Ultrabooks, a new type of notebooks with high-performance in thin-and-light form-factor, are set to take the market by storm, gradually taking a piece of the traditional notebook market and providing new momentum for the entire IT industry. According to market research firm TrendForce, Intel Corp.-developed type of mobile computers will grab 10% of the notebook market already in 2012.
"We believe that ultrabook market share will jump from under 2% in 2011 to over 10% in 2012, stimulating renewed growth of the PC industry," said Kevin Lin, chief executive officer of TrendForce.
Since the ultrabook strives for thin and light form factor, efficiency, and long battery life, key component parts need to be revamped in order to fulfill ultrabook needs. This will in turn open up other areas for the application of new technology, and support the improvement of specifications.
"PC manufacturers will introduce different levels of ultrabooks at different price points, in hopes that having models with varying specifications will help them maneuver the market, satisfy consumer needs," said Mr. Lin.
HHD, SSD Demand to Increase Significantly in 2012
Modern thin-and-light notebooks utilize solid-state drives (SSD) to offer better performance in ultra-small form-factors. In order to achieve power efficiency and performance of today's rather expensive machines like Apple Macbook Air, ultrabooks must follow suit. Some cheaper models, however, may employ hybrid hard drives (HHDs) that combine NAND flash with traditional media.
"As SSD cost remains much higher than traditional hard drive cost, many of the ultrabooks currently promoted by PC vendors are equipped with hybrid hard drives. For instance, over 320GB of traditional hard drive paired with a small amount of SSD will increase efficiency while still keeping cost under control. Whether equipped with large amounts of SSD or hybrid storage devices, ultrabooks will effectively stimulate NAND flash demand growth, providing significant benefit to the entire NAND flash industry in 2012," said Sean Yang, assistant vice president of DRAMeXchange.
Low-Power DDR3L to Face Higher Demand
Ultrabooks are also projected to change the direction of the memory market. In terms of memory capacity, as memory makers transition from 30nm to 20nm-node process technology, due to cost structure considerations, single module capacity will gradually shift from 2GB to 4GB. Furthermore, to achieve the ultrabook's thin and light goal, the number of manufacturers choosing to weld RAM directly to the motherboard will increase significantly.
While 1.5V is the current standard of mainstream DDR3, in order to fulfill the ultrabook's longer battery life needs, the number of major manufacturers producing DDR3L (1.35V) will increase markedly in the future, according to DRAMeXchange/TrendForce. In 2012 DDR3L is expected to be the loaded memory standard for ultrabooks, and will save approximately 10-15% power compared to current specifications.
"In the long run, if LPDDR3 realizes economies of scale in 2013, resulting in a cost difference of less than 100% compared to DDR3L, the ultrabook target of having over 10 hours of battery life is not out of reach," said Avril Wu, an analyst with DRAMeXchange.
Battery Prices Set to Increase, Makers to Benefit
Ultrabooks are projected to use high-density batteries and consume from 40W to 60W. The new type of PCs face a battery challenge that will require efficient management of battery cell supply and cost.
There are three options for ultrabook battery core type: polymer, thin prismatic, and thin cylindrical. With the diversification of battery core application, system development has led to a polarization of price.
"As pressure to lower price increases, it is expected that 30% of the ultrabook battery core market will be comprised of more economical battery types. More importantly, as tablet penetration rate gradually approaches saturation, market focus will shift from low-priced tablet PCs to more costly ultrabooks. Hopefully, this will provide a new source of revenue for Taiwanese battery manufacturers," said Duff Lu, an EnergyTrend analyst.
Notebook LED Demand to Be Determined, Competition Heightened
As ultrabooks require thin panels and power efficiency, demand for backlight modules with 0.8t or 0.8LV side view LED is expected to increase. Eventually, they will replace the 3014 package type used by traditional notebooks, and indirectly raise LED product ASPs.
Ultrabooks will raise the bar in LED backlight competition with the use of more 0.8t and 0.8LV low voltage LED products. In the future, LED product development will head towards even thinner form factor. Thus, Japanese LED manufacturers in the early and mid-market stage are getting a head start on the LED backlight market. Nichia and TG have both increased shipments of ultrabook LED backlight products.
"In the short term, the effect of ultrabooks on the LED market is not likely to be significant, but will increase as ultrabook penetration rate increases. By 2015, LEDs used in ultrabooks will account for 30% of total notebook LED use," said Renee Liao, an analyst with LEDinside, a subsidiary of TrendForce.
Demand for Ultra-Slim Panels to Increase
Since ultrabook notebooks will require slim or ultra-slim panels, manufacturers will have to use new process technologies and/or better components for their production.
"The hinge up assembly mode will bring about a transition from panel modules to open cell panels (panels that have not been through the backlight module assembly stage). Using open cell panels to integrate backlight modules with notebook covers (component A), this assembly method reduces the thickness of the back cover and module frame, simultaneously achieving thin form factor and cutting costs," said Boyce Fan, an analyst with WitsView.
As this method requires close integration of optical design and assembly, backlight module manufacturers have the opportunity to establish their key role in the supply chain with the hinge up assembly mode.
In addition to the hinge up method, panel makers are also planning to produce ultra slim panel modules, utilizing chemical etching to reduce glass thickness from 0.5mm to 0.3mm, subsequently lowering module thickness from the 3.6mm of traditional modules to less than 3mm. However, as the cost of chemical etching is still relatively high, current ultra slim panel module cost is approximately 20-30% higher than traditional modules.
Ultrabooks to Inevitably Cannibalize Traditional Notebooks
According to statistics compiled by TrendForce, compared to the MacBook Air's $999 price tag, average ultrabook retail price will initially be set at around US$800-1,100. As traditional notebooks are currently available for $300-$500, the higher-priced ultrabooks should help increase total revenue for the notebook industry.
As for the big picture, the cannibalization of traditional notebooks by ultrabooks is inevitable, but the new platform will also stimulate demand for and advancement of industry technology. According to analysis by TrendForce's research divisions, ultrabooks will provide positive growth for key component parts. However, as ultrabook component cost will be higher than their notebook equivalents in the early stages of production, manufacturers will have a difficult time competing with already available systems like MacBook Air in terms of specifications and price.