1. Samsung, SK Hynix, Micron vie for Broadcom’s HBM3E orders

As per media ZDNet Korea, Samsung Electronics, SK Hynix, and Micron, are currently vying for orders of HBM3E memory from chip design giant Broadcom. Previously, the three memory giants have contested Nvidia and AMD’s orders in HBM3E supply.

Broadcom, the third-ranked chip design company, achieved semiconductor-related revenue as high as $29.95 billion last year. Now, it intends to equip HBM3E memory in its new AI servers, which are based on Google's TPU chips. This news sparked fierce competition among the three memory manufacturers. 

Comment: The main connection between Broadcom's business and HBM memory lies in switch chips and ASIC designs. Since 2019, Broadcom has started adopting HBM memory in some of its switch chips to meet the demand for high bandwidth and address low latency.

2. LG Display looks to sell off its last LCD plant in China as it pivots to more profitable OLED panels

LG Display is in talks to leave the LCD business to focus on OLED production, the Korea Herald reports. The display maker is reviewing options to sell its LCD assets, including manufacturing facilities in Guangzhou, China.

LG Display and Samsung were once the dominating players in the LCD panel market, but both Korean companies have been focusing on the more advanced (and presumably profitable) OLED market in recent years.

Intense competition with Chinese LCD panel manufacturers has led companies from other countries to shift to the more advanced OLED panel. In 2021, Samsung sold its LCD panel manufacturing plant in Suzhou, China, to TCL for $1.08 billion.

For its part, LG Display stopped producing LCD panels in Korea in 2022. The company is said to be continuing to take measures to reorganize and optimize its business portfolio, and closing its less profitable LCD production facilities could help with that.

Comment: Several potential buyers have surfaced for LG Display’s LCD facilities. These include China’s largest display maker, BOE Technology, and COST, the display division of Chinese home appliance manufacturer TCL Technology.

3. India's Smartphone Market Shifting Towards the High-End, vivo Leads Quarterly Shipments

India’s smartphone shipments in Q1 2024 (January-March) grew 8% YoY in terms of volume and 18% in terms of value, according to the latest research from Counterpoint’s Monthly India Smartphone Tracker. Volume growth was primarily driven by healthy inventory levels and the low base of Q1 2023. Value growth was driven by the ongoing premiumization trend and new launches during the quarter, such as the Samsung Galaxy S24 and OnePlus 12 series.

The premium segment (>INR 30,000) reached 20% volume share, its highest ever, and 51% value share of the overall Indian smartphone market in Q1 2024. Additionally, 5G smartphone shipments captured their highest-ever share of 71% in volume terms.

During the quarter, vivo captured the top spot by volume for the first time, with a 19% share driven by its 5G leadership. With a one-fourth share, Samsung led the market in terms of value. Also, at ~$425, Samsung’s ASP was its highest ever, driven by its leading position in the >INR 20,000 segment. This can be attributed to a stronger mix of its newly launched Galaxy S24 series due to its features such as GenAI, and the newly revamped A series, along with the increasing popularity of Samsung’s financing schemes. Apple also had a record quarter in India in terms of value, leading the premium segment both in value and volume terms, driven by the latest iPhone 15 series, especially in offline channels.

Comment: The Indian smartphone market also sees the emergence of some noteworthy brands. Nothing has become the fastest-growing brand, with a year-on-year growth rate of 144%. Motorola's shipments increased by 58% over the previous year. Xiaomi achieved a 28% growth in shipments, maintaining its position as the second-largest player in the market.

4. CEO of SMIC says Receiving Rash Orders from Smartphone Makers this Year

Zhao Haijun, Co-CEO of SMIC, revealed during an earnings call today that the company received some rush orders in the first quarter, but some 12-inch production lines are nearing full capacity and hardly complete all of the orders. Therefore, priority will be given to urgent orders related to market share, such as smartphones and other consumer electronics.

At the same time, after coordinating with customers, delivery times for computers and tablets will be postponed, as standard products usually have stable demand.

In terms of pricing, ASP will decrease every quarter, but not that rapidly. For orders where the 12-inch capacity is fully utilized, prices will remain relatively stable.

When facing competition in standard products, SMIC will prioritize ensuring customers' market share, such as display drivers and CMOS Image Sensors. It is not ruled out that the prices of subsequent standard products may further decline.

Comment: SMIC's revenue in Q1 2024 reached $1.75 billion, an increase of 19.7% year-on-year and 4.3% quarter-on-quarter. This is the first time SMIC's quarterly revenue has exceeded that of UMC and GlobalFoundries. SMIC shipped 1.79 million pieces of 8-inch wafers, a 7% increase from the previous quarter; the capacity utilization rate hit 80.8%, up 4% sequentially.

5. Japan's Three Major Automakers Slump in April Sales in China

Japan's automakers are facing a sales crisis in China, data shows, as a rapid shift to electric vehicles (EVs) has upended the world's largest auto market and led to a plunge in purchases of gasoline-powered cars. For instance, Toyota Motor sold 118,200 vehicles in China, down 27.3% year-on-year. Honda saw a 22.2% dive, with 73,831 vehicles sold, while Nissan experienced a 10.4% decline, with 54,921 sales.

Total sales of Japanese auto brands in China were down 32% year-on-year in the first quarter, more than double the pace of the overall market contraction, industry data analysed by Reuters showed.

While other automakers like Volkswagen AG have also been caught out by the sharp shift in China, Japanese automakers stand out because of their limited showing in the fast-growing category of electric and plug-in hybrid sales.

Comment: in the first quarter of 2024, Toyota's two joint ventures, FAW TOYOTA MOTOR CO., LTD. tumbled by 31.2%, and Guangzhou Toyota Motor Co, Ltd. by 32.1%. Lexus, an imported high-end brand, saw a high increase of 22.4% under the base effect of semiconductor shortages in the previous year. In Honda's two joint ventures, GAC Honda Automobile Co., Ltd plunged by 44.6%, while Dongfeng Honda experienced a 17.3% leap.