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Realme 5G down to $145 ** 80M 5G subscribers in Q2, 100M August prove 5G is real.** 5G Worldwide: Saudi first, USA last** 5G Phones $199-260
China is > 70% of 5G as subs pass 80M ** Primary: Cost per bit of wireless is falling at a ferocious rate
5X Advance for Africa with Massive MIMO ** Spectrum Marvell: 5 nm 20-40% better ** $400 TCL REVLL 5G at T-Mobile: Here comes 5G in the USA
$Hundreds of millions in extra chip costs prove Open-RAN not quite ready
IHS forecasts a 7% drop in 2019 chip sales as prices plummet in memory, blockchain miners disappear, and mobile phone sales drop. This is consistent with many other data points, such as TSMC's quarterly earnings. Lower prices for memory chips and most others are holding down equipment pricing, including PC's and phones.
Four sectors stand out in the chip business.
5G wireless chips can only be produced on TSMC's 7-nanometer production line or by Samsung, mostly for its own use. Huawei and Qualcomm are producing 5G chips with reasonable yields at TSMC. Six months ago, 5G phones were not expected before the summer because Apple had bought out most of TSMC's 7 nm production. The decline of iPhone sales opened some capacity and Qualcomm is supplying chips to Xiaomi, Oppo, Vivo, and ZTE. China Unicom is offering phones from those four, Huawei, and I believe Samsung.
Qualcomm's prices are reasonable enough that Xiaomi announced 5G phones at US$600, which others will match. Intel is now out of the market. MediaTek and UNISOC are behind, so Qualcomm has little incentive to adjust prices. IHS emails me:
In the near term, our analysts don’t see much pressure on BOM pricing due to the strong Qualcomm market presence but in the longer term, BOM prices will be under pressure as soon as China Mobile comes online with their 5G SA network. It is also unlikely that semiconductor manufacturing (of application processors and modems) will drive the market into oversupply.
Memory chips have been wildly overpriced for several years compared to the historical and cost trends. It appears that cartel-like pricing is breaking down somewhat. The Chinese have put on the table US$100B for memory chipmaking but that effort is going slowly. Samsung made billions on high prices but the last quarter was far down.
In mainstream chips, overcapacity should bring down prices in any competitive market. TSMC for now has enough 7 nm capacity that AMD CPUs and GPUs are coming down the line. Except for 7 nm, there's more than enough supply.
Specialities, such as radio frequency chips, each have distinct markets.
Here's more detail, direct from IHS.
Semiconductor Market Lurching into Worst-in-a-Decade Downturn in 2019, IHS Markit Says |
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Chip forecast takes a 10-percentage-point downside swing Conditions in the global semiconductor market have deteriorated rapidly since the start of the year, with business information provider IHS Markit (Nasdaq: INFO) slashing its 2019 growth outlook by more than 10 percentage points. The worldwide microchip industry is set to suffer a 7.4 percent drop in revenue this year, according to the latest figures from the IHS Markit Application Market Forecast Tool (AMFT). Revenue will fall to $446.2 billion in 2019, down from $482.0 billion in 2018. This represents a major swing in the market outlook compared to the previous forecast in December, which anticipated the market would expand by 2.9 percent this year. A 7.4 percent decline will mark the semiconductor industry’s biggest annual percentage decrease since the Great Recession year of 2009, when chip sales plunged by nearly 11 percent, as illustrated in the figure. “After the chip industry attained a heady revenue expansion of 15 percent in 2018, many semiconductor suppliers in early 2019 remained optimistic that they could achieve modest growth this year,” said Myson Robles Bruce, research manager, semiconductor value chain, at IHS Markit. “However, the chipmakers’ confidence quickly transformed into apprehension as they witnessed the depth and ferocity of the current downturn. The latest data indicates the semiconductor business now is destined for its worst year in a decade.” The chips are down Recent concerns over DRAM market conditions, a harsh drop in average selling prices, and weak demand all served to slash DRAM revenue projections for 2019. In the NAND flash memory space continued oversupply has been responsible for an aggressive erosion in pricing. Another segment set for steep decline this year is the logic application-specific standard product (ASSP) where demand is driven by the mobile handset business, a market that is struggling to generate due to nearly universal saturation. A silicon silver lining |