According to Taiwan’s TechNews, with the ongoing reduction in production by major memory manufacturers and the visible benefits of inventory clearance in the market, NAND Flash prices are beginning to rebound, and DRAM prices are expected to follow suit. This signals a ray of hope for memory manufacturers who have endured the longest-ever price downturn, finally seeing light at the end of the tunnel.

To reduce losses, NAND Flash suppliers have implemented multiple production cuts since 2023, aiming to lift prices and halt further declines. This strategy has started to yield results, with reports of wafer contract prices for NAND Flash rebounding in August and continuing to rise in September, putting NAND Flash ahead of DRAM in its recovery.

Samsung, a leading player, has continued its production cuts, mainly focusing on products with less than 128 layers. Their September output decreased by nearly 50%, prompting other manufacturers to follow suit and demonstrate the benefits of inventory adjustments. Market experts also predict that NAND Flash prices will continue to rise in the fourth quarter. TrendForce is optimistic about NAND Flash pricing for Q4, estimating an increase of around 3% to 8%, higher than the initial projection of 0% to 5%.

While DRAM price increases have lagged behind NAND Flash, the benefits of production cuts by major manufacturers and accelerated inventory clearance are expected to lead to a gradual price rise starting in the fourth quarter. Market expectations are that this upward trend will mark the beginning of the next growth cycle.

Industry experts point out that the rise in DRAM prices is not only due to factors like production cuts and inventory clearance but also linked to the artificial intelligence market. The demand for DDR5 in the data center market driven by AI applications has limited capacity supply, leading to an early price surge. Additionally, DDR3, which major manufacturers have gradually phased out but still has market demand due to limited supply, is experiencing a significant price increase.

As for the current mainstream DDR4, although manufacturers are working to clear substantial inventories in hopes of boosting prices, there is still unfavorable news in the market. Intel’s new Meteor Lake computing platform only supports DDR5 and not DDR4, which poses additional challenges for manufacturers with high DDR4 inventories.

(Photo credit: Samsung)

Report to Voice, After the release of the Huawei Mate 60 Pro, various components have begun to experience the long-lost sensation of surging demand, replenishment, and stockpiling. With the launch of the Apple iPhone 15, the once sluggish global consumer electronics market has suddenly come back to life. The current mindset among storage manufacturers is clear: regardless of whether there is a real or perceived shortage, the goal before the year-end is to raise prices until they are no longer incurring losses.

Leading storage giants have gone through a series of price drops, losses, and production reductions, and are now officially entering the “price hike” phase. Samsung, SK Hynix, Micron, and others have already expressed their intention to raise NAND Flash contract prices.

According to TrendForce latest price projection on NAND Flash, in response to persistent softening in demand, Samsung has taken a decisive step: a sweeping 50% production cut from September, with the focus mainly on processes under 128 layers. Other suppliers are also expected to follow suit and increase their production cutbacks in the fourth quarter to accelerate inventory reduction. With this maneuver in play, Q4 NAND Flash average prices are projected to either hold firm or witness a mild surge, possibly in the ballpark of 0~5%.

YMTC now is facing surging demand from both smartphone and module manufacturers. It is reported that the production capacity for the period up to 1H24 has already been fully booked, with PC and server manufacturers sharing the capacity, while module manufacturers may receive a smaller share.

The current NAND Flash market situation is such that trying to negotiate increased supply with NAND Flash manufacturers like Samsung, Micron, and YMTC may yield little new capacity, and accepting higher prices may be inevitable.

The sudden pre-sale launch of the Huawei Mate 60 Pro has undoubtedly acted as a major catalyst for the current smartphone market. Without it, many smartphone supply chain companies believed that the smartphone market wouldn’t recover until the second half of 2024, and the most pessimistic among them even doubted if it would improve by 2024. The release of the Huawei Mate 60 Pro and the Apple iPhone 15 has injected a long-awaited warmth into the global smartphone market, reinvigorating the entire smartphone component supply chain.

In recent times, the top-tier iPhone 15 Pro Max from Apple’s iPhone 15 series is expected to be available only in November, which some interpret as a sign of strong demand. However, it is more likely due to production bottlenecks, particularly related to technologies like CIS, which have resulted in limited shipments of the iPhone 15 Pro Max. Overall, the estimated shipment volume for the iPhone 15 series may still reach up to 80 million units.

Is this resurgence in smartphone demand a lasting trend with increased consumer willingness to upgrade, or is it a temporary phenomenon? Optimists and conservatives hold differing views, but what is certain is that the global smartphone shipment volume has entered a mature phase, with limited room for significant growth driven solely by new features. However, the storage capacity in each smartphone continues to increase, providing substantial opportunities for existing supply chain manufacturers.

While new opportunities like automotive and AI have emerged, there is still no demand in any new field that can entirely replace the massive smartphone market. Therefore, the consensus within the global tech industry is that for the economy to rebound, the consumer electronics sector, particularly smartphones, is indispensable at this stage. AI and electric vehicles alone cannot take the place of smartphones. (Image credit: YMTC)

(Source: https://mp.weixin.qq.com/s/cb0kRUpWU6MElLNh9CR9eA)

Due to factors such as high inflation, sluggish demand in the consumer electronics sector, and other influences, the memory market has experienced a downturn. Major manufacturers like Kioxia and Micron began reducing capacity in the fourth quarter of the previous year, and in 2023, Samsung announced its entry into the production reduction trend. However, as market demand continues to weaken, the memory market in 2023 has yet to show signs of recovery, with prices continuing to decline and manufacturers facing operational pressure.

In this context, some memory manufacturers are hoping to stabilize prices and rebalance market supply and demand by continuing to reduce production.

According to reports from Taiwan’s media The Commercial Times,” DRAM manufacturer Nanya Technology is following the footsteps of major players by adjusting production capacity, lowering utilization rates, flexibly adjusting product portfolios and capex, and dynamically adapting to customer demands and market changes to cope with the weak market conditions. It is expected that production capacity will be adjusted dynamically, with reductions of up to 20%.

Previously, TrendForce’s research showed that due to DRAM suppliers initiating production cuts one after another, overall DRAM supply bits have decreased quarter by quarter. Coupled with seasonal demand support, this has eased the pressure on supplier inventories. It is expected that the price decline in the third quarter for DRAM will converge to around 0-5%. However, due to the fact that supplier inventories remain high throughout the year, there is still significant pressure for DRAM prices to bottom out and rebound, with the actual stabilization and recovery likely to occur in 2024.

As for NAND Flash, recent surveys by TrendForce indicate that, in response to the continued weakening demand, Samsung has announced an increase in production cuts starting from September, with reductions mainly focused on processes below 128 layers. Other suppliers are expected to follow suit and expand production cuts in the fourth quarter to accelerate inventory reduction.

As NAND Flash manufacturers expand their production cut efforts, TrendForce estimates that NAND Flash prices in the fourth quarter are expected to remain stable or see a slight increase, with an estimated increase of approximately 0-5%. However, if the upward trend in NAND Flash prices is to continue into 2024, it will still rely on sustained production reductions, as well as the observation of whether Enterprise SSD purchase orders will see a significant resurgence.

(Photo credit: Micron)

DRAM Spot Market
Spot prices of chips in the lower price range have started to elevate this week as some NAND Flash suppliers are very committed to raising their spot prices. On the whole, there has been some stabilization of DRAM spot prices, and the overall volume of spot transactions has also increased a bit. Looking ahead in the short term, it remains to be seen whether suppliers’ ongoing production cuts will spur buyers to stock up. However, spot prices are expected to remain mostly flat until the end of this year. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 0.28% from US$1.450 last week to US$1.454 this week.

NAND Flash Spot Market

Buyers, concerned over the cessation of low prices, are continuously proposing order inquiries, though they are hesitant towards following up on prices and hoarding inventory during actual transactions. Continuity of transaction dynamics is not apparent in the spot market, where several packaged dies are seeing repeated fluctuations. Compared to the panicked purchases over the past several weeks, buyers have now composed themselves, and are deciding on procurements based on the recovery of demand. Wafer remains as the category with a clearer inflation tendency, where 512Gb TLC wafer spots have climbed 2.02% in the spot market this week, arriving at US$1.620.

DRAM Spot Market
Spot prices of DRAM products have risen slightly lately due to Samsung’s earlier attempt to raise prices of 3D NAND Flash wafers as well as the temporary halt in the flow of rebelled used chips into the market. DDR4 products have experienced a more noticeable price increase compared with DDR5 products. However, there is still insufficient actual demand to sustain the rise in spot prices. Furthermore, most spot traders already have sufficient inventory. Therefore, prices have stopped falling, but the overall transaction volume is not expanding. TrendForce believes spot prices are near the trough for this downturn phase of the price cycle. Nevertheless, there is some time before the overall average spot will rebound because demand visibility is limited. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) fell by 0.34% from US$1.456 last week to US$1.451 this week.

NAND Flash Spot Market
The intermittent price increases of packaged dies at various capacities are reflecting persistently sluggish market demand, while wafer prices, after several consecutive weeks of elevation in prices, are now gradually subsiding in differences to that of the contract market. 512Gb TLC wafer spots have risen by 3.88% this week, arriving at US$1.578.