Recently, major memory manufacturers such as Micron, Samsung, and Western Digital have all announced price hikes. Industry sources indicate that since 1Q24, memory manufacturers stay steadfastly in controlling supply and raising prices. Coupled with the impact of the recent earthquake in Taiwan, the supply-demand imbalance has further driven up memory prices.

However, it’s worth noting that according to industry experts, the primary driving force behind the recent price increases in the memory market is still from manufacturers. As to the demand side, significant growth are mainly seen in industrial control needs, AI large models, and automotive intelligentization, while other fields have not yet seen obvious growth.

Regarding the impact of the 403 earthquake, TrendForce expects the influence on the output bit of DRAM in 2Q24 to remain within 1%. Specifically, due to Micron’s earthquake-related damages being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing. The subsequent price trends still require observation.

• Has Micron Increased Prices by More Than 20% in Q2?

On April 9th, Taiwanese media reported that Micron has proposed price increases of over 20% for its products in Q2 to most customers, with price negotiations still ongoing.

It is reported that after the earthquake on April 3, Micron temporarily suspended the announcement of DRAM product quotation for the second quarter.

Currently, TrendForce maintains its previous expectations for the second-quarter contract price of Mobile DRAM, with an increase of about 3-8% QoQ. As for Server DRAM, due to the earthquake-related damages to Micron being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing, and the subsequent price trends still require observation. In regard to HBM, since most of Micron’s HBM 1beta production and TSV lines are located in Hiroshima, Japan, supply or price remain unchanged.

In the spot market, some module manufacturers like Kingston and ADATA have restarted quoting prices, but no price increase has been implemented yet. TrendForce believes that the earthquake’s impact on pushing up prices is limited.

Overall, due to the relatively low inventory of DDR3, there is still room for price increases. Whereas, DDR4 and DDR5 inventory is comparatively sufficient, coupled with weak demand, which are expected bring the situation of small consecutive price increases caused by the earthquake to return back to normal within a few days.

• Western Digital Continuously Increases NAND Flash and HDD Prices

On April 8, Western Digital confirmed for the first time that there is a shortage of supply for both HDD and SSD, and issued formal customer letters notifying of price adjustments for NAND Flash and hard drive products. Western Digital stated that the demand for flash memory and hard drive products has exceeded expectations, leading to supply shortages. Prices for these products will continue to be adjusted this quarter, with some adjustments taking immediate effect.

Western Digital acknowledged that it will perform the frequent price reviewing and adjust it accordingly. Furthermore, Western Digital also stated that its ability to handle orders outside of the plan is quite limited, so any order changes need to be notified in advance.

• Samsung Raises Prices of Enterprise SSD?

In the past two weeks, rumor has it that enterprise SSD fell into a supply shortage. According to industry sources, due to the optimistic outlook for SSD to become a part of AI in the future, paired with recent supply tensions, their prices have started to rise. Samsung is rumored to increase prices for enterprise SSD by 20-25% in 2Q24, reversing the downward trend seen in 2023.

Reportedly, Samsung initially planned to raise prices by about 15% compared to the previous quarter, but higher-than-expected demand led Samsung to expand the price hike. Samsung’s enterprise SSD accounts for approximately half of the market share, thus exerting a significant influence on pricing decisions.

A study by TrendForce on March 7 shows that in 4Q23, Samsung ranked first globally in the Enterprise SSD market with a market share of 41.7%, followed by SK Hynix (33.2%), Micron (10.8%), Kioxia (9.4%), and Western Digital (4.9%).

• TrendForce Released Forecasts for DRAM and NAND Flash Contract Prices for 2Q24

In terms of overall price trends, TrendForce estimates that although the inventory of DRAM suppliers has decreased, it has not yet returned to a healthy level. Furthermore, as they gradually shake of the loss situation, suppliers are expected to further increase their capacity utilization rates.

However, due to the lackluster overall demand outlook for this year and the large price increases by suppliers since 4Q23, the momentum for inventory replenishment is expected to weaken. Therefore, TrendForce anticipates that the quarterly increase in DRAM contract prices in the second quarter will converge to 3-8%.

Regarding NAND Flash, TrendForce stated that, except for Kioxia and Western Digital, which have been increasing their capacity utilization rates since 1Q24, other suppliers are generally maintaining a low production strategy.

Although the procurement volume of NAND Flash in 2Q24 has declined slightly compared to 1Q24, the overall market climate continues to be influenced by reduced supplier inventory and the impact of production cuts. Consequently, TrendForce forecasts a strong increase of around 13-18% in NAND Flash contract prices in 2Q24.

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• [Insights] The Spot Price of DRAM Continues to Decline, Weak Trading Volume for NAND Flash
• [Insights] DRAM and NAND Flash Spot Prices Drop as Demand Weakens

(Photo credit: Samsung)

In 2024, trade tensions between China and the EU have intensified. On April 10th, the European Commission updated its report on distortive economic practices in China, expanding to include new industries such as telecommunications equipment, semiconductors, railways, renewable energy, and electric vehicles.

According to a report from Commercial Times, despite strong protests from China, the updated report from the European Union indicates that EU manufacturers may have filed anti-dumping complaints against Chinese chip and clean technology producers.

The Hong Kong Economic Journal (HKEJ) reported on April 11 that the latest updated version of the EU report, namely ‘COMMISSION STAFF WORKING DOCUMENT ON SIGNIFICANT DISTORTIONS IN THE ECONOMY OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE PURPOSES OF TRADE DEFENCE INVESTIGATIONS‘, spans 712 pages. In addition to retaining industries like steel, aluminum, chemicals, and ceramics from the initial 2017 report, it has expanded to cover various new areas.

These include the role of the Chinese government in planning economic objectives, the importance of state-owned enterprises, special treatment in land, labor, raw materials, and energy for specific industries, and state subsidies, alleging distortive practices.

Previously, the EU’s new regulation on “Foreign Subsidies” came into effect in July 2023, followed by an announcement in October of the same year to initiate an anti-dumping investigation into Chinese electric vehicles. In response, China launched an anti-dumping investigation in January this year on distilled brandy containers of 200 liters or less originating from the EU.

Subsequently, the EU took action against Chinese company CRRC, prompting its withdrawal from public procurement tenders in Bulgaria. Recently, the EU escalated by announcing an investigation into Chinese-made wind turbines.

Despite escalating tensions in China-EU trade relations, when Chinese Minister of Commerce Wang Wentao visited Europe on April 7th, one of his main tasks was said to stabilize China-EU relations, maintain dialogue on trade disputes, and pave the way for Chinese President Xi Jinping’s planned visit to France in early May.

During Wang Wentao’s visit, he denied that Chinese automakers gain a competitive advantage through massive subsidies and emphasized that the anti-dumping investigation into EU brandy launched in January is unrelated to the electric vehicle dispute.

However, on April 10th, officials from China’s Ministry of Commerce Trade Remedy Bureau expressed a firm stance during a meeting with Lucais, Director of Trade Defence at the European Commission in Brussels. China stated that the updated report distorts China’s policies, market environment, and economic system, providing grounds for discriminatory anti-dumping measures. China expressed strong concern and opposition to this.

On the other hand, German Chancellor Olaf Scholz is set to lead a delegation to China on April 13th, with top executives from German companies such as BMW and Mercedes-Benz accompanying him.

According to a recent Reuters report, despite a nearly one-fifth decline in imports from China between 2022 and 2023, Germany maintains a high dependency on China for categories like chemicals, computers and solar cells. The “clear structural de-risking” is reportedly yet evident.

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(Photo credit: Pixabay)

Memory manufacturer Micron Technology stated on April 11 that the earthquake in Taiwan on April 3 has impacted its DRAM supply, estimated to be between 4-6% (mid-single digit percentage).

Micron emphasized in an 8-K filing with the U.S. Securities and Exchange Commission (SEC) that the earthquake did not cause permanent damage to its facilities, infrastructure, or equipment, and will not have a long-term effect on DRAM supply.

Micron noted that as of now, DRAM production post-earthquake has not fully recovered, but progress in facility restoration is promising thanks to efforts by the Taiwan team.

In February this year, Micron announced the commencement of mass production of high-bandwidth memory (HBM) chips, designed for use in NVIDIA’s H200 GPU for AI applications.

In March, Micron CEO Sanjay Mehrotra indicated that the company’s HBM chips earmarked for AI applications are sold out for 2024, with much of the 2025 supply already allocated.

Micron previously described HBM chips as utilizing stacked DRAM technology. The company did not specify whether the HBM supply would be affected by the earthquake.

Per a previous TrendForce press release, the three major original HBM manufacturers held market shares as follows in 2023: SK Hynix and Samsung were both around 47.5%, while Micron stood at roughly 5%.

As per Micron’s previous report, regarding growth outlooks for various end markets in 2024, the annual growth rate for the data center industry has been revised upward from mid-single digits to mid-to-high single digits, while the PC industry’s annual growth rate remains at low to mid-single digits. AI PCs are expected to capture a certain market share in 2025. The annual growth rate for the mobile phone industry has been adjusted upward from modest growth to low to mid-single digits.

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• [News] Micron’s Financial Report Reveals High Demand for HBM in 2025, Capacity Nears Full Allocation
• [News] Micron Begins Mass Production of HBM3e for NVIDIA’s H200

(Photo credit: Micron)

According to a report from Nikkei Asia, Chinese tech giant Huawei is building a semiconductor equipment research and development center in Shanghai to navigate U.S. export controls and strengthen its chip supply chain.

As per the same report from Nikkei Asia, Huawei is offering salaries double that of its competitors to recruit experienced talent. However, industry sources cited by the same report suggest that Huawei’s demanding work culture may make retaining talent challenging, despite the attractive pay.

The report further highlights the center’s crucial role in developing photolithography machines, essential for advanced chip production. U.S. export controls have made it difficult for Huawei to access such equipment, which is primarily manufactured by three global leaders: ASML from the Netherlands, Nikon, and Canon from Japan.

Sources cited in the report has revealed that Huawei’s new research center is located in the western Qingpu district of Shanghai, featuring spacious grounds housing the main chip development center and the new headquarters of HiSilicon, Huawei’s semiconductor design division.

The area also hosts wireless technology and smartphone development centers. As per the Qingpu District People’s Government in Shanghai, once completed, the park will accommodate over 35,000 high-tech workers.

To attract talent, Huawei reportedly offers salaries twice that of local chip manufacturers. Industry sources cited in the report further noted that Huawei has recruited engineers with experience collaborating with top global semiconductor equipment manufacturers like Applied Materials, Lam Research, KLA, and ASML. Engineers with over 15 years of experience at chip manufacturers such as TSMC, Intel, and Micron are also on Huawei’s potential recruitment list.

The export control measures implemented by the United States in recent years have made it more difficult for Chinese citizens to work for global chip companies in China. This has left Huawei and other Chinese semiconductor enterprises with a larger pool of top chip talent to choose from.

Regarding the matter, TrendForce has addressed the export restrictions on semiconductor equipment by the US and its allies present significant hurdles for Chinese foundries in obtaining essential tools. To counter these challenges, the Chinese government, alongside local suppliers, is intensifying R&D efforts to produce domestic semiconductor equipment, especially for 16/12nm processes and smaller.

This has led to increased collaboration between Chinese foundries and local suppliers in both R&D and qualification processes. Despite these efforts, China’s progress in lithography tools is limited to the 90nm node, which remains a significant obstacle in achieving complete self-sufficiency in semiconductor equipment.

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• [News] US Considers Sanctioning Huawei-Linked Chinese Chip Network, Huawei-Related Enterprises Blacklisted
• [News] US Government Considers Adding ChangXin Memory Technologies to Entity List, Imposing Further Sanctions on Chinese Firms

(Photo credit: Huawei)

The sweeping AI wave not only keeps AI chips in the market spotlight but also ushers in a new round of opportunities for the memory market. Recently, Citibank announced that SSD will replace HDD in the AI field, citing SSD’s faster speed, which are more suitable for AI training. It is reported that data centers of top US tech companies are shifting from HDD to enterprise SSD.

From consumer electronics to enterprise markets, and now in the era of AI, the battle between SSD and HDD is underway once again .

• Can SSD Fully Replace HDD?

Industry sources point out that SSD surpass HDD by nearly 10 times in terms of access speed, while HDD boasts the advantage of lower cost.

According to a previous report from Nikkei Asia, in recent years, as NAND Flash prices declined in a downward cycle, the cost gap between SSD and HDD has begun to narrow, enabling SSD to gradually replace HDD in some fields. For instance, in consumer PC storage devices below 2TB, HDD have been phased out and replaced by SSD.

This seems to indicate that SSD has significantly outpaced HDD, but it is still difficult to say that SSD will completely replace HDD. After all, compared to consumer products, data centers have higher performance requirements for SSD. Furthermore, from a cost perspective, enterprises face significant pressure if they want to fully substitute SSD for HDD.

The current AI boom has provided opportunities for the development of both HDD and SSD, with a surge in demand for high-capacity products leading to price increases.

Industry sources reveal that HDD manufacturers reduced supply due to poor market conditions last year. With the arrival of the AI wave, supply of HDD outbalanced demand in 2H23, driving prices higher. From 3Q23 to 1Q24, HDD prices have increased by 10-20% overall. The latest reports show that Western Digital has recently notified customers of continuous price increases for HDD products. Industry sources expect HDD market prices to continue to rise in 2Q24, with increases ranging from 5% to 10%.

Likewise, SSD market is also facing supply shortages, especially in the enterprise SSD segment. TrendForce predicts a strong increase of about 13-18% in NAND Flash contract prices in 2Q24, with enterprise SSD contract prices expected to increase by 20-25% QoQ, representing the highest among all product lines.

At present, SSD and HDD are expected to coexist and progress together. However, looking ahead to the future, some memory manufacturers hope that SSD can continue to advance and even replace HDD.

In 2023, Shawn Rosemarin, Vice President of Research and Development Department of Pure Storage, stated that HDD would be completely phased out within 5 years. HDD consume too much power; 3% of global electricity used for data centers, and one-third of this power consumption comes from storage systems, the majority of which are mechanical hard drives. The cost difference in operating such large-scale deployments is striking. If the storage device is shifted to SSD, power consumption will be reduced by 80-90%.

However, HDD manufacturers have countered this statement. Rainer Kaese, Senior Manager of HDD Business Development Department at Toshiba, believes that HDD will continue to exist for some time. In the long run, they will continue to be cheaper than SSD, and data center engineers will develop more efficient HDD to meet stricter power consumption requirements.

The debate between these two sides reveals the respective strengths and weaknesses of SSD and HDD. As manufacturers continue to enhance performance, reduce costs, and lower power consumption, the competition between SSD and HDD is expected to continue in the future.

Read more

• [News] Western Digital Customer Letter Confirms HDD Supply Shortage! NAND Flash and Hard Drive Prices Continue to Rise
• [News] SSD Prices Keep Rising

(Photo credit: Western Digital)