As the Russian-Ukrainian war directly affects Eastern Europe and, indeed, the entire European market, the supply of raw materials has destabilized and prices continued to soar, exacerbating inflation and pummeling the global economy. In addition, lockdowns and work suspensions caused by the recent pandemic outbreak in China and the government’s insistence on a dynamic zero-COVID policy may lead to complex problems such as reductions in factory production efficiency and logistical delays. TrendForce indicates, the uncertainty of current global political and economic circumstances have upset demand for three major display applications including TVs, LCD monitors, and notebooks, overshadowing 1H22 with pressure to correct expectations.
According to the latest TrendForce research, although factors such as panel and component mismatch and supply issues and the fading effects of the stay-at-home economy influenced shipments of e-sports LCD monitors (defined as refresh rates above 100Hz) in 2021, many brands targeted e-sports LCD monitors in 4Q21 with a strategy of aggressively reducing e-sports product pricing to prompt a volume surge and successfully boosted shipments of e-sports LCD monitors to 22.8 million units in 2021, with an annual growth rate of 24%. However, growth momentum will slow in 2022. In addition to long lead times, the most significant variable remains the impact of the Russian-Ukrainian war. If the war continues, it will impair European market demand and affect the shipment performance of e-sports-related products. In addition, the Russian-Ukrainian war has triggered a surge in the prices of crude oil, metal, and agricultural commodities, spiking previously growing inflationary pressure. Thus, TrendForce conservatively estimates shipments of e-sports LCD monitors at 26.1 million units in 2022, with an annual growth rate of 14%.
According to TrendForce research, demand continues to weaken due to modestly high inventories maintained by buyers and sellers, coupled with the recent impact of the Russian-Ukrainian war and rising inflation on PCs, laptops, and smartphones. However, overall NAND Flash supply has been significantly downgraded in the wake of raw material contamination at Kioxia and WDC in early February, becoming the key factor in a 5~10% NAND Flash price appreciation in 2Q22.
According to TrendForce research, corporate demand for digital transformation including artificial intelligence and high-performance computing has accelerated in recent years, which has led to increasing adoption of cloud computing. In order to improve service flexibility, the world's major cloud service providers have gradually introduced ARM-based servers. The penetration rate of ARM architecture in data center servers is expected to reach 22% by 2025.
According to TrendForce forecasts, average overall DRAM pricing in 2Q22 will drop by approximately 0~5%, due to marginally higher buyer and seller inventories coupled with the demand for products such as PCs, laptops, and smart phones being influenced in the short-term by the Russian-Ukrainian war and high inflation weakening consumer purchasing power. At present, the only remaining source of demand is on the server side, so overall DRAM stocks will remain oversupplied in 2Q22.