According to TrendForce’s latest memory spot price trend report, regarding DRAM spot prices, demand has yet to show improvement, leading to increased inventory pressure on suppliers, which indicates the potential for larger price drops in the future. As for NAND flash, the overall price trend is still shifting to a reduction, which led to a small drop in prices for packaged dies and wafers from the spot market. Details are as follows:

DRAM Spot Price:

Continuing from last week, demand has yet to show improvement, leading to increased inventory pressure on suppliers. Consequently, suppliers are more willing to offer price concessions in the spot market. Overall, spot transactions continue to show low volumes. Additionally, the prices that buyers are willing to accept are significantly lower than the official prices set by sellers, resulting in a stalemate. Therefore, there is a potential for larger price drops in the future. The average spot price of mainstream chips (i.e., 1Gx8 2666MT/s) fell by 0.20% from US$1.989 last week to US$1.985 this week.

NAND Flash Spot Price:

Sluggishness persists among spot market transactions after the opening in August, where buyers are maintaining their strong on-the-fence sentiment. Despite emergence of demand for partial stocking orders, the overall price trend is still shifting to a reduction due to a lack of continuity, which led to a small drop in prices for packaged dies and wafers from the spot market this week, where 512Gb TLC wafer has fallen by 0.58% in spot prices, now arriving at US$3.272.

According to a report from The Wall Street Journal citing sources on August 13th, it’s revealed that Chinese internet companies and telecom operators have been testing Huawei’s latest processor, the “Ascend 910C,” in recent weeks. Reportedly, Huawei has informed potential customers that this new chip is comparable to NVIDIA’s H100 GPU, which cannot be directly sold in China.

Huawei’s ability to continue advancing its chip technology is a sign of its efforts to counter U.S. sanctions. However, the report also indicated that Huawei is already experiencing production delays with its current chips. The company faces additional U.S. restrictions, limiting its access to parts for production equipment and the latest memory used in AI hardware.

The sources cited by the same report point out that, TikTok’s parent company ByteDance, search giant Baidu, and state-owned telecom operator China Mobile are in preliminary talks with Huawei to secure the Ascend 910C chip. These negotiations suggest that Huawei could secure orders for more than 70,000 chips, valued at approximately USD 2 billion.

Reportedly, Huawei aims to begin shipping the Ascend 910C in October, but the final delivery schedule might differ from the initial plan and could be subject to adjustments.

Under U.S. sanctions, customers in China are forced to purchase the H20 from NVIDIA, which is a “downgraded” version of the AI chip designed specifically for the Chinese market.

Per a previous report from South China Morning Post, it’s expected that Chinese tech giants may be considering a shift towards local AI products, which could pose a challenge to NVIDIA. Currently, China accounts for 17% of NVIDIA’s revenue in the 2024 fiscal year, making the competition in the Chinese market increasingly fierce for NVIDIA.

Compared to NVIDIA’s customers in China, NVIDIA’s U.S. customers, such as OpenAI, Amazon, and Google, will soon have access to NVIDIA’s latest Blackwell architecture chips, including new products like the GB200, which NVIDIA claims offer significantly improved performance compared to existing products.

Meanwhile,  Wall Street Journal also has cited sources, pointed out that NVIDIA is working on another China-oriented chip called B20, but the design might have trouble getting U.S. approval for China export if the regulations are further tighten.

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• [News] NVIDIA Reportedly Developing Tailored Version of the Blackwell Series for Chinese Market
• [News] U.S. Reportedly Enhancing Chip Export Restrictions to China, while NVIDIA’s H20 Might Get Banned

(Photo credit: NVIDIA)

Is the AI bubble about to burst? Two years after OpenAI launched ChatGPT, sparkling a surge in generative AI startups, China has now seen a wave of closures on AI companies. According to a report by Commercial Times, citing Chinese media TMTPost, nearly 80,000 AI companies in China have registered and then either closed down or suspended operations within the past 600 days.

The reports note that according to the data from the National Enterprise Credit Information Publicity System of China, between November 30, 2022, the release date of ChatGPT, and July 29, 2024, a total of 78,612 AI-related companies in China, which were newly registered during this period, are now in a deregistered or abnormal business status. This accounts for 8.9% of the 878,000 AI companies registered during the same period.

The current adversity for the AI companies in China, the reports suggest, could be attributed to excessive spendings regarding high computational costs and R&D investments, declines in venture capital leading to a funding freeze, and difficulties in achieving profitability.

According to the reports, over the past three years, more than 200,000 AI-related companies in China have been deregistered or revoked, with a total of 353,000 AI-related companies disappearing within the past decade.

On the other hand, as of August 7th, there are said to be 300,700 new AI companies registered in 2024. Currently, there are 1,804,300 AI-related companies in existence in China, the reports state.

Among them, over 4,500 companies are officially recognized as part of the AI industry system. More than 180 large generative AI models, which have completed registration and be online to provide public services, have been developed, with a registered user base exceeding 564 million.

Wang Xiaochuan, founder of Chinese search engine company Sogou, once stated in 2023 that the Large Language Model (LLM) for AI would undergo an “elimination tournament” in China, with the top tier likely consisting of no more than five companies, according to a report on Soho.

Baidu CEO Robin Li also mentioned in July that China has too many large language models, calling for tech leaders to focus more on building real-world applications driven by AI. A report by South China Morning Post, quoting Li, said that since the launch of ChatGPT in late 2022, China’s generative AI market has become crowded with over 200 large language models.

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• [News] China Reportedly Imposes Mandatory AI Model Reviews on ByteDance, Alibaba, and Others

(Photo credit: )

On August 13th, as per a report from Wallstreetcn citing industry sources, it’s indicated that SK hynix has raised the price of its DDR5 DRAM by 15% to 20%. Per the sources, the price hike by hynix is primarily due to the production capacity being squeezed by HBM3/3e. Additionally, the increased orders for AI servers downstream have also strengthened SK hynix’s resolve to raise DDR5 prices.

According to industry sources cited by Economic Daily News, for Taiwanese manufacturers, Nanya Technology has recently started mass production of DDR5, just in time to benefit from this price surge. Module makers such as ADATA and Team Group are also likely to see gains from low-cost inventory.

Nanya Technology has begun shipping its 16Gb DDR5, developed using its 1B process. Nanya Technology is optimistic that the DRAM market is on a clear path to recovery. This may due to last year’s production cuts by the three major memory manufacturers—Samsung, SK hynix, and Micron—as well as the strong demand for HBM driven by generative AI. The resulting chain reaction is expected to positively impact various types of DRAM.

SK hynix previously announced that its entire HBM production capacity for 2024 has been fully booked, with almost all of its 2025 capacity also sold out. To meet customer demand, SK hynix plans to convert over 20% of its existing DRAM production lines to mass-produce HBM.

Samsung, on the other hand, is said to be actively trying to catch up with SK hynix, looking to allocate around 30% of its DRAM production capacity to HBM.

The significant adjustments by Samsung and SK hynix to their production lines have severely squeezed the capacity for DDR4 and DDR5 DRAM, potentially leading to a sharp reduction in supply and causing prices to rise. Reportedly, SK hynix’s price increase for DDR5 primarily targets contract prices.

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• [News] Nanya Technology Chairman Names 10nm 1B Process as Key Expansion Focus for the Year
• [News] DRAM Price Surge Halts, Could HBM Demand Drive Price Increases?

(Photo credit: Nanya Technology)

The U.S. Bureau of Labor Statistics released the Producer Price Index (PPI) on August 13th, showing a year-over-year increase of 2.2% for July, lower than the previous month’s 2.7% and below market expectations of 2.3%. The month-over-month increase was 0.1%, also below the prior month and market expectations of 0.2%.

Breaking it down by components, the final demand for goods rose by 0.6% month-over-month, with food and energy prices up by 0.6% and 1.9%, respectively. However, final demand services decreased by 0.2% month-over-month, with trade services—which reflect the margins of wholesalers and retailers—declining by 1.3%, offsetting the gains in food and energy. Excluding food, energy, and trade, the core PPI saw a year-over-year increase of 3.3%, up by 0.1% from the previous month, while the month-over-month increase was 0.3%, up by 0.2% compared to the previous month.

Overall, inflationary pressures in the U.S. continue to ease, with service costs experiencing their decline for the first time this year. For the Federal Reserve, this development allows for a greater focus on the labor market, providing additional flexibility and leverage in determining the extent of future rate cuts. While the market has largely priced in a rate cut at the September FOMC meeting, there remains significant debate over whether the cut will be 25 or 50 basis points, with the final decision likely hinging on upcoming CPI and employment data.

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