In the development history of the semiconductor industry, market fluctuations are quite common. Whether it was the relatively calm year of 2023 or the optimistically toned year of 2024, several chips stood out and became hot-selling products.
These chips may not have used cutting-edge manufacturing processes, nor do they possess extremely high computing power levels, but they have been favored by the market due to their unique design concepts, precise market positioning, or excellent cost-performance ratio.
01
Top 10 Chip Search List of 2023
According to the full-year chip search data of 2023, from its vast database covering more than 90 million models and over 4,000 brands, ten of the most popular chip models were selected.
Looking at the chip categories, the Top 10 search list includes MCUs, storage, power ICs, interface ICs, and communication chips. In terms of chip brands, international veteran chip giants directly dominate the list with their strong strength, including STMicroelectronics, NXP, Microchip, Texas Instruments, ON Semiconductor, Analog Devices, and Silicon Labs, occupying 8 out of the Top 10. In addition, the two domestic brands, GigaDevice and Shanghai Belling, have made it to the list with their strong storage products.
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In the Top 10 list, there are two power management chips, one from NXP and the other from ON Semiconductor; three MCUs, one from STMicroelectronics, Microchip, and Texas Instruments; one communication network telephone IC, from Silicon Labs; two storage chips, one from GigaDevice of China and the other from Shanghai Belling; two interface ICs, one from Analog Devices and the other from NXP.
Looking at the current price situation, the unit prices of the two power management ICs have slightly increased in 2024, the prices of the three MCUs continue to decline, the unit price of NXP's interface IC has also been reduced, and the prices of the other products are almost relatively stable.
02Top 20 Searched Chips in the First Half of 2024
The top 20 searched chip rankings for the period January to June 2024 indicate that a majority of the products in the top search results are still power management chips.
The top three material models are UC3842, LM358, and TL431. UC3842 is a Pulse Width Modulation (PWM) controller used for switching power supplies and DC/DC converters. Initially, UC3842 was designed and produced by Unitrode Corporation, which was later acquired by TI (Texas Instruments). As the original design's patent rights expired, other manufacturers were able to produce and sell similar products, making it a standard choice in the industry.
By categorizing the components, power chips account for the largest proportion in the overall statistics (39.02%), followed by discrete components such as transistors and diodes (31.71%), with other types having a lower share. Power chips, amplifiers/comparators, optocouplers, motor drivers, and even, in a broad sense, discrete components, are all analog components.
So, why are these categories of products so favored?
03
Power Management Chips Weather the Winter
In the 2023 top 10 searched chips list, the power management chips that made the list include NXP's battery management chip SC33771CTA1MAE and ON Semiconductor's DC/DC UC3842BNG. Both are internationally renowned and established chip manufacturers.
The power management chips in the top 20 searched chips list for the first half of 2024 include UC3842, 3842, 3842B, TL494, LM317, AMS1117, etc. The manufacturers covered include: TI, ON Semiconductor, ST, NXP, TE Connectivity, Microchip, UTC, etc.The massive shipment volume of power management chips is closely related to their extensive penetration and deep integration in a variety of application scenarios.
The application scenarios of power management chips are very rich, covering many fields and involving all aspects of people's work and life, with a very broad market space. These applications include but are not limited to:
Different applications have different performance requirements for power management chips. Automotive and industrial applications have higher requirements for chip stability and quality; while consumer electronics have relatively lower requirements for power management chips, but are more sensitive to price. Taking smartphones as an example, the power management chips and modules inside them have higher technical barriers due to their higher requirements for size, stability, and consistency, and the supply chain threshold of mobile phone manufacturers is also very high.
At present, the power management chip market presents a "tripartite" competitive pattern: the first echelon represented by overseas giants such as Texas Instruments, Analog Devices, Infineon, NXP, Skyworks, STMicroelectronics, etc.; the second echelon represented by domestic power management chip listed companies such as Jingfeng Mingyuan, Shengbang Shares, Fuman Micro, Mingwei Electronics, Shanghai Beilin, Lixin Micro, Silan Micro, Weier Shares, Xinpeng Micro, Di'ao Micro, etc.; and the third echelon represented by other domestic small and medium-sized power management chip enterprises.
Among them, overseas giants such as Texas Instruments, Analog Devices, and Infineon maintain a leading advantage in product line completeness and overall technical level, accounting for more than 80% of the global power management chip market share, especially in the high-end market field, with absolute say. Taking the foreign leading company Texas Instruments as an example, it has 16,000 types of products, with the most extensive industry segmentation and application coverage.
At present, domestic power management chip manufacturers have mostly entered the civilian consumer market first, gradually replacing the market share of foreign enterprises in the field of low-power consumer electronics, and their products are also developing from low power to medium and high power. With the improvement of power management chip design technology level, domestic brands are gradually advancing into the mid-to-high-end market.
How did power management chip manufacturers fare in 2023? In the first half of 2024 that has just passed, how are these manufacturers doing?
The term "involution" is one of the key words that runs through the power management chip market in 2023. With the top analog chip manufacturer Texas Instruments comprehensively reducing product prices in the Chinese market in May last year, domestic power management chip manufacturers are under dual pressure on revenue and gross profit.
For this track, the total shipment volume is really high, and the involution is also real.Domestic power management chip companies are not only facing the pressure exerted by international giants, but also a series of companies from other fields such as RF and storage are continuously entering this field.
Time has come to 2024, with the inventory liquidation of consumer electronics and other industries nearing the end, demand is gradually warming up, and the performance of analog chip companies in Q1 began to be repaired, and PMIC orders rebounded.
From the perspective of revenue and net profit growth, in Q1 2024, companies such as Xiding Micro, Saiwei Microelectronics, Nanxin Technology, Xinhai Technology, Aoji Technology, and Shengbang Shares have achieved high year-on-year growth in revenue, mainly benefiting from the recovery of consumer demand, especially the recovery of smartphones. In terms of net profit growth, Saiwei Microelectronics, Nanxin Technology, Tiande Yu, and Aiwei Electronics have seen comprehensive improvement year-on-year, and profits related to smartphone business have rebounded rapidly.
Recently, Saiwei Microelectronics announced that the company is expected to achieve operating income of about 167 million yuan in the first half of 2024, a year-on-year increase of about 97%; the net profit attributable to the parent company is about 30.5 million yuan, a year-on-year increase of 570%. The announcement stated that during this reporting period, affected by the recovery of terminal demand, the company's business scale has expanded, continuously expanding the product line, launching new products with market competitiveness, the company's orders are full, and the main business is growing steadily.
Saiwei Microelectronics' main business is the research and development and sales of analog chips, with the main products centered on battery management chips, and extending to more types of power management chips, including battery safety chips, battery measurement chips, and other chips such as charging management.
Nanxin Technology is expected to achieve operating income of 1.232 billion yuan to 1.302 billion yuan in the first half of 2024, a year-on-year increase of 86.51% to 97.11%. The net profit attributable to the parent company for the first half of the year is expected to be 203 million yuan to 221 million yuan, a year-on-year increase of 101.28% to 119.16%. Nanxin Technology stated that in the first half of 2024, affected by the recovery of terminal demand, the company's business scale has expanded, continuously launching products with market competitiveness, the company's orders are full, and the main business is growing steadily.
Although the new quarterly financial reports released by analog chip giants Texas Instruments and ADI have a slight decline in revenue, the positive signals conveyed in the financial reports show that the adjustment of customer inventory is nearing the end, and chip orders have begun to recover. The market generally believes that the demand for analog chips is gradually improving, especially the industrial and automotive chip markets have shown signs of recovery, and as a core part of the analog chip field, the market demand for power management chips is also gradually warming up. Industry insiders predict that in the next few quarters, the power management chip market is expected to usher in a typical seasonal demand increase.
In addition, Huahong Company revealed in the recent institutional research that although its MCU orders in the first quarter of 2024 are still weak, the overall capacity utilization rate has increased, and order demand has warmed up in the past two months, especially in the CIS and power management chips related to mobile phones and AI-related products.
04
MCU is turning to the demand cycleIn the 2023 chip search hot TOP10 list, there are three MCU products that made it to the list, all of which are "internet-famous chips" that have been on the MCU hot list for many years. They are STM32F103C8T6 from STMicroelectronics, MSP430F135IPMR from Texas Instruments, and PIC24FJ32GA002-I/SO from Microchip. The three companies that made it to the list are still mainly traditional overseas MCU manufacturers.
In the first half of 2024, the chip search hot TOP20 list mainly features MCU products from STMicroelectronics, especially the STM32 series, which is based on the ARM Cortex-M core and has a variety of different performance levels and functional options. The analysis suggests that the STM32 series is generally considered to have a high cost-performance ratio; STM32 is widely used in open-source hardware projects, such as Arduino-compatible development boards, which increases its popularity among hobbyists and startups.
However, NXP, Microchip, Renesas, and other domestic brands also hold an important position in the MCU market. Domestic brands such as HuaDa Semiconductor and GigaDevice are also gradually rising, especially in the Chinese market, with local advantages such as better localized services and support, lower price points, and the ability to respond to domestic policies and market trends.
Looking at the current MCU market, as 2024 enters the second half, the MCU chip market is shifting from a destocking cycle to a demand cycle. It is reported that the Taiwan-based MCU factory, Winbond, notified its agents at the beginning of this year to raise the prices of OTP MCUs (blank MCUs that cannot be reprogrammed). The spot price of 32-bit MCUs from mainland China's GigaDevice also showed a slight rebound. The company stated that the biggest challenge for its MCU business in 2023 was the destocking of industrial customers, which had a significant impact on overall revenue. In 2024, the inventory of industrial customers will basically be destocked and start to order normally.
For this price increase, industry insiders believe that due to the accumulation of inventory, many MCU factories almost sold at a loss to clear inventory actively. The price of general-purpose MCUs has already reached a new low point, and in the first quarter of this year, the price quotes for some products began to rebound, and some products also appeared in urgent orders with super parts (HOT RUN), and the market is expected to gradually return to normal. In general, the market has begun to appear, and some manufacturers decide their pricing strategy based on their inventory status and customer demand. Although the price increase is not universal, it is still a positive trend.
Some industry insiders predict that after next year's Q2, as inventory returns to a reasonable level and the order base is not high, the price of MCUs may rebound significantly.
05
Memory chips start to have a "good life"
In the 2023 list, there were two storage products on the list, but there were no storage products in the TOP20 list in the first half of 2024.
However, as a component that accounts for a high proportion of semiconductor sales, its attention has always been high.By the end of 2022, the consumer electronics market faced a comprehensive downturn, with the storage market experiencing a severe oversupply. The two main types of memory chips, DRAM and NAND Flash, saw a significant backlog, causing market prices to plummet. Manufacturers had to resort to price reductions and promotions, resulting in a substantial decrease in profits for all.
This period of hardship persisted until the second half of 2023.
However, since the end of last year, the prices of the main memory chip products have stabilized, and the market has begun to show signs of recovery. This is mainly attributed to the explosion of generative AI and the rebound of the consumer electronics market.
On July 25, South Korea's memory chip giant SK Hynix released its financial report for the second quarter of the fiscal year 2024. Benefiting from the strong demand for advanced memory driven by AI, the company's performance has surged across the board. The second-quarter revenue was 16.4 trillion won (approximately 11.8 billion US dollars), a 125% increase compared to the same period last year, breaking the single-quarter historical record of 13.8 trillion won set in 2022.
SK Hynix's operating profit also reached 5.4 trillion won, not only turning losses into profits but also returning to the 5 trillion won level after six years. The net profit was 4.12 trillion won, which not only significantly turned losses into profits compared to the previous year but also increased by 115% compared to the first quarter of this year.
It's not just SK Hynix; the recent financial performance of the "memory trio" - Samsung and Micron - is particularly dazzling.
Samsung disclosed its financial report for the second quarter of 2024 on July 31. The data shows that its sales reached 74.07 trillion won, which is about 388.942 billion yuan in RMB, and the net profit was 9.64 trillion won, equivalent to about 50.62 billion yuan in RMB. At the same time, the operating profit also increased significantly to 10.44 trillion won, which is about 54.82 billion yuan in RMB. According to the financial report, Samsung Electronics is optimistic about the market trend in the second half of the year, especially looking forward to the memory demand for HBM, DDR5, and SSD. For this reason, the company plans to further expand production capacity to increase the sales share of HBM3E.
Previously, Samsung had already predicted in an announcement that the sales and operating profit for this quarter would reach 74 trillion won and 10.4 trillion won, respectively. The actual results not only met expectations but even exceeded them.
Micron's performance report for the third quarter of the fiscal year 2024 (March-May 2024) shows that the revenue for the quarter was 6.811 billion US dollars, a 17% increase compared to the previous quarter and an 81.5% increase year-on-year; under Non-GAAP, the operating profit was 941 million US dollars, and the operating profit margin increased from 3.5% in the previous quarter to 13.8%; the net profit was 702 million US dollars, a 47% increase compared to 476 million US dollars in the previous quarter.
Micron stated that the third quarter's revenue, gross margin, and earnings per share were all above the upper limit of the guidance range. Thanks to the continuous improvement in the industry's supply and demand situation, Micron has raised product pricing and optimized the product mix, which has improved its profitability in the terminal market, especially in the AI-related product categories, where profits are considerable. Micron expects prices to continue to rise in 2024, and the fiscal year 2025 will achieve a considerable revenue record, and significantly improve profitability based on the continuous transformation towards a high-profit product mix.The aforementioned three giants account for more than 90% of the global market share, and their significant performance growth has also pulled a host of storage manufacturers in the industry chain out of the "hard times" of product price drops and halved profits. The profits of A-share listed companies Jiangbolong, Langqi Technology, and ZY Innovation have all seen substantial growth this year.
Morgan Stanley's latest research report has raised the expected price increase for DRAM and NAND chips in Q3 of this year, from the original expectation of 8% and 10% to 13% and 20%. Under these circumstances, the market's expectations for the storage industry have further increased.
06
Discrete devices begin to increase in price
In the top search list of chips in the first half of 2024, several discrete device products appeared.
The product attributes of discrete devices are somewhat similar to those of power management chips, and this product also belongs to a type of product with a wide range of applications and large usage.
Power semiconductor discrete devices mainly serve the functions of power control, power amplification, power switching, line protection, and rectification. They are the foundation and core components of power electronic application equipment, widely used in consumer electronics, network communication, industrial control, and new energy vehicles.
At present, China has become an important global semiconductor discrete device manufacturing base and the largest market for semiconductor discrete devices globally. The main enterprises in the discrete device market include CR Micro, Silan Micro, Yangjie Technology, Hua Wei Electronics, Jiejie Microelectronics, etc. Currently, the marketization degree of China's power semiconductor discrete device industry is relatively high, the industry concentration is relatively low, and the competition is fierce. Although Chinese power semiconductor discrete device companies started later than foreign companies, they have accumulated relevant technical experience through long-term development, and the technical gap with foreign companies is narrowing further.
According to the "2024 Q2 Chip Market Report" released by Fu Chang Electronics, the market situation for discrete devices in Q2 of 2024 is stable, and the delivery period has further decreased. Specifically, from the data of manufacturers such as Diodes, Infineon, ON Semiconductor, Nexperia, Vishay, ST, etc., the delivery period for low and high voltage MOSFETs continues to improve, and the market supply is sufficient. In addition, the delivery period for IGBT products from Infineon and ON Semiconductor has also been shortened.
At the beginning of this year, several discrete device manufacturers announced price increases, including Jiejie Microelectronics, Sanlian Sheng, and Yangzhou Jingxin Microelectronics, mainly focusing on diodes, transistors, and medium and low voltage MOS tubes. In addition, some IDM power semiconductor manufacturers also raised the prices of some products in May this year. For example, Yangjie Technology stated that the company determined the price increase based on market supply and demand, cost factors, etc., and the company's product prices have been adjusted upwards, showing an overall upward trend. CR Micro also had price adjustments for some MOSFET and IGBT products in Q2.Overall, the chip market in 2024 has emerged from the slump of 2023. With the accelerated advancement of global digital transformation, as well as the vigorous development of emerging technologies such as artificial intelligence, the Internet of Things, and cloud computing, chips, as the core driving force behind these technologies, have seen a surge in demand, leading to a persistent situation of supply not meeting demand. Major chip manufacturers have increased their production capacity and introduced a variety of technological innovations, not only meeting the upgrade needs of traditional industries but also providing strong support for the rise of emerging industries.
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