During the down cycle, key words such as layoffs, order cancellations, bankruptcy and cancellations run through the gloomy year of 2023.

The old year is gone and the new year has begun. Waving our hands, we say goodbye to the past and head towards 2024 with good hopes for the future. Although the future represents the unknown and contains various uncertainties, there are traces of industry trends to follow in the development process of the industry.

So, in 2024, which is full of imagination, what new changes, new trends and new opportunities will there be in the semiconductor industry? Will the dawn of recovery that practitioners are looking forward to come out like the Pipa Girl in "Pipa"?

1. The market will grow by 20%

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

According to the agency's forecast, visibility of semiconductor growth will increase as long-term inventory corrections in PCs and smartphones, the two largest segments, fade, and inventories in automotive and industrial will increase as electrification continues to drive semiconductor content growth over the next decade. Levels are expected to return to normal levels in the second half of 2024.

It is worth noting that the market segments with a rebound trend or growth momentum in 2024 are smartphones, personal computers, servers, automobiles, and the AI market.

1.1 Smart phone

After nearly three years of sluggishness, the smartphone market has finally begun to pick up momentum starting in the third quarter of 2023.

According to Counterpoint research data, after global smartphone sales declined year-on-year for 27 consecutive months, the first-time sales transaction volume (i.e. retail sales) in October 2023 increased by 5% year-on-year. Third-party market research institutions such as IDC predict that China's smartphone market shipments will achieve year-on-year growth for the first time since 2021 in 2024.

In the Chinese market, both Huawei Mate 60 series and Xiaomi Mi 14 have attracted market attention to a great extent and achieved good results, becoming the hottest mobile phones of the year.

Source | @huawei.com Weibo

Canalys predicts that smartphone shipments will reach 1.13 billion units in 2023 and are expected to increase by 4% to 1.17 billion units in 2024. It is expected that the smartphone market shipments will reach 1.25 billion units by 2027, with a compound annual growth rate (2023 to 2027) of 2.6%.

Canalys senior analyst Sanyam Chaurasia said, "The rebound in smartphones in 2024 will be driven by emerging markets, where smartphones remain an integral part of connectivity, entertainment and productivity." Chaurasia said smartphones shipped in 2024 One-third of mobile phones will come from the Asia-Pacific region, compared with only one-fifth in 2017. Driven by the recovery in 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 fierce. At the same time, technological innovation, industrial upgrading, talent training and other aspects are driving the smartphone industry to highlight its social value.

1.2  Personal computer

According to the latest forecast from TrendForce, global notebook computer shipments will reach 167 million units in 2023, a year-on-year decrease of 10.2%. However, as inventory pressure eases, the global market is expected to return to a healthy supply and demand cycle in 2024. The overall notebook market shipments are expected to reach 172 million units in 2024, an annual increase of 3.2%. The main growth momentum comes from the replacement demand in the terminal business market and the expansion of Chromebooks and gaming laptops.

TrendForce also mentioned the development status of AI PC in the report. The agency believes that due to the current high cost of upgrading AI PC-related software and hardware, the initial stage of development will focus on high-end business users and content creators. The emergence of AI PC will not necessarily stimulate additional PC purchase demand. Most of them will naturally migrate to AI PC devices during the business replacement process in 2024.

For consumers, most of the cloud AI applications currently provided by PC devices can meet the needs of daily life and entertainment. If there is no AI killer application in the short term and it is proposed to upgrade the AI experience, it will be difficult to quickly promote consumer AI. PC popularity. However, in the long term, after the application possibilities of more diverse AI tools are developed in the future, and the price threshold is lowered, the penetration rate of consumer AI PCs can still be expected.

1.3 Servers and data centers

According to Trendforce estimates, AI servers (including equipped with GPUs, FPGAs, ASICs, etc.) will ship more than 1.2 million units in 2023, with an annual growth of 37.7%, accounting for 9% of overall server shipments, and will grow by more than 38% in 2024. %, AI servers will account for more than 12%.

As ChatBOT (chat robot), generative AI, etc. develop in various application fields, cloud solution providers such as Microsoft, Google, AWS (Amazon), etc. have increased their investment in AI, driving up the demand for AI servers.

From 2023 to 2024, the demand for AI servers will mainly be driven by active investment by cloud solution providers. After 2024, it will extend to more application fields. Players will invest in the development of professional AI models and software services, driving the growth of edge AI servers equipped with mid- to low-end GPUs. , it is expected that the average annual growth rate of edge AI server shipments from 2023 to 2026 will exceed 20%.

1.4 New energy vehicles

As the trend of the new four modernizations continues to advance, the automotive industry's demand for chips continues to increase.

From basic power system control to advanced driver assistance systems (ADAS), driverless technology and automotive entertainment systems, they all rely heavily on electronic chips. Data provided by the China Association of Automobile Manufacturers shows that the number of automotive chips required for traditional fuel vehicles is 600-700, and the number of automotive chips required for electric vehicles will increase to 1,600 per vehicle, while the demand for chips for more advanced smart cars is It is expected to increase to 3,000 pieces/vehicle.

Relevant data shows that in 2022, the global automotive chip market will be approximately 310 billion yuan. In the Chinese market with the strongest new energy trend, China's vehicle sales reached 4.58 trillion yuan, and China's automotive chip market reached 121.9 billion yuan. According to the China Association of Automobile Manufacturers, my country's total automobile sales 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%. Sales of new energy vehicles will reach about 11.5 million units, a year-on-year increase of 20%.

In addition, the penetration rate of intelligence in new energy vehicles is also constantly increasing. In terms of product concepts in 2024, intelligent capabilities will be an important direction emphasized by most new products. In 2024, the joint involution of car companies and the intelligent automobile supply chain will launch a price-performance war for intelligent automobiles in the price range of 100,000-200,000.

This also means that there will still be a large increase in demand for chips in the automotive market next year.

2. What are the industrial technology trends?

Innovation is the first driving force for development.

For example, the emergence of ChatGPT at the beginning of the year ignited the global pursuit of generative artificial intelligence (AIGC), and at the same time brought great opportunities to the market segments of AI chips, GPUs, storage and other products.

When the entire industry may see a clear recovery trend, what can we expect in terms of technological innovation?

2.1 AI chip

AI has been used throughout 2023, and it will still become an important keyword in 2024.

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

Gartner analysts pointed out that in the future, large-scale deployment of customized AI chips will replace the currently dominant chip architecture (discrete GPU) to adapt to various AI-based workloads, especially those based on generative AI technology.

2.2 2.5/3D advanced packaging market

In recent years, with the evolution of chip manufacturing technology, the iteration progress of "Moore's Law" has slowed down, resulting in a sharp increase in the marginal cost of chip performance growth. While Moore's Law is slowing down, computing demands are skyrocketing. With the rapid development of emerging fields such as cloud computing, big data, artificial intelligence, and autonomous driving, the performance requirements for computing chips are getting higher and higher.

Facing multiple challenges and trends, the semiconductor industry has begun 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 the electrical connection speed between chips, and optimizing performance.

2.5D itself is a dimension that does not exist in the objective world, because its integration density exceeds that of 2D, but does not reach the integration density of 3D. It is a compromise, so it is called 2.5D. In the field of advanced packaging, 2.5D specifically refers to the integration method that uses an interposer. The interposer is currently mostly made of silicon material, taking advantage of its mature technology and high-density interconnection characteristics.

3D packaging technology is different from 2.5D, which uses an interposer for high-density interconnection. 3D means that no interposer is required, and the chip directly performs high-density interconnection through TSV (through silicon via technology).

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, which is an area that requires high attention in the future in the semiconductor packaging and testing market.

2.3 HBM

An H100 chip, the H100 die occupies the core position, with three HBM stacks on each side. The combined area of the six HBMs is equivalent to the H100 die. These six mediocre memory chips are one of the "culprits" in the H100 supply shortage.

HBM assumes part of the memory in the GPU. Different from traditional DDR memory, HBM essentially stacks multiple DRAM memories in a vertical direction, which not only increases the memory capacity, but also controls the power consumption and chip area of the memory, and reduces the space occupied inside the package. In addition, HBM achieves higher bandwidth based on traditional DDR memory by greatly increasing the number of pins to achieve a 1024-bit wide memory bus per HBM stack.

AI training has extremely high requirements on data throughput and data transmission latency, so there is also a huge 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 increased the demand for AI servers rapidly, but also driven up the sales of high-end products such as HBM3.

Sinolink Securities predicts that the global DRAM market size will reach 59.6 billion in 2023. Omdia research shows that HBM market revenue is expected to surge by 52% annually from 2023 to 2027, and its share of DRAM market revenue is expected to increase from 10% in 2023 to nearly 20% in 2027. Moreover, the price of HBM3 is about 5-6 times that of standard DRAM chips.

2.4 Satellite communication

For ordinary users, this function is dispensable, but for those who love extreme sports or work in harsh conditions such as deserts, this technology will be very practical and even "life-saving."

Satellite communications are becoming the next battlefield targeted by mobile phone manufacturers. At present, Huawei, Apple, Honor, OPPO, etc. have officially announced that they will equip their new generation flagship models with satellite communication technology, and have successively announced new developments.

Gao Yuyang of Shanxi Securities said that direct connection of mobile phones to satellites can quickly increase the market penetration rate of satellite communications in a short period of time, drive the performance growth of related hardware suppliers and service providers, accelerate the accumulation of technology in my country's satellite industry, and is expected to become the main player in the future satellite Internet. Application mode. Data from the National Academy of Information and Communications Technology shows that by 2027, the size of my country’s satellite communication terminal market will reach US$1.02 billion.

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