LG is reported to be making substantial investments into improving and upgrading its OLED manufacturing facilities in South Korea - last month we found out about a similar effort underway at Samsung (courtesy of Reuters). Nikkei Asia has today published an article that explores this situation plus a wider context - their findings reaffirm existing claims that Samsung Display has spent $3+ billion on the sprucing up of its Tangjeong factory. LG's modernization bill is smaller at a mere $2.5 billion - this will be spent on creating additional production lines at the company's mainline Paju plant. LG is aiming to increase factory output of medium-sized OLED panels using sixth generation technology.

According to last month's report, industry insiders have suggested that Samsung was ramping up its high end OLED production lines in order to secure substantial component orders from a key client, Apple, with premium display panels destined for fitting on next generation iPad and MacBook products. Reuters posited that LG was not able to fulfil any new requests from Apple at the time - due to its display factories being fully booked and operating at maximum capacity. It seems that LG is now addressing this problem by making necessary and essential upgrades at its Paju P10 OLED facility. A domestic rivalry is only part of the problem, both giant South Korean electronics firms are also keeping a collective eye on other rival manufacturers (operating out of nearby nations).

According to the Nikkei, Microsoft is cutting production for a wide range of its Surface accessories, i.e. keyboards, mice, docking solutions, headsets etc. This is despite the fact that the company has invested heavily into its Surface brand of computers and accessories over the past decade. This is said to be in response to the poor performance of the business unit in Microsoft's last financial report. The Nikkei mentioned that Microsoft is suspending all standalone keyboards in the Surface series and it seems like Microsoft is also looking at calling it quits when it comes to its own branded accessories, or there won't at least be any new models from the company in the foreseeable future.

Microsoft used to be a significant competitor in the keyboard, mouse and webcam market, but with increasing competition from more brands, it seems like the company has been having a hard time making a niche for itself in what can only be said to be a crowded market. Consumer expectations have also changed and most people don't want membrane keyboards any more and are instead buying more expensive mechanical keyboards. Microsoft has also been late to market with many of its Surface computers and have delivered overpriced and underwhelming products, which in turn has led to fewer sales of both the computers and the matching accessories. We'll have to wait and see if Microsoft makes an official announcement as to what will happen to its Surface brand of products, but right now it doesn't look like there's a very bright future for the Surface line of products as a whole.

TrendForce reports that mass production of new server platforms—such as Intel Sapphire Rapids and AMD Genoa—is imminent. However, recent market reports have indicated a PMIC compatibility issue for server DDR5 RDIMMs; DRAM suppliers and PMIC vendors are working to address the problem. TrendForce believes this will have two effects: First, DRAM suppliers will temporarily procure more PMICs from Monolithic Power Systems (MPS), which supplies PMICs without any issues. Second, supply will inevitably be affected in the short term as current DDR5 server DRAM production still uses older processes, which will lead to a convergence in the price decline of DDR5 server DRAM in 2Q23—from the previously estimated 15~20% to 13~18%.

As previously mentioned, PMIC issues and the production process relying on older processes are all having a short-term impact on the supply of DDR5 server DRAM. SK hynix has gradually ramped up production and sales of 1α-nm, which, unlike 1y-nm, has yet to be fully verified by consumers. Current production processes are still being dominated by Samsung and SK hynix's 1y-nm and Micron's 1z-nm; 1α and 1β-nm production is projected to increase in 2H23.

NVIDIA's fresh faced GeForce RTX 4070 graphic card range has not been flying off shelves around the world, and Team Green could be pivoting their approach somewhat after receiving lower than expected sales figures via company reports. Their component suppliers have already mentioned that the entire GeForce RTX 40 family is on a comfortably steady production schedule - with no instructions received from HQ to up the ante. In the latest development this week, individuals with insider knowledge of factory schedules in China have claimed that NVIDIA has informed board partners (AICs) that output for the GeForce RTX 4070 line is getting paused for a month. The temporary cutoff in factory output will allow, they hope, for the currently sitting stock to get cleared out. A substantial surplus of GeForce RTX 4070 cards could disrupt distribution networks and overstock warehouses.

Industry watchdogs have theorized that NVIDIA's board partners are having a difficult time offloading their premium tier RTX 4070 custom cards onto paying customers. The Founders Edition and closer-to-reference models have sold quite respectable numbers according to early analyses, but more expensive options are considered to be too expensive by the customer base. There is apparent crossover in pricing with the fancier GeForce RTX 4070 Ti range, and a savvy buyer will tend toward superior silicon rather than a shiny cooling solution combined with a factory-issued overclock. A computer hardware retailer in the UK, Novatech, has chosen to cut the price of a Palit RTX 4070 Dual model by £40/$50, as reported yesterday. The asking price has since returned closer to RRP - at the time of writing it stands at £579.98.

Two of NVIDIA's providers of Outsourced Semiconductor Assembly and Test (OSAT) services are of the opinion that Team Green is happy to stay the course with its Ada Lovelace GPU production schedule. The backend providers Siliconware Precision Industries (SPIL) and King Yuan Electronics (KYEC) have not been given any new instructions with regard to shifts (up or down) in component assembly output. It is theorized that NVIDIA is aiming to clear any stock backlogs of graphics card models featuring previous generation architecture - namely the second gen GeForce RTX 30-series, built on Ampere.

The retail demand for the newly released GeForce RTX 4070 cards has been mild, to say the least - with plenty of inventory remaining on the shelves in the States. Critical reception of the midweight GeForce RTX GPU has also been middling - many have advised that budget conscience buyers should potentially look elsewhere. The market for discrete graphics card is in a fairly healthy state at the moment, with major production issues and fractured supply chains becoming lesser concerns for electronics manufacturers. NVIDIA has the advantage of being a market leader, and seems to be quite content with proceedings - but their analysts are very likely keeping an eye on the RTX 4070 sales figures. Its products are out and readily available - no need to change direction too sharply.

Samsung Electronics will be cutting back on memory chip production, following a worrying drop in its operational profits. Estimates for the first quarter point to a 96% year-on-year decline - the silicon mega-corporation's lowest profit result in 14 years (since the first quarter of 2009). Samsung's operating profits fell to 600 billion won ($456 million) in January to March 2023, from 14 trillion won the previous year. The company has confirmed that a slump in sales is the main cause behind the smaller margins - with a slow global economy and a drop in demand after the chip shortages of 2020 - 2022. Manufacturers of computer and server equipment have reduced expenditure on procurements of RAM and storage solutions.

In a statement released last week, the company confirmed that it was adjusting its manufacturing output in reaction to the drop in demand: "We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured." Industry analysts in South Korean are foreseeing that Samsung's chip business will post heavy losses (into the billions of dollars) during the first three months of 2023. Samsung is expected to publish detailed financial results later this month. The analysts have spotted similar patterns at other South Korea-based memory chip markers - SK Hynix and Micron have recorded heavy financial losses across recent quarters.

Samsung Electronics has announced that its sub-division, Samsung Display, is planning to invest $3.1 billion until 2026 in Asan, South Korea to manufacture advanced organic light-emitting diode (OLED) display panels. The country's ministry stated that Samsung's next generation of OLED display panels will be integrated into tablets and laptops. There are already rumors swirling that Apple has contracted with Samsung Display to produce parts for a refresh of the MacBook Pro range that is set to debut at some point before 2026.

Industry insiders are claiming that the substantial investment into the company's Asan, South Chungcheong factory will help fulfil orders placed by Apple for iPad and MacBook OLED displays - the North American company has not officially confirmed an adoption of that type of screen technology for these product ranges. Samsung is likely trying to secure a long term relationship with the Silicon Valley behemoth, and at the same time outmaneuver its competitors in South Korea as well as those in neighboring nations. It has been reported that domestic rival LG is currently unable to take on new orders, as its display factories are functioning at maximum production capacities.

Although NAND suppliers have continued to roll back production, there is still an oversupply of NAND Flash as demand for products such as servers, smartphones, and notebooks is still too weak. Therefore, TrendForce predicts that the ASP of NAND Flash will continue to fall in 2Q23, though that decline may shrink to 5~10%. The key to supply and demand returning to a market equilibrium lies in whether NAND suppliers can cut back on production even more. TrendForce believes if demand remains stable, then the ASP of NAND Flash will have an opportunity to rebound in 4Q23; if demand is weaker than expected, then ASP will take longer to recover.

Client SSD: Currently, PC OEM's have managed to liquidate most of their component inventory, and are now gearing up in preparation for mid-year sales events. Suppliers are cutting prices to clear out their inventories of PCIe Gen 3 SSDs, which are gradually being phased out. Meanwhile, prices of PCIe Gen 4 SSDs continue to face downward pressure due to a slow intake of new customer orders. The continuous decline of QLC products in 1Q23 has also dragged down the prices of TLC products, and there is relatively little room for prices to keep falling in 2Q23. While it still remains unclear whether or not demand will recover, TrendForce projects that the prices of PC client SSDs will drop 5~10% in 2Q23.

On Monday 27 March U.S. President Joe Biden invoked the Defense Production Act in order to form a budget of $50 million, to be spent on domestic and Canadian production of printed circuit boards (aka PCBs). This move was deemed as important to matters of national defense, and technology has been cited as key part of North American security efforts. In a memo issued that day, Biden stated that without presidential action under the act: "United States industry cannot reasonably be expected to provide the capability for the needed industrial resource, material, or critical technology item in a timely manner."

PCBs form the basis of vital components that are integrated into military-purpose missiles and radars, in addition to electronics utilized for energy distribution and the nation's healthcare. The President continues to outline the importance of the Defense Production Act: "I find that action to expand the domestic production capability for printed circuit boards and advanced packaging is necessary to avert an industrial resource or critical technology item shortfall that would severely impair national defense capability."