ELECTRONICS NEWS HIGHLIGHT 27/06/2022

1. TRENDFORCE: DRAM PRICES TO DECLINE 3-8% IN Q3 2022

Consumer electronics purchasing has been adversely affected by factors such as the Russia-Ukraine conflict and escalating inflation. Products related to DRAM, such as laptops and TVs, are facing a decline in demand. Furthermore, due to relatively high levels of DDR3 inventory and costs, purchasing power has clearly weakened. The demand for both DDR3 and DDR4 is predicted to decrease simultaneously, and market reserves are expected to continue weakening. Korean manufacturers are not altering their plans to exit the DDR3 supply chain; however, in Q2 2022, companies from China and Taiwan will continue to enhance their new production capacities. With diminished demand and increased supply, sellers lose their advantage, leading to a depreciation of DRAM prices below the support level in Q3 2022. DDR3 and DDR4 prices are forecasted to decrease by 3-8% compared to the same period.

2. CHIP MCU MANUFACTURERS HOLD 82% GLOBAL MARKET SHARE

The top 5 largest microcontroller chip manufacturers are: NXP, Microchip, Renesas, STMicro, Infineon. The top 5 MCU suppliers develop and sell based on ARM architecture. These companies hold 82.1% of the MCU sales worldwide in 2021, compared to 72.2% in 2016, indicating a growing trend in MCU sales volume. The increase in market share for the largest MCU suppliers has been driven by significant acquisitions and mergers since 2016.

3. ALLEGRO ANNOUNCES PRICE INCREASE

Allegro also notes that the production costs have risen due to increased input costs from supply chain partners. Furthermore, it is challenging to boost new capacity to meet demand in the next 6 to 24 months, resulting in significantly higher costs than previously forecasted. Allegro emphasizes that these costs have exceeded the company’s tolerance levels at current pricing. Therefore, Allegro has decided to raise prices on all product lines, with the expected effective timeframe from June 1, 2022, to August 1, 2022.