Samsung’s renewed Galaxy A05 and Galaxy A15 models topped the list for Q2 2024, continuing the performance seen by their predecessors Galaxy A04 and Galaxy A14.
Motorola’s refreshed low-price devices managed to maintain three spots for the brand in the list while growing sales in double digits YoY.
Xiaomi’s Redmi Note 13 and Redmi 13C models joined the top 10 following the brand’s growth in Q2 2024.
The iPhone 13 successfully replaced the iPhone 11 in top 10 even as its sales declined 10% YoY compared to the iPhone 11 in Q2 2023
LATAM’s top 10 best-selling smartphones accounted for more than 30% share in the region’s total sales for Q2 2024, 300 basis points lower than Q2 2023. This can be attributed to the entry of more smartphone brands in the market, increasing the competition for top spots. However, the top-10 sales volume represented a 9.8% increase when compared to Q2 2023.
According to Counterpoint’s LATAM shipment data for Q2 2024, a low base in Q2 2023 and the Chinese brands’ activity boosted the overall market’s growth in the region during the quarter. In the grey market, the Chinese brands’ aggressive pricing strategy is expected to prove favorable for them.
Samsung lost two spots to Xiaomi in the top-10 list. The Redmi Note 13 replaced the Galaxy A54 as customers looked for lower prices, while the Redmi 13C took the remaining sales of the Galaxy A03 Core. Motorola and Apple kept the same number of spots from the year-ago period.
Samsung’s Galaxy A05 and Galaxy A15 series were the devices with most promotions during LATAM’s festival season covering Mother’s Day and Father’s Day. Also, customers were attracted to the Galaxy A05’s bigger display when compared to the Galaxy A04, and the Galaxy A15’s AMOLED screen.
Motorola’s performance on the list was driven by its strategy to reduce the size of its portfolio to focus on a few selected models. The Moto G24 comes as a natural replacement of the Moto E22, while the Moto G04 is the brand’s bet for the low-end price band. The strategy to introduce 5G in affordable models like the Moto G54 also contributed to the brand’s good show.
Xiaomi had been in and out of the top-10 list during the last year, but reached its biggest presence in Q2 2024. The Redmi 13C is sold in the <$100 price segment, the sweet spot for low-end users in the region. The Redmi Note 13 falls in the $150-$249 price band, preferred by customers looking to upgrade from the Redmi A series.
Carriers in the region have started selling 5G plans, which may trigger a 5G-driven smartphone replacement cycle. Major OEMs already have at least a couple of devices each in the market. In the Q2 2024 top-10 list, the Moto G54, Galaxy A35 and iPhone 13 models were 5G. Further, 5G sales volume in the top 10 grew in triple digits YoY and will continue to grow as more smartphone brands refresh their portfolios for the region. For example, Apple is reducing its supply of 4G smartphones in the region while pushing 5G models.
TCL is endorsing its NXTPAPER display technology as a key differentiator for its smartphones and tablets to address eye strain caused by increasing screen time.
5G connectivity is included but adds little to the device’s overall usability – at least for users in mature markets where the device is likely to be a secondary device.
Carrier data device pricing remains prohibitive and can add significant cost to a potential purchase, especially in the mid-range segment. More flexibility in pricing, data allowance and accessibility of standalone plans would go a long way to drive adoption.
To stand out in the tablet market’s crowded lower-mid-range segment is no small feat. TCL, known for its willingness to chart a different course than the competition, has made a compelling move with the launch of the TCL TAB 10 NXTPAPER 5G connected tablet for Verizon in the US. The TAB 10 is not just another addition to the 5G-connected tablet market. Rather, the device features TCL’s unique NXTPAPER display technology, setting it apart from the competition.
TCL has been focusing on NXTPAPER over the last year or so. The key selling point of the technology is the ability to mimic paper-like texture and change color settings dynamically to create the feel of an e-reader and minimize eye strain.
The benefits of the technology are clearly noticeable when using the device. Simultaneously, the challenges the form factor continues to face are also not hard to miss, particularly in the way carriers continue to try to monetize integrated 5G connectivity.
NXTPAPER – Standout Branding Opportunity
The TCL TAB 10 NXTPAPER 5G’s standout feature is its NXTPAPER display technology. Unlike traditional LCD or OLED displays, NXTPAPER combines a multi-layered screen with a reflective layer that reduces glare and mimics the experience of interacting with an e-ink reader, like Amazon’s Kindle. The technology enhances readability by filtering out harmful blue light and minimizing eye strain. Blue light strain is a challenge many OEMs have been trying to address across smartphones and tablets. TCL’s unique solution is based on its in-house capabilities as a display maker.
The innovative technology allows users to toggle between a traditional color display and two e-ink display modes – one with color and one for black and white viewing. This makes the TCL TAB 10 NXTPAPER 5G especially attractive to students and families who need a device that can handle a variety of tasks and app use cases. A benefit of the viewing modes is that Android apps continue to function as intended, just adjusted for the color theme – including watching videos and changing the display mode with a video rolling in the background.
TCL’s Strategic Positioning in the Mid-range Market
TCL’s integration of NXTPAPER technology in the TAB 10 5G is a strategic move to differentiate itself in the saturated lower mid-range market. At Verizon, the tablet costs $239.99, or can be purchased via a payment plan, like for smartphones. Users will not find high-powered cameras or build quality of a premium tablet. The integrated haptic feedback is harsh and distracting. The bezels are large and do not look as modern as the integrated 5G connection would suggest the device to be.
However, the changing display modes provide enough of a new user experience to keep consumers engaged with the device for some time. The ability to turn longer online articles into e-ink books proved to be an enjoyable experience and changes how users interact with text. For children’s texts, the color e-ink mode creates a physical book-like experience.
The anti-glare characteristics of the display worked to an extent but did not completely solve the issue. In bright light, there still were instances where visibility was limited, just like with regular displays.
The Challenge of 5G Connectivity
One of the standout features of the tablet, 5G connectivity, is also one that creates hurdles for buyers. The tablet is compatible with Verizon’s network and buyers can add it to an existing Verizon phone plan for as low as $20/month, before other discounts, for unlimited data access. However, non-Verizon subscribers have to effectively subscribe to one of Verizon’s Unlimited plans, usually meant for phones, for $90/month.
For buyers of a mid-range tablet, even an add-on discounted $10/month access fee to other phone plans attaches $120 per year to their bill – on a device that costs under $240 outright. Combined with generous hotspot allowances on phone plans, this pricing dynamic illustrates why carriers and OEMs continue to struggle to make 5G a key feature for tablets, and by extension laptops as well. Adding 5G connectivity to a tablet, especially in mature smartphone markets, remains expensive and does not solve problems for users.
Conclusion
The TCL TAB 10 NXTPAPER 5G represents TCL’s commitment to innovation, especially in display technology. By leveraging its proprietary NXTPAPER display technology and combining it with 5G capabilities, TCL’s TAB 10 tries to address a number of user pain points – some more so than others.
The NXTPAPER technology works to turn the tablet into an e-ink reader, with advanced capabilities. The display reduces eyestrain and also makes content more visible in bright sunlight.
However, 5G connectivity does not add enough value to warrant the costly data add-on for existing Verizon users. For new users, purchasing a mid-range tablet and opening a new line of service with Verizon would cost over $90/month – negating the affordability of the tablet and posing as key hurdles to 5G adoption in mature smartphone markets in other device form factors.
TCL’s approach to the tablet space positions the company well as an affordable alternative to Samsung and Apple. However, carrier pricing strategies remain a key hurdle and TCL should embrace other retail channels to expose more potential buyers to one of its key differentiators in smartphones and tablets – its NXTPAPER display technology.
Qualcomm’s latest Snapdragon processors power over 200 smartphones, PCs and XR devices, establishing a cross-platform hardware ecosystem.
Qualcomm’s AI hardware and software technologies make Snapdragon devices synonymous with advancement.
Qualcomm reaches out to gaming, esports and sports fans to promote Snapdragon as an AI and premium experience of choice.
During the 2024 ChinaJoy event, Qualcomm, for the fifth time, set up a Snapdragon-themed pavilion with its industry partners including smartphone and laptop manufacturers, telecom operators, gaming studios, e-commerce platforms and automotive companies to showcase cutting-edge technology and futuristic digital entertainment experiences.
The Snapdragon platform has powered a wide range of products, including smartphones, PCs and XR devices. To date, over 100 flagship smartphones featuring the Snapdragon 8 Gen 3 have been released, along with more than 20 PCs equipped with the Snapdragon X series and over 80 XR devices equipped with the Snapdragon XR series processors. Besides, the Snapdragon platform also supports tablets, wearables, handheld gaming consoles, connected automobiles and other terminal devices. The vast array of terminal devices, combined with Snapdragon Seamless technology which enables an exceptional experience for cross-platform applications, marks Qualcomm’s achievement of a massive hardware ecosystem and its pursuit of creating greater value from it.
Source: Qualcomm
AI applications have inevitably become the key factors in creating this greater value. Qualcomm has both hardware and software technologies that enable intelligent computing everywhere. The Qualcomm AI Engine includes the Hexagon NPU, Adreno GPU, Qualcomm Kryo or Qualcomm Oryon CPU, Qualcomm Sensor Hub, and memory subsystem, which constitute the heterogeneous computing architecture enabling fast and efficient on-device AI execution. On the software side, Qualcomm AI Stack enables OEMs and developers to create, optimize and deploy AI applications on Qualcomm products across different platforms, fully harnessing the performance of the Qualcomm AI Engine. These software and hardware capabilities significantly enhance the potential for AI innovation on the Snapdragon platform, establishing the Snapdragon brand as synonymous with top-tier experiences.
In addition to the continuous innovation in technology, Qualcomm has reached out to both traditional sports and the emerging field of esports, elevating Snapdragon brand awareness to a broader audience. Starting from the 2024-25 season, Snapdragon will take center stage on the new Manchester United kits. By sponsoring this globally influential club, Qualcomm aims to increase Snapdragon’s brand visibility to billions of football fans across the world. Moreover, with the deepening partnership, Qualcomm can integrate technology with traditional sports to bring innovative applications. For example, Qualcomm has partnered with the Mercedes-AMG PETRONAS F1 Team to feature Snapdragon brand and create a garage tour VR application that enables fans to explore the exclusive garage with a vivid experience.As for esports, Qualcomm has partnered with ESL to host the Snapdragon Pro Series, one of the largest mobile esports tournaments in the world. During the 2024 ChinaJoy event, Snapdragon drew attention by hosting matches of popular mobile games. It also announced a partnership with JDG, a top-tier esports club in China, bringing cutting-edge mobile technology to it. By deeply engaging with China’s mobile gaming ecosystem, Qualcomm has significantly enhanced Snapdragon’s brand recognition in the Chinese market.
Source: Qualcomm
Conclusion
Qualcomm’s cross-platform hardware ecosystem, combined with its industry-leading AI and software capabilities, delivers an exceptional user experience. As the influence of the Snapdragon brand grows, the expansive user base is expected to drive significant user loyalty, thereby creating not only brand value but also business value.
Qualcomm has acquired Sequans Communications’ 4G technology for $200 million, expanding into the cellular IoT market.
The deal enhances Qualcomm’s offerings in the LPWA segment, addressing performance and efficiency gaps with Sequans’ advanced 4G IoT technologies.
The acquisition provides Sequans with capital for 5G development while allowing it to continue leveraging its 4G IoT technology.
Qualcomm, a global leader in IoT chipsets, has entered an agreement with France-based fabless semiconductor company Sequans Communications to acquire its 4G IoT technology for $200 million. Sequans will continue its 4G IoT business, retaining the license to use its 4G IoT technology for ongoing operations. The deal is expected to close by the end of October 2024. Sequans had been looking for potential buyers following a challenging 2023, during which its revenues nearly halved. Earlier, in 2023, Renesas Electronics had attempted to acquire Sequans’ business, but the deal did not materialize.
What could be the possible reasons for Qualcomm to get into this deal? Let us walk through our list:
Market dynamics: Qualcomm is already a dominant player in the global 4G IoT (non-automotive) market with a 23% share, while Sequans holds just 0.5%. Excluding China, Qualcomm’s market share soars to over 59%, with Sequans barely reaching 1.4%. This means the acquisition isn’t about boosting market share. However, it allows Qualcomm to cater to a broader range of enterprise customers seeking low-power, reliable cellular connectivity for industrial IoT applications. The addition of Sequans’ advanced 4G IoT technologies to Qualcomm’s existing suite of IoT solutions will strengthen the latter’s position in the industrial IoT market.
Technology: From the technology perspective, Qualcomm’s strength extends across the LPWA landscape, encompassing LTE-M, NB-IoT, Cat-1, Cat-4, and higher categories. While Qualcomm previously faced challenges in the Cat-1 bis segment, it has rapidly gained traction, increasing its market share from 2% to 16% outside of China within one year. This significant improvement demonstrates Qualcomm’s ability to compete effectively in all LPWA technologies without relying solely on external acquisitions like Sequans.
It is important to note that the 4G segment is heavily dominated by Chinese vendors, including UNISOC, Eigencomm, Xinyi, ASR Microelectronics and emerging players like Altair Semiconductor. This competitive landscape highlights the challenges Qualcomm may face in certain regions, particularly those with strong domestic 4G ecosystems.
Sequans Product Portfolio Comparison
Source: Counterpoint Research
Monarch 2: Released in 2018, Qualcomm’s MDM9206 and MDM9205 LPWA Dual Mode chipsets are now considered outdated. Sequans’ Monarch series is the latest and offers improved performance, lesser power consumption and smaller size compared to Qualcomm’s chips. Acquiring Sequans technology is a smart move that will help Qualcomm strengthen its position and effectively address this gap in the LPWA market.
Financial strength: The transaction provides Sequans with significant capital, enhancing its financial stability and enabling further investments in its IoT business. With the 4G IoT technology licensed to Qualcomm, Sequans can concentrate on advancing its 5G technology and expanding its market presence. Surprisingly, Sequans retains the ability to use 4G IoT technology, ensuring continuity in serving its existing markets and customers.
Industry focus: Sequans strategically reduced its focus on certain segments, such as Massive IoT (FWA broadband), earlier this year. This shift allows the company to concentrate on key technologies and significant customer wins, including partnerships with companies like Itron. Sequans has several promising projects in the pipeline, including advancements in LTE-M/NB-IoT technology and the anticipated launch of its 5G Taurus chipset, which is expected to contribute to its growth in the coming years.
Conclusion
The acquisition of Sequans Communications’ 4G IoT technology by Qualcomm is a strategic move to enhance Qualcomm’s IoT portfolio. Despite Sequans’ small market share, the integration of its advanced 4G technologies will bolster Qualcomm’s position and allow it to serve a broader range of enterprise customers seeking reliable, low-power connectivity solutions.
From a technological standpoint, the acquisition helps Qualcomm address gaps in its offerings, particularly in the LPWA segment by incorporating Sequans’ superior Monarch series chipsets. This move is timely given the competitive 4G landscape, which is dominated by Chinese vendors.
Financially, the deal provides Sequans with the capital to strengthen its position and invest in 5G development while retaining its 4G technology for ongoing market service. Besides, Sequans’ shift in focus to key technologies and partnerships, along with promising new projects, positions it well for future growth.
Overall, the acquisition is a strategic alignment that addresses both immediate technology needs and long-term market goals for Qualcomm.
Mapless solutions provide more flexibility and adaptability. However, map-based solutions are more accurate and reliable.
The balance between flexibility, cost, and safety will be crucial in shaping the future of autonomous driving.
Map-based solutions may dominate in the short term, but the potential rise of hybrid models and advancements in AI will shape the next generation of autonomous vehicles.
The automotive industry is on the brink of a revolutionary transformation, propelled by the megatrends of connectivity, electrification, and vehicle autonomy. As advancements in Autonomous Driving (AD) technologies reshape our roads, a pivotal debate has emerged – should vehicles rely on traditional high-definition (HD) maps, or can they navigate effectively using real-time sensor data without pre-loaded HD maps? This question is the focus of the discussion surrounding mapless and map-based autonomous driving.
Understanding Mapless and Map-based Systems
Mapless autonomous driving, often termed ‘vision-based’ or ‘camera-based’ AD, leverages a combination of cameras and sensors to create a dynamic perception map of the vehicle’s surroundings. This innovative approach allows vehicles to navigate in real-time, adapting to changing conditions without relying on pre-loaded HD maps. Companies like Imagry and Deeproute are at the forefront of this technology. Imagry uses deep convolutional neural networks (DCNN) to mimic human driving behaviour for motion planning. Tesla was the frontrunner among OEMs adopting Mapless AD for its lineup using FSD. Other OEMs such as Xpeng, Huawei AITO, GAC Aion and Li Auto have also adopted Mapless.
In contrast, map-based AD systems depend on detailed pre-loaded HD maps, which are regularly updated to ensure accuracy and reliability. Major players like Google, HERE, and TomTom provide these comprehensive maps, which enhance navigation and route guidance. While map-based systems currently offer greater reliability, the flexibility and adaptability of mapless solutions present compelling advantages for future developments.
The Pros and Cons
Both solutions come with their own set of advantages and challenges. Mapless AD systems excel in real-time data processing and sensor integration, allowing for dynamic adaptation. However, they still face hurdles in reliability and accuracy. Conversely, map-based systems provide a solid foundation for safe navigation but involve higher costs and a dependence on external data sources.
As the industry evolves, the choice between these systems will largely depend on specific vehicle needs, regional infrastructure, and user requirements. For instance, higher-end vehicles may benefit from the precision of HD maps, especially in urban environments, while budget-friendly models might prioritize the cost-effectiveness and flexibility of mapless systems.
Source: Counterpoint Research
The Potential Rise of Hybrid Solutions
Interestingly, the concept of hybrid solutions in autonomous driving is beginning to gain traction, suggesting a promising future where the strengths of both mapless and map-based methodologies could be integrated. This strategy combines real-time sensor data processing with the reliability of HD maps, enhancing the vehicle’s perception capabilities and ensuring redundancy. Such solutions are particularly beneficial in regions where mapping data is scarce or frequently changing, allowing for effective navigation across diverse environments. This could ultimately lead to a more robust and versatile framework for autonomous driving, catering to the varying demands of different geographical regions and driving conditions.
Conclusion
As we look at the future of autonomous driving, the debate between mapless and map-based systems is bound to continue. While map-based solutions may dominate in the short term, the rise of hybrid models and advancements in AI and machine learning will likely shape the next generation of autonomous vehicles. Ultimately, the path forward will be defined by a combination of technological innovation, regional needs, and the evolving landscape of consumer preferences. The journey toward fully autonomous driving is underway, and how we navigate this terrain will determine the future of mobility.
The company will look to these new flagships to drive sales and Gemini mindshare among consumers.
A key Gemini enhancement is Gemini Live, which will allow users to hold a conversation with the AI assistant, instead of using limited prompts only.
The balancing act between driving innovation for the Android ecosystem and delivering unique Pixel features remains a key challenge for Google.
Google has unveiled its latest smartphones – the Pixel 9, Pixel 9 Pro/XL and Pixel 9 Pro Fold, its first set of devices with Gemini AI at the core from launch. Despite Google’s considerable marketing efforts, its share of the smartphone market remains modest. The company will look to these new flagships to drive sales and Gemini mindshare among consumers. The new Pixels are premium devices with refined design, and price tags to match. With its second-generation foldable, Google looks to improve on last year’s model with refinements to the display and overall build quality.
Image source: Google
Pixel 9 series: Specifications and features
The Pixel 9 and Pixel 9 Pro are designed to cater to different segments of the market while maintaining a consistent focus on performance and AI. The Pixel 9, starting at $799 in the US, offers a 6.3-inch “Actua” display, powered by the new Tensor G4 processor and 12 GB of RAM. Its 50 MP main camera and 48 MP ultrawide lens ensure stunning photos and videos, even in challenging conditions. The device also boasts improved durability, with Gorilla Glass Victus 2 on both sides.
The Pixel 9 Pro, starting at $999, is the more premium option, available in two sizes (6.3-inch and 6.8-inch “Super Actua” displays). It features 16 GB of RAM, a triple rear camera system and a 42 MP front camera, a significant upgrade to the Pixel 8 Pro’s 10.5 MP selfie lens.
New this year is the addition of the Pixel 9 Pro XL, which shares many of the Pixel 9 Pro’s features but has a larger 6.8-inch display, as well as a slightly larger battery.
The flagship of the series is the Pixel 9 Pro Fold, priced at $1,799, the same price as last year’s Fold entry price. It features an 8-inch Super Actua Flex inner display and 6.3-inch external display. In addition to GenAI capabilities, Google is also positioning the phone as one of the thinnest in the market – competing with Chinese OEMs like Xiaomi and HONOR which have made the thinness of their book-type foldables a key differentiator.
The latest camera enhancements, including Video Boost, Night Sight Video and Super Res Zoom for Video, are reserved for the Pixel 9 Pro/Fold, creating hardware differentiation between the base model and the Pro variants, similar to Apple’s strategy.
A key Gemini enhancement is Gemini Live, which will allow users to hold a conversation with the AI assistant, instead of using limited prompts only. Gemini Live should go a long way in reducing friction for users engaging with advanced AI capabilities on their phones, and, in turn, making the benefits of Google’s GenAI features a bigger part of everyday usage.
Market implications and challenges
Google’s presentation of the new phone hardware illustrates the balancing act the company tries to achieve between its own phone business and creating traction for Gemini AI for the Android platform.
The first half of the presentation was dedicated to talking about AI features, some of which will remain Pixel-exclusive, like Call Assist enhancements, while other features are going to be available on other Android devices in the future. Built into each Google phone launch is also a call to buy future phones from the competition.
Google faces significant challenges in expanding its market share. Despite heavy investments in marketing, Google’s presence in the US smartphone market is still relatively small and is predicted to plateau, according to Counterpoint’s shipment forecasts. The company is also facing an uphill battle as the Pixel 8 (-48% YoY) and Pixel 8 Pro (-28% YoY) trail the Pixel 7 series significantly in the US (Counterpoint Market Share Tracker, July 2024) in sell-through launch-to-date. It will take significant marketing to reverse this trend in a key market for flagship smartphones.
In other regions, expansion has been a work in progress. Japan remains a key market for Google. However, recent share gains have come with the Pixel A series mid-range devices, not the flagship series. In Europe, on the other hand, increased competition from Chinese OEMs like Xiaomi and HONOR remains a key challenge.
The foldable segment, where Google has made a bold move with the Pixel 9 Pro Fold, remains niche. Although foldables represent a growing trend, they still account for a small fraction of the overall smartphone market and are not expected to grow beyond a 3% share of total smartphone shipments over the next few years, according to Counterpoint Research.
ASPs for foldables in Western markets remain stable at super-premium levels. Samsung launched its latest foldables with a $100 price increase compared to last year’s generation. Motorola is most aggressive with its Razr (2024) pricing and strategy to reach buyers in the MVNO segment. For foldables to gain more momentum with mainstream users, pricing will remain a critical aspect. Hardware features are becoming more comparable to slab flagship phones, especially in camera tech, eliminating some user pain points.
Other announcements
In addition to new smartphones, Google has also announced an update to its Pixel Watch portfolio, most notably enhanced fitness features and health tracking and a larger second size.
Google is also launching new earbuds. Along with the usual hardware iteration improvements, the new buds are also the first non-phone devices to feature Gemini Live, Google’s conversational assistant.
Conclusion
Google’s Pixel 9 series showcases a host of new features powered by its Gemini AI platform. However, the balancing act between driving innovation for the Android ecosystem and delivering unique Pixel features remains a key challenge for Google.
Besides, a lot of momentum in international markets recently has come from the mid-range Pixel A series devices. Google is aiming to shift some of these buyers to its flagship series, and in general further flesh out a complete smartphone portfolio across key price segments.
The Pixel 9, Pixel 9 Pro/XL and Pixel 9 Pro Fold are equipped with the features and innovations needed to turn heads, but their success will ultimately depend on how well Google can overcome the hurdles of market penetration and consumer adoption.
Pixel 9 (right) next to Pixel 8 Pro. Image source: CounterpointPixel 9 Pro Fold 9 (left) next to Samsung Galaxy Z Fold 6. Image source: CounterpointPixel 9 Pro XL next to Pixel 9 Pro. Image source: CounterpointPixel Watch 3 with bands. Image source: CounterpointColor theme presentation of new and existing Google hardware. Image source: CounterpointGemini feature demonstration area. Image source: Counterpoint
Net revenue increased 21% YoY in the April-June quarter driven by strong memory demand and robust spending in specialty and mature nodes in China.
Customer Support Business Group (CSBG) revenue increased 14% YoY, its highest point since CY2022.
DRAM revenue surged 168% YoY helped by customer focus on DDR5 and HBM enablement.
Advanced packaging and HBM will drive long-term growth and combined revenue will surpass $1 billion in CY2024.
The company has introduced new etch technology that delivers industry-leading control of the NAND memory channel hole profile. It is expected to boost revenue in the long term.
Lam Research has reported a 21% YoY increase in its April-June quarter revenue, driven by strong memory demand and robust spending on specialty and mature nodes in China. For its financial year (July 1, 2023-June 30, 2024), the company reported a revenue decline of 14% YoY to $14.91 billion.
The company’s strategic focus on prioritizing investment in product development, R&D infrastructure, and technology upgrades to capitalize on AI-driven growth is expected to sustain long-term revenue growth. Besides, technology inflection and transition to Gate-All-Around (GAA), HBM, and advanced packaging are expected to further reinforce revenue growth. During the quarter, the company also launched a new patented cryogenic etch process that delivers industry-leading control of the NAND memory channel hole profile.
Launch of Lam Cryo 3.0, third-generation cryogenic etch technology
According to CEO Timothy M Archer, this technology delivers a memory channel hole profile with a top-to-bottom deviation of less than 0.1% relative to its depth. Archer emphasizes that such tight profile control allows customers to increase bit density by packing more cells per layer while also having the flexibility to add more layers per tier. He further adds that Lam Cryo 3.0 addresses the industry’s need for more sustainable solutions compared to conventional etchers.
Analysis
Enhanced focus on process efficiencies and materials innovation, unlike previous NAND technologies, will optimize manufacturing processes, result in better performance, increase yield and reduce costs, enabling 3D NAND FLASH roadmap extension to the next decade.
Delivering the required tools and solutions to address manufacturing challenges becomes significant as the complexity increases with the 3D NAND stack growing taller with each successive generation.
Lam Cryo 3.0 will help OEMs accelerate the pace of development in 3D NAND FLASH and meet increased capacity and bit growth requirement due to AI proliferation across end markets.
The new process involving low temperature coupled with lean chemistry offers an additional window of improvement to NAND manufacturers as it paves the way for better hole shape control, unlike conventional processes. Innovations with such precision and uniformity, along with delivering lower environmental impact, are needed to overcome the AI era’s key manufacturing hurdles, especially when employed in high-volume production.
These new innovations in etch and deposition will be key drivers in generating long-term revenue growth.
April-June quarter highlights
Financial highlights
Net revenue increased 21% YoY in the quarter to reach $3.87 billion. The growth was driven by robust demand for memory and an increase in sales in China.
Gross margin improved 280 basis points to 48.5%, compared to the same quarter last year, due to continued improvement in factory efficiencies which helped offset headwinds from customer mix.
Customer Support Business Group (CSBG) revenue increased 14% YoY to $1.7 billion, the highest since CY2022. The increase was primarily driven by growth in spares and Reliant systems which sell into mature nodes.
System revenue constituted 56% of the net revenue, amounting to $2.17 billion and growing by 27% YoY.
System segment-wise revenue
Foundry and Logic segment: Mature nodes’ key drivers
Foundry and Logic accounted for 64% of the total system revenue with Foundry growing by 16% YoY to $933 million. The growth stemmed from higher shipments for advanced technology GAA nodes and increased spending on mature nodes from China.
Memory segment: HBM drove memory revenue
DRAM reported a revenue increase of 168% YoY to $413 million. The growth in DRAM was due to increased spending on DDR5 and HBM as well as the 1Y node. The increasing adoption of AI will drive the DRAM and HBM growth further. Non-volatile memory (NVM) revenue increased 20% YoY to $369 million.
China constituted 39% of the system revenue for the quarter, which grew by 90% YoY to $847 million. The growth was attributed to increased spending on specialty and mature nodes and increased investment in DRAM.
Developments in April-June quarter
The company unveiled Lam Cryo 3.0, the latest advancement in cryogenic etching systems.
The company’s manufacturing plant in Malaysia reached a milestone by dispatching its 5,000th chamber.
FY2024 highlights
Financial highlights
Lam Research’s revenue decreased by 14% YoY to $14.9 billion due to reduced revenues from the Foundry, Logic and NVM segments. The NVM segment’s revenue declined 54% YoY to $1.57 billion.
Gross margin increased by 290 basis points to 48.2% due to improvement in factory efficiencies and cost management.
Customer Support Business Group (CSBG) revenue was $5.98 billion, down 11% YoY. However, increased spending from China on Reliant Systems for specialty and mature nodes brought revenue growth, along with higher spare revenue due to better utilization by memory customers and inventory stocking.
System revenue represented 60% of the overall revenue for the year, accounting for $8.92 billion.
Capex: The capex for FY2024 was $397 million, focused on lab investments in the US and Asia, along with an expansion of manufacturing facilities in Asia.
Guidance for July-Sept quarter and H2 CY2024 outlook
Q3 CY2024 (July-September) revenue is projected to range between $3.75 billion and $4.05 billion, with gross margin anticipated to be between 46% and 48%. A sequential decline in gross margin is expected due to changes in customer mix.
DRAM revenue is predicted to decrease in H2 CY2024 and will be offset by growth in HBM.
Advanced packaging and HBM will drive long-term growth and combined revenue will surpass $1 billion in CY2024.
The strength in mature node spending in China will continue in H2 CY2024 while global mature node spending will be flat YoY.
NAND revenue is likely to rise in H2 CY2024 as utilization rates normalize, and customers increase spending for conversion to 2xx- and 3xx-layer devices.
CSBG revenue is expected to see modest growth in H2 CY2024 due to improvement in utilization at memory customers.
On the Foundry side, mature node spending will remain strong in China.
Unfavorable QoQ change in customer mix will continue to be a slightly incremental headwind going into H2 CY2024.
Etch and deposition intensive technology inflections including GAA, backside power delivery, advanced packaging and dry EUV resist processing, along with implementation of more EUV layers in memory and Foundry/Logic transition from EUV to high-end EUV, are key drivers for long-term growth.
Intel looks to regain leadership in the tech industry by focusing on its ambitious 5N4Y goals and introducing advanced process nodes like Intel 7, Intel 4, Intel 3, Intel 20A, and Intel 18A.
Intel’s new technologies, such as RibbonFET and PowerVia, are revolutionizing AI computing by reducing power leakage, increasing transistor density, and enhancing overall performance. This positions Intel at the forefront of power-efficient and high-performance computing.
Intel is promoting its next-generation advanced packaging technologies, including EMIB and Foveros Direct 3D, to meet the increasing demand for Chiplets in the AI-driven era.
However, rapid technological advancements may lead to higher costs due to suboptimal yield and quality at new nodes. In the foundry model, where customers bear these costs, low yields can be a major issue.
Intel 18A, Intel Foundry’s leading-edge process node, is on track for production in 2025. With RibbonFET and PowerVia, foundry customers will unlock greater processor scale and efficiency to drive the future of AI computing forward. (Credit: Intel Foundry)
Image source: Intel
Intel announced on August 6 that its flagship CPUs, Panther Lake and Clearwater Forest, built on the Intel 18A advanced process nodes have successfully powered on and booted operating systems. Both products are on track to begin production in 2025. Additionally, Intel anticipates that its first external customer will tape out on the Intel 18A process node in H1 2025.
Intel has introduced several groundbreaking technologies such as RibbonFET, PowerVia, Foveros Direct 3D, and EMIB. Once a pioneer in the tech industry, Intel has fallen behind its competitors in recent years due to delays in its 14nm and 10nm manufacturing processes. To regain its leadership position, Intel is now focused on achieving its ambitious 5N4Y goals and continuously introducing advanced process nodes such as Intel 7, Intel 4, Intel 3, Intel 20A, and Intel 18A. Notably, Intel 3 and Intel 18A are integral to both Intel’s internal manufacturing operations and foundry manufacturing services.
There has been a noticeable increase in customer demand for dual sourcing in advanced wafer manufacturing, reflecting a growing preference among clients to diversify their supply chains and mitigate risks associated with relying on a single supplier.
Compared to other companies, Intel’s experience in the wafer foundry industry is still relatively limited. Traditionally, Intel followed the Integrated Device Manufacturing (IDM) model, producing a limited range of products. This approach differs significantly from the wafer foundry model, which involves manufacturing a diverse array of products for various clients. Consequently, Intel faces a steep learning curve in adapting to the complexities and demands of the foundry business.
To help customers swiftly adopt Intel’s 18A process for designing superior chips, Intel released the 18A Process Design Kit (PDK) 1.0 in July 2024. This kit provides access to the advanced RibbonFET Gate-All-Around (GAA) transistor architecture and the PowerVia backside power delivery technology, enabling customers to leverage these innovations in their Intel 18A designs for improved performance and efficiency.
Intel 3 has been successfully deployed in next-generation processors such as Emerald Rapids and Sierra Forest, showcasing its cutting-edge capabilities in high-performance computing. Meanwhile, Intel 18A has garnered significant attention from leading technology companies, with Microsoft and other major IC design firms expressing strong interest in leveraging this node for their innovative product developments.
Intel plans to start producing the 18A wafers in 2025 for the Panther Lake and Clearwater Forest chips, integrating advanced RibbonFET and PowerVia technologies. RibbonFET, a type of GAA transistor, improves power efficiency, enables greater miniaturization of chip components and significantly reduces current leakages. PowerVia, a type of backside power delivery method, moves the power supply network from the front side of the wafer to the back, separating power supply and signal paths to avoid interference with each other. This can improve power supply efficiency and free up space on the front of the wafer, increasing transistor density.
Additionally, to address the growing demand for chiplets in the AI era, Intel has developed next-generation advanced packaging technologies, including Embedded Multi-die Interconnect Bridge (EMIB) and Foveros Direct 3D. These innovations enable customers to achieve greater density and improved power efficiency, ensuring the continued advancement of Moore’s Law.
Intel’s Clearwater Forest is the first chip to extensively use RibbonFET, PowerVia, and Foveros Direct 3D packaging technologies, significantly ahead of its competitors. Meanwhile, Panther Lake is a key client CPU product following Lunar Lake and Arrow Lake. Panther Lake is expected to enter the market in 2025, featuring high TOPS NPU cores, which are crucial in the Generative AI PC competition.
Challenges:
To reclaim its former glory, Intel must overcome numerous challenges with its new wafer manufacturing technology.
The rapid advancement of technology can lead to suboptimal yield rates, which in turn increases costs. Although this is manageable in the IDM model, it poses a significant challenge in the foundry model. In the foundry model, yield is critical because the wafer owner is the customer. Low yields translate directly to higher costs for the customer, who must absorb these additional expenses.
Employing multiple new technologies simultaneously can provide Intel a significant edge over competitors. However, this approach also introduces potential challenges in integration, making it difficult to pinpoint and resolve issues.
JSW MG Motor India aims to push EV adoption by undertaking various initiatives.
It has introduced the eHUB all-in-one EV charging solution that can be used by consumers of any EV brand.
MG has partnered with LOHUM, TERI and BatX to reuse and repurpose batteries for schools and community centers.
In collaboration with its long-term partner Jio, MG has launched the Innovative Connectivity Platform (ICP) to enhance the in-car experience.
Over the years, electric vehicle (EV) adoption has picked up in India, mainly in the two-wheeler and three-wheeler segments. However, consumer apprehensions over range anxiety, charging infrastructure, affordability and serviceability have been impacting the adoption of four-wheeler EVs.
JSW MG Motor India, an early mover in India’s four-wheeler EV mass market, recently organized the DriEV.Bharat event to discuss its latest efforts toward addressing these challenges. The company has been focusing on expanding its EV portfolio in the country to achieve 65%-75% of its total sales from EVs by 2028, compared to 40% now. MG plans to introduce five EV models in India by 2028.
At the DriEV.Bharat event, the company announced a four-way approach to help push EV sales in India:
Source: MG Motor
eHUB – Unified app for EV charging
Apart from locating the charging station, another challenge for EV users is dealing with multiple payment systems at different charging stations, forcing them to use several charging apps on their smartphones. To simplify the EV ownership experience, MG has partnered with 18 charging companies, such as BPCL, Adani Total Energies Limited, Chargezone and Glida, to introduce an all-in-one EV charging solution. This comprehensive solution enables users to locate, reserve and pay for charging stations through a single app. Further, this solution is available to non-MG customers also.
Source: MG Motor
Project Revive – Reuse and repurpose batteries
The battery is a critical component in an EV. After the battery lifecycle ends for automotive use, it can’t be used in vehicles again but can be reused for other purposes. Therefore, MG has partnered with LOHUM, TERI and BatX to reuse and repurpose the batteries as Battery Energy Storage Solutions (BESS) for schools and community centers. This also underlines MG’s commitment to maintaining a sustainable environment.
EVpedia – EV awareness platform
The lack of complete awareness is one of the biggest challenges in EV adoption. MG has decided to address this knowledge gap among the new EV buyers or traditional ICE users by introducing a dedicated knowledge platform for EVs. The portal aims to educate people about the several benefits of EVs over ICE, like government policies and cost of ownership.
MG is known for its use of intelligent technologies and for providing the best in-vehicle connectivity experience. In collaboration with its long-term partner Jio, MG has launched the Innovative Connectivity Platform (ICP) to enhance the in-car experience. This platform will include the MG App Store, enabling in-car gaming, learning and entertainment. It also features an improved in-car voice assistant, available in six different languages, and the industry’s first Home-to-Car solution, allowing MG and Jio consumers to seamlessly access the MG App via a TV connected through Jio Setup Box. The upcoming MG Windsor model will be the first EV to feature the ICP, and it will be standard for all upcoming models.
Source: MG Motor
Key takeaways
In the last three years, India’s electric car sales have been on the rise. However, their share in the total car sales remains low. This implies that there are still reservations over buying an electric car in India. To change this situation, MG has taken it upon itself to spread awareness about EVs and develop an EV ecosystem by bringing various industry partners to make the EV ownership experience hassle-free.
The initiatives announced by MG Motor at the DriEV.Bharat event will certainly contribute to efforts to popularize EVs in the country. The all-in-one EV charging solution is not only for MG consumers but also for consumers of other brands.
Tata Motors leads the EV market in India, followed by MG with a big margin. These initiatives will help MG grab more mindshare among its prospective consumers.
While the government is doing its bit in popularizing EVs, MG is perhaps the first EV OEM to take such initiatives. Other OEMs should also come forward to educate potential EV buyers and build a seamless EV ecosystem.
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