1. Advanced foundry processes reach the transition stage of transistor structure, mature processes focus on diversified specialized development
Pure foundry processes have been migrated from planar transistors to the FinFET generation, starting with the 16 nm node. After the development of the 7nm process and the introduction of EUV lithography technology, the FinFET structure reached physical limits at the 3nm node. Since then, the two leaders in advanced manufacturing have diverged. TSMC continues to use the FinFET structure in 3nm mass-produced products in 2H22, which will be officially released in 1H23, with the volume of mass production increasing quarter by quarter. In 2023, TSMC 3nm products will include PC CPUs and smartphone SoCs. Samsung began rolling out the GAAFET-based MBCFET (Multi-Bridge Channel Field-Effect Transistor) architecture at 3nm, and this process will begin mass production in 2022. Its first generation product is a cryptocurrency mining chip. In 2023, Samsung will focus on second-generation 3nm processes with the goal of mass-producing smartphone SoCs. Both companies continue to focus on high-performance computing and smartphone platforms in the early stages of 3nm mass production, as these products have higher requirements for improving performance, lowering power consumption and reducing chip area.
With mature processes beyond 28nm, foundries focus on diversification of specialty process development and have developed technology platforms including HV (high voltage), analog, mix-signal, eNVM, BCD, and RF from logic processes. These are used to professionally manufacture peripheral ICs such as power management ICs, driver ICs, microcontrollers (MCU) and RF (Radio Frequency) required in the fields of smartphones, consumer electronics, high performance computing, automotive and industrial computing . As 5G communications, high performance computing, new energy vehicles and automotive electronics usher in a trend of increased consumption of special semiconductor components, it is essential for these applications to rely on the support of various specialized processes to achieve the special purposes required in different fields to reach .
2. Development trends focus on automotive IC design, third-generation semiconductors on the rise
The global automotive industry is trending towards CASE, driving strong demand for automotive semiconductors. Automotive semiconductors fall into two main categories: IDM and fabless. As traditional automotive chip suppliers, IDMs offer a fairly full range of different ECUs and have gradually evolved from a traditional distributed architecture to Domain Control Unit (DCU) and Zone Control Unit (ZCU) architectures. Fabless, on the other hand, continues to focus on the area of high performance computing for vehicles and develops vehicle telematics systems and SoCs for self-driving computing. Due to the complexity of automotive functions, 32-bit MCU-ECU has become the mainstream specification in the market. In 2023, its penetration rate will exceed 60%, with a market value of $7.4 billion, and it will evolve towards sub-28 nm processes (inclusive). In addition, self-driving cars require high-performance computing AI SoCs and continue to evolve towards advanced sub-5nm (inclusive) processes with computing power of 1,000 TOPS, and together with MCUs, these products will accelerate the upgrade of the global automotive industry.
With the rapid rise of 800V automotive electric drive systems, high-voltage DC charging stations, and high-efficiency green data centers, SiC and GaN power devices have entered a period of rapid development. TrendForce predicts that from 2022 to 2026, the compound annual growth rate of the SiC and GaN power devices market will reach 35% and 61%, respectively. As the demand for fast charging and better dynamic performance in electric vehicles becomes more pressing, more automakers are expected to adopt SiC technology in main inverters before 2023, among which high-reliability, high-performance, and low-cost SiC MOSFETs are a competitive focus. GaN has entered a red ocean market for low-power consumer electronics applications, and Samsung launched its first 45W GaN fast charger in 2022, once again exciting the market. As technology and supply chains continue to mature and costs decrease, GaN power devices will be expanded to medium- and high-power energy storage, data centers, home microinverters, communication base stations, and automobiles. Against the backdrop of the EU’s draconian energy efficiency requirements and China’s East-West data center plan, data center power supply and server manufacturers have clearly recognized the importance of GaN technology. GaN power devices are expected to enter the market on a large scale in 2023.
3. A new generation of DRAM is taking shape, the development of NAND flash with more than 200 layers is accelerating
In terms of DRAM, the server shipments that accompanied the pandemic-accelerated digital transformation of enterprises not only focused more on data centers, but also enabled the merging of new types of memory modules, especially modules based on CXL specifications. Since the number of RDIMM slots in a server system is limited, using CXL allows the entire device to avoid this limitation in high-speed computing while increasing the amount of DRAM that can be used by the system. In 2023, not only server CPUs like Intel Sapphire Rapids and AMD Genoa will support CXL 1.0, but also DRAM modules will use DDR5. In addition, certain server GPUs will adopt a new generation of HBM3 specifications to effectively run AI and ML (machine learning) operations. Therefore, amid the planning of memory manufacturers and numerous xPU vendors, a new generation of memory has gradually organized itself, which is expected to gain market share in 2023.
Regarding NAND flash, the number of stacked layers will accelerate in 2023 and four vendors are expected to switch to the 200+ layer technology. Some manufacturers will even mass-produce SPS (Penta Level Cell) in hopes of an opportunity to replace HDD applications on servers in the future as piece growth is further optimized. In terms of SSD transfer interfaces, with the mass production of Intel Sapphire Rapids and AMD Genoa in 2023, enterprise SSDs will be further upgraded to support PCIe 5.0 transfer, increasing the transfer rate to 32 GT/s to cater for high-speed -Computing needs to be leveraged like AI/ML and also contribute to the rapid increase in the average capacity of enterprise SSDs.
4. Accelerating MLCC development for automobiles due to increasing penetration rate of assisted driving
Advanced driver assistance systems (ADAS) are gradually becoming standard equipment in new cars. L1/L2 is the primary configuration level in the market at this stage, utilizing approximately 1,800 to 2,200 automotive MLCCs. As ADAS-specific MCUs, sensor ICs, etc. developed by semiconductor IDM become more mature, L3-level ADAS systems will become a key upgrade sought by many luxury manufacturers for their high-end car models from 2023 onwards, what will cause MLCC consumption to increase 3000~3500 units. Among the MLCCs, the 0402 size just fills the limited space of an on-board monitoring module and has become the main application size specification.
The energy core of electric vehicles has become one of the key research and development priorities of various automakers to respond to consumer demand for longer battery life, as well as to optimize charging and discharging efficiency and energy recovery systems. The inverter, the battery management system and the DC power converter are three subsystems that form the soul of the vehicle and use about 2,000 to 2,500 high-capacity (over 10u) and high-temperature (X7S/R) automotive MLCCs. Japanese manufacturer Murata has officially mass-produced new high-capacity, high-voltage automotive products of size 1206, which can reach 22 u 16 V in early 2022. Companies like TDK, Taiyo Yuden, Samsung and Yageo are also actively entering the market.
5. Carbon neutrality accelerates EV transition, battery battle rages as reduced subsidies resurface cost issues
The cost of a variety of raw materials needed for automobile manufacture increased after the start of the Russo-Ukrainian War. In particular, the battery-related material costs have risen dramatically and were quickly transferred to the list prices of automobiles. Coupled with the two-year shortage of automotive semiconductors, strengthening the toughness, elasticity and stability of the supply chain has become a top priority for automakers. Automakers hope to shorten the battery supply chain to avoid supply chain disconnects. Countries are actively promoting the localization of battery supply chains due to political considerations. On the one hand, they propose preferential investment conditions while also calling for the localization of part of the vehicle components as a carrot and stick to attract investment from battery factories worldwide. As a number of countries begin to reduce or eliminate subsidies for EV car purchases, the issue of cost has resurfaced. Since there is a need to produce low-cost models considering safety and performance, battery development is inevitable and is expected to move toward unity, diversification and integration. The unification of battery assembly strengthens battery production management and improves commonality. The use of different battery types depending on the vehicle class diversifies the supply risk and reduces costs. Integrating designs through cell-to-pack (CTP), cell-to-chassis (CTC) and other highly consolidated methods improves battery and chassis modularity.
On the other hand, the demand for power batteries as the heart of electric vehicles, driven by the global goal of net-zero carbon emissions, has been growing rapidly, prompting relevant companies to accelerate capacity expansion. In 2023, the global power battery production capacity will surpass the TWh (terawatt-hour, one million megawatt-hour) threshold, and the production value will be nearly US$120 billion. At present, the rapid expansion of the power battery industry chain is constrained by the expansion cycle of vanguard mineral resources such as lithium, cobalt and nickel, which has led to rising power battery manufacturing costs in recent years. With its cost-effective advantage, the global market share of lithium iron phosphate batteries is expected to surpass that of ternary batteries in 2023.
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