01. AI Drives Development, Semiconductor Inventory Clearance Nears End
With the continuous development of artificial intelligence (AI) technology, the process of reducing semiconductor inventories is nearing its end. Despite recent unfavorable news such as semiconductor tariffs, tech giants like Nvidia, Google, and Microsoft have showcased new AI technologies, demonstrating their significant potential for application. The global market has gradually moved past the tariff turmoil in early April, and the new technological applications from these tech giants have reignited investors' confidence in AI.
Nvidia is transitioning from a technology company to an AI infrastructure company, consolidating its core position in the global AI field and building a broader ecosystem. A McKinsey survey indicates that the inventory levels of over 450 global semiconductor companies have dropped from their peak two years ago. Inventory pressure for fabless semiconductor companies, foundries, and downstream ODMs and OEMs has significantly decreased. The Nikkei Industry Survey also expects that the supply-demand imbalance for legacy semiconductors in consumer electronics and automotive sectors will gradually improve in the second half of the year.
02. DDR4 in Short Supply! Samsung Halts Production Early, Micron's Prices Soar by 50%
On June 4th, STMicroelectronics CEO Shelly indicated that the company has observed signs of recovery in the semiconductor market, with expectations of improved performance in the coming quarters. Order volumes in the second quarter have increased, and the market is in an upward cycle. The recovery momentum is expected to continue into the third quarter, with potential year-on-year sales growth. However, Shelly pointed out that geopolitical risks, particularly U.S. trade policies, could bring uncertainty to the market in the second half of 2025.
Shelly also noted that there is currently no evidence of significant customer stockpiling. Demand is uneven across regions, with strong demand in China but a weaker market in Europe. Previously, STMicroelectronics experienced a decline in orders and excess capacity due to weak demand in the automotive, industrial, and consumer electronics markets. However, with the rise in demand driven by AI and emerging applications, the semiconductor industry is gradually emerging from the trough.
03. NXP Plans to Close Four 8-Inch Wafer Plants, Shift to 12-Inch Production
On June 11, it was reported that NXP plans to close four 8-inch wafer plants over the next decade, including one in Nijmegen, the Netherlands, and three in the United States. The adjustment aims to shift to 12-inch wafer production to reduce fixed and manufacturing costs and enhance profitability.
Additionally, NXP's joint venture with VIS in Singapore is constructing a 12-inch wafer plant, which is expected to begin mass production in 2027, with a monthly capacity of 55,000 wafers by 2029. The plant will focus on producing mixed-signal, power management, and analog chips with process nodes ranging from 130nm to 40nm, becoming a key manufacturing base for NXP in the Asia-Pacific region.
04. Micron to Invest $1.6 Billion in Semiconductor SEZ in India
On June 5th, Broadcom Inc., the U.S. semiconductor giant, projected that its sales for the third quarter (May-July) would exceed market expectations, primarily due to robust demand for networking semiconductors and custom artificial intelligence (AI) semiconductors.
Broadcom expects third-quarter sales of approximately $15.8 billion, higher than the market consensus estimate of $15.71 billion aggregated by Refinitiv (LSEG). During the earnings call, Broadcom CEO Hock Tan stated that AI semiconductor sales are accelerating, with an estimated $5.1 billion in revenue for the third quarter, marking the tenth consecutive quarter of growth. This is driven by continued investment from hyperscale partners. Meanwhile, non-AI semiconductor sales remain near the bottom, with a relatively slower recovery pace.
05. AMD Confirms MI350X and MI355X AI Chips to Use Samsung/Micron's HBM3E Memory
J.P. Morgan's latest report released on June 4th indicates that the strong demand for AI servers is driving an increase in supply chain orders. The report's analysis of Dell and HP's financial statements shows a promising outlook for AI server orders, with ODM manufacturers such as Wistron set to benefit. The growing interest in AI from second-tier cloud service providers (CSPs) is also contributing to the accumulation of supply chain orders, which is advantageous for manufacturers like Quanta, Wiwynn, and Foxconn.
Commercial PC demand remains robust, primarily driven by the expiration of Windows 10 and the launch of AI-enabled PC models. However, consumer demand is relatively weaker due to the impact of tariffs. Asian brands such as ASUS are less affected.
06. Amazon Invests $20 Billion in Pennsylvania AI Data Center, Benefitting Quanta, Wiwynn, and Inventec
On June 11, Amazon Web Services (AWS), Amazon's cloud computing service provider, announced a $20 billion investment to build an AI data center in Pennsylvania, USA. Quanta, Wiwynn, and Inventec, as AWS's main contract manufacturing partners, will benefit from this investment. Wiwynn is the primary supplier of AWS ASIC servers, providing exclusive rack assembly services for the Inferentia and Trainium platforms. It is expected that its revenue from AWS will see significant growth in 2025.