Amid the rising memory market prices and the continuously improving supply-demand balance, original manufacturers (OEMs) have seen their business performance steadily climb, generally achieving a turnaround from losses to profits.

Meanwhile, memory module manufacturers have also enjoyed rapid growth in their performance. With strong support from AI, memory manufacturers are optimistic about future market conditions, with some even stating that 2025 will be a significant upward cycle year for the memory industry.

• OEM and Module Manufacturers Recorded Strong Financial Results

Recently, two OEMs, Micron and Winbond, have disclosed their latest financial data.

Micron’s financial report for the period from March to May 2024 shows that the company’s revenue for the quarter was USD 6.811 billion, an 81.5% increase YoY. Non-GAAP operating income was USD 941 million, and net income was USD 702 million, a 47% increase QoQ. Specifically, Micron’s DRAM revenue was approximately USD 4.7 billion, a 13% increase QoQ, while its NAND business revenue was approximately USD 2.1 billion, a 32% increase QoQ.

The average selling prices (ASP) for both DRAM and NAND increased by more than 20% QoQ. Micron stated that its revenue, gross margin, and earnings per share for the quarter exceeded the upper limit of its guidance range. Looking ahead to next quarter, Micron expects its revenue to reach USD 7.4-7.8 billion.

Winbond’s self-clearing revenue report for June 2024 shows that consolidated revenue for June was TWD 7.378 billion, a 5.56% increase YoY; the cumulative consolidated revenue for January to June was TWD 41.605 billion, a 14.53% increase YoY.

In terms of memory module manufacturers, companies such as Adata, Phison, and Team Group all reported year-on-year revenue growth for June and the first half of the year. Adata’s revenue for June reached TWD 2.954 billion, a year-on-year increase of over 29.38%, with a cumulative consolidated revenue of TWD 20.91 billion for the first half of this year, up by 48.56% YoY. Team Group’s revenue for June was TWD 2.796 billion, a 44.93% increase YoY, while Phison’s revenue was TWD 5.361 billion, a 55.93% increase YoY, both setting new monthly revenue records.

BIWIN and TWSC recently disclosed announcements expecting substantial year-on-year growth in net profit for the first half of 2024. BIWIN expects net profit after deducting non-recurring gains and losses to be CNY 275-325 million, a year-on-year increase of 191.12-207.69%. TWSC expects operating revenue to be CNY 2-2.3 billion, a year-on-year increase of 238.68-289.48%.

• Memory Companies Anticipate an Upward Trend in 2025

Both OEMs and module manufacturers hold positive attitudes towards the outlook for future memory market.

Micron, as one of the three major DRAM manufacturers, has seen its HBM business grow by leaps and bounds in recent years, greatly benefited from the AI wave. Therefore, Micron is steadfastly optimistic about the potentials of AI and HBM. Micron expects to generate several hundred million dollars in revenue from HBM in fiscal 2024, which is expected to reach several billion dollar in fiscal 2025. Additionally, Micron reiterated that HBM has been in tight supply, and its HBM memory chips have already sold out for 2024 to 2025.

Winbond Chairman Arthur Chiao noted that Winbond began to see a decline in memory sales since 2Q22 and signs of sales increase in 2Q24 after eight quarters. He expects sales volume to rise, followed by price increase. He positively predicts that the industry will enter an upward cycle over the next two years, and 2025 will experience remarkable growth. To sum up, he views the market outlook for next year as optimistic.

Adata Chairman Simon Chen emphasized that upstream manufacturers currently have a very positive and proactive attitude towards prices. The allocation of production capacity is prioritized for HBM with the highest gross margin, followed by general-purpose DDR5 and DDR4. Capital expenditures are also profit-oriented.

As a result, short-term spot price fluctuations do not affect the continuous and stable upward trend of DRAM and NAND Flash contract prices in the third quarter. Moreover, some DRAM spot prices have started to rebound recently. He is optimistic that after a short-term adjustment in the spot market, the company’s shipments will return to a growth trajectory as the coming of the traditional peak season in 2H24.

• NAND Flash Price Increase to Shrink in 3Q24

It’s worth noting that although memory manufacturers are generally optimistic about the future market, and the AI development has indeed boosted demand for products such as servers, HBM, and enterprise SSD, the downstream terminal application market has not yet fully recovered.

Meanwhile, the active moves in expanding production by original manufacturers may lead to changes in the future supply-demand balance. These factors suggest that the increase in some product contract prices in the future memory market may shrink.

TrendForce reports that a recovery in demand for general servers—coupled with an increased production share of HBM by DRAM suppliers—has led suppliers to maintain their stance on hiking prices. As a result, the ASP of DRAM in the third quarter is expected to continue rising, with an anticipated increase of 8–13%. The price of conventional DRAM is expected to rise by 5–10%, showing a slight contraction compared to the increase in the second quarter.

In terms of NAND Flash, TrendForce indicates that industry companies will continue to invest in server construction, and particularly, enterprise SSD will see order increase as a result of the expansion of AI adoption, while consumer electronics demand remains weak. In addition, original manufacturers tend to be active in expand production in 2H24. As a whole, the sufficiency ratio of NAND Flash supply will rise to 2.3% in the third quarter, and the blended NAND Flash price increase will converge to 5-10%.

Looking at the price trend of NAND Flash this year, the price of NAND Flash accelerated to rebound as original manufacturers remained conservative in production increases in 1H24, which enabled them to return to profitability.

However, as manufacturers significantly expand production in 2H24, and retail market demand has still not recovered yet, the decline in wafer spot prices has widened, with some wafer prices falling more than 20% below contract prices. This presents a challenge for the future increase in wafer contract prices.

Read more

• [News] Memory Utilization Rate Near Full Capacity, Surpassing Mature Nodes Foundries
• [News] Memory Market Recovery is Near, as Winbond Expects a Good Year in 2025

(Photo credit: Micron)