (TDDI) prices have risen 10% since the beginning of March, which is the first price increase of such chips since they continued in the second half of last year. In the middle of March, it was reported that Huaqiangbei mobile phone LCD maintenance TDDI "self-help" price increase, the range of up to 50%. Near the end of March, the market recovery is more clear, the market spread lianyong, silicon innovation and other factories will be in April to part of the driver IC price increase 10% -15%.
Previous research firm TrendForce pointed out that foundry prices will not easily return to pre-pandemic levels, and manufacturers will strictly control the amount of chips to manage the inventory level after the second quarter, and the price drop will shrink to 1% -3%. Thus, driving IC will usher in a wave of moderate recovery, related enterprises will also win a breathing space.
In terms of product characteristics, the driver IC is generally manufactured by mature process, and the cost is the lowest among many ICs. At the start of the previous core shortage wave, foundries generally shifted their capacity to products with higher gross margin, resulting in a continued shortage of such chips with previously stable supply. After the tide of core shortage passed, orders for other chips went out, driving IC to "fill the line" of the foundry with its low cost characteristics. As a result, the supply of driving IC began to surge again, combined with the factors of lower downstream demand and poor digestion, resulting in continuous inventory accumulation.
When driving IC is out of stock, it is first in short supply and responds quickly when restoring supply. Its cycle operation is faster and more sensitive than other IC, so it can be regarded as an indicator of the destocking progress of the industrial chain destocking. At present, the panel, consumer electronics inventory peak has passed, driving the IC market warming with fundamental support. As for the next can return to the traditional peak season cycle conversion, it is necessary to see the demand behind the consumption season can rebound.
Memory: to save the price, the original factory jointly cut production
From the second half of last year to the first quarter of this year, both DRAM and NAND flash memory categories were in the critical phase of price reduction and destocking. In the second quarter, the inventory problem will be resolved, but the market, afraid of high inventory piles, will not expand stocking until demand is clearly positive. At this time, excessive supply becomes the biggest hidden danger, even if the storage market is controlled by several major original factory "plate", at this time also have to temporarily give up the market share, to reduce production to keep profits.
SK Hynix and Micron have explicitly cut production. Recently, Samsung reported that its net profit fell 90 percent, and it was forced to abandon counter-cyclical production expansion to join the production cut. From another point of view, can force Samsung to give up the expansion of production, the market downturn can be imagined.
The original factory consistent production reduction, will drive the memory market to stop falling. In fact, there have been recent memory price increases of about 5% of the news, this move is designed to test the downstream acceptance. But with the current PC, mobile phone and other major electronic consumer goods have not recovered the situation, want to let the downstream open stock need to have a clear demand growth signal.
Since the traditional consumer electronics demand is difficult to recover, two new types of demand have become the focus of the industry. First of all, the natural language generated AI represented by ChatGPT has been widely concerned, and many views believe that the huge amount of training will drive the huge memory demand. In addition, the electronic promotion of vehicles will drive the vehicle storage from GB class to TB class. For these two emerging markets, more attention is paid to their potential, and the core driver of memory demand growth depends on whether consumer electronics can rise.
MLCC: the important domestic original factory initiated the price increase
Recently, the most important domestic MLCC manufacturer Chaozhou Third Ring issued a price increase letter, saying that the company agreed with some partners, the actual transaction price of the orders in the second quarter. This price increase caused high attention to the market, many views that MLCC supplies inventory adjustment is close to the end, the industry bottom signal is clear.
Like other component varieties, MLCC also has clear periodic operation characteristics. The market has surged since 2017 and rebounded in the first half of 2021, going through a full cycle. In the "core shortage tide" after the epidemic, MLCC showed little performance and never became the leading role. By the second half of 2022, the reduced demand began to surplus the inventory of the industrial chain, and MLCC is also in a state of constantly high inventory.
With the price increase of Chaozhou Third Ring Road, the industry's judgment on the inflection point of MLCC market is gradually clear. TrendForce Jibang Consulting pointed out that the MLCC supplier order / shipment ratio increased slightly to 0.79 in February this year, indicating the improvement of marginal demand. But the further recovery of market vitality also depends on a recovery of demand.
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