[Core Information] ADI is optimistic about quarter-on-quarter growth in the fourth fiscal quarter, and DRAM is expected to increase in overall price

1. ADI Q3 revenue declines year-on-year, Q4 expected to pick up QoQ growth

   Analog chip manufacturer ADI released its financial report for the third quarter of fiscal year 2024, with single-quarter revenue of US$2.312 billion, down 25% year-on-year; gross profit margin was 56.7%, and operating profit fell simultaneously.

   Combined with terminal inventory correction and order margin improvement, ADI officials are optimistic about the turning point of the cycle and predict that revenue in the fourth fiscal quarter will rise to the range of US$2.4 billion, achieving positive quarter-on-quarter growth.At present, the destocking of industry inventories is coming to an end, but macroeconomic and geopolitical uncertainties are still slowing down the overall pace of recovery.
2. DRAM price increases throughout the year are certain, and HBM becomes the core driving engine

   Industry estimates indicate that under the resonance of the explosive demand for AI computing power, the shortage of HBM, and the rapid increase in DDR5 penetration rate,The overall average price of DRAM will increase by 50% to 60% in 2024, it is still expected to maintain an increase of 30% to 40% in 2025.

   The unit price of HBM is much higher than that of ordinary DDR5. With the improvement of yield rate and the increase of AI server installed capacity, HBM's production capacity and output value share continue to rise. It is expected that in 2025, HBM will account for more than 10% of the total DRAM production capacity and its output value contribution will exceed 30%, and it will dominate the price trend of the storage industry in the long term.
3. Q2 global IC company rankings are released, AI chip manufacturers are firmly at the forefront

   The global semiconductor market size in the second quarter of 2024 was US$149.9 billion, +6.5% month-on-month and +18.3% year-on-year.

   The overall revenue of the TOP15 major manufacturers has improved, and the performance of storage manufacturers has significantly improved. SK Hynix, Kioxia, Samsung, and Micron have experienced significant year-on-year growth. NVIDIA continues to top the list, with Samsung and Broadcom ranking second and third, and Intel has slipped to fourth. Only MediaTek and STMicroelectronics have experienced year-on-year revenue declines.Strong demand for downstream AI and servers has driven the industry's continued upward trend in Q3.
4. Xiaomi mobile phone shipments surge, demand for consumer electronics terminals picks up

   Xiaomi's total revenue in Q2 2024 will be 88.9 billion yuan, a year-on-year increase of 32%; global shipments of smartphones will be 42.2 million units, a year-on-year increase of 28.1%, and the consumer electronics terminal market has a clear signal of recovery.Xiaomi currently ranks among the top three in global mobile phone shipments, and the share gap with Apple continues to narrow, driving the demand for upstream mobile phone chips, passive components, and power semiconductors to steadily recover.
5. Wolfspeed's losses continue to expand, accelerating 8-inch SiC production line upgrade

   The latest financial report of silicon carbide leader Wolfspeed shows that single-quarter and full-year losses expanded year-on-year, with production capacity ramping and early investment suppressing profit performance.

   The company is accelerating the optimization of the production line structure, making every effort to release the production capacity of the 8-inch wafer fab, and gradually evaluating the shrinkage of the old 6-inch production line; at the same time, it is reducing capital expenditures, focusing on the automotive new energy SiC track, and relying on the high demand for automotive power devices to seek long-term profit-turning opportunities.