WEEKLY NEWS 010

1. Passive Component Market Recovery Driven by AI Demand

2. ON Semiconductor Acquires Allegro for $6.9B to Strengthen Smart Power Market

3. NAND Flash Market Adjusts, Expected to Rebound in H2 2025

4. Intel Delays Ohio Factories, Chip Manufacturing Faces Challenges

5. Foxconn Expands AI Server Plant in Mexico Despite Challenges

1. Passive Component Market Recovery Driven by AI Demand

Yageo has observed signs of recovery in the multilayer ceramic capacitor (MLCC) market, with easing price pressures. The company expects a positive market trend in 2025, driven by increasing demand for high-performance computing, including AI servers. The demand for tantalum capacitors is also surging, further boosting business growth. Japanese manufacturers Murata and Taiyo Yuden are similarly optimistic, with Murata reporting a 7% increase in orders last quarter and predicting AI server-related demand to double by 2025. Taiyo Yuden has raised its 2024 financial forecast, expecting revenue and profit to exceed previous estimates.

Additionally, Japan's electronic component shipments continued to grow, with global shipments rising 6% year-over-year in December 2024. Notably, passive component shipments saw an 11% increase. These trends indicate a solid recovery in the passive component industry, with an optimistic outlook for the future.

Comment: The passive component market is recovering, with easing MLCC price pressures and rising AI server-driven tantalum capacitor demand. Japanese manufacturers remain optimistic, with global shipments increasing and the market entering a positive cycle.

2. ON Semiconductor Acquires Allegro for $6.9B to Strengthen Smart Power Market

ON Semiconductor disclosed on March 5 its proposal to acquire Allegro MicroSystems for approximately $6.9 billion. The company has been in discussions with Allegro for the past six months, raising its offer from $34.50 per share in September 2024 to $35.10 per share. Founded in 1990, Allegro is primarily owned by Japan’s Sanken Electric and specializes in sensors, power ICs, and photonics semiconductors. ON Semiconductor aims to enhance its position in intelligent power and sensor solutions for automotive, industrial, and AI data centers through this acquisition. The company has already secured financing and is prepared to expedite the deal.

Comment: ON Semiconductor raises its acquisition bid to merge with Allegro, strengthening its smart power and sensor business for automotive, industrial, and AI data centers. The deal boosts competitiveness and market expansion.

3. NAND Flash Market Adjusts, Expected to Rebound in H2 2025

According to a report released by TrendForce on March 3, the NAND Flash market underwent adjustments in Q4 2024 due to inventory clearance by PC and smartphone manufacturers, as well as supply chain realignments. Despite these shifts, total industry revenue remained at $16.52 billion.Looking ahead to 2025, while the market may still experience seasonal effects in the short term, suppliers are actively optimizing production capacity to align with demand. With the growing adoption of AI, data centers, and smart devices, the NAND Flash market is expected to regain momentum in the second half of the year. Production adjustments by suppliers are expected to help restore supply-demand balance, laying the foundation for a market recovery and ensuring long-term growth potential for the industry.

Comment: The NAND Flash market declined in Q4 2024 due to inventory adjustments. Despite production cuts, Q1 remains weak, but recovery is expected in H2 2025.

4. Intel Delays Ohio Factories, Chip Manufacturing Faces Challenges

Intel has postponed the completion of its two new semiconductor factories in Ohio, with the first now expected to be finished by 2030 and the second by 2031. Originally scheduled for 2025, the $28 billion project has been delayed due to financial constraints and management changes. Despite receiving subsidies from the U.S. government, Intel has also deferred its plans for large-scale semiconductor manufacturing facilities in Germany and Poland. Industry analysts highlight the ongoing dependence of U.S. chip manufacturing on TSMC and cite policy uncertainties as additional risks. Investments from companies like Samsung have also been affected by these challenges.

Comment: Intel delays factory construction due to financial and management issues, highlighting U.S. chip manufacturing’s dependence on TSMC. Government subsidies offer limited relief, leaving uncertainties ahead.

5. Foxconn Expands AI Server Plant in Mexico Despite Challenges

Foxconn is set to build the world's largest AI server assembly plant in Jalisco, Mexico, with a $900 million investment featuring NVIDIA’s GB200 AI chips. The project includes expanding an existing factory in El Salto and constructing a new facility, expected to be completed within a year and operational by early 2026. Despite former U.S. President Trump’s threats to impose a 25% tariff on Mexican imports, Jalisco’s Governor Lemus stated that investments are increasing rather than slowing down. The local government is expediting approvals and offering financial incentives to support the project. The region’s industrial parks are in high demand, with 60% of available land already pre-leased.

Comment: Foxconn invests $900M to build the world's largest AI server plant with NVIDIA GB200 chips. Despite tariff risks, investment continues, and demand for industrial land in Mexico remains strong.