Following in the wake of an earthquake that struck on April 3rd, TrendForce undertook an in-depth analysis of its effects on the DRAM industry, uncovering a sector that has shown remarkable resilience and faced minimal interruptions. Despite some damage and the necessity for inspections or disposal of wafers among suppliers, the facilities’ strong earthquake preparedness of the facilities has kept the overall impact to a minimum.
Additionally, significant price increases by suppliers since 4Q23 are expected to further diminish the momentum for inventory restocking. As a result, DRAM contract prices for the second quarter are projected to see a modest increase of 3–8%, says TrendForce.
Global server shipments are estimated to reach approximately. 13.654 million units in 2024, an increase of about 2.05% YoY. Meanwhile, the market continues to focus on the deployment of AI servers, with their shipment share estimated at around 12.1%.
TrendForce reports indicate a universal price increase for both DRAM and NAND Flash starting in the fourth quarter. DRAM prices, for instance, are projected to see a quarterly surge of about 3-8%.
TrendForce expects that memory suppliers will continue their strategy of scaling back production of both DRAM and NAND Flash in 2024, with the cutback being particularly pronounced in the financially struggling NAND Flash sector. Market demand visibility for consumer electronic is projected to remain uncertain in 1H24.
US-based CSPs have been establishing SMT production lines in Southeast Asia since late 2022 to mitigate geopolitical risks and supply chain disruptions. TrendForce reports that Taiwan-based server ODMs, including Quanta, Foxconn, Wistron (including Wiwynn), and Inventec, have set up production bases in countries like Thailand, Vietnam, and Malaysia. It’s projected that by 2023, the production capacity from these regions will account for 23%, and by 2026, it will approach 50%.
The global server market, grappling with the impact of worldwide inflation, saw significant shifts in 2023. Server OEMs and CSPs revamped their investment strategies, resulting in cutbacks in both annual shipments and ODM production plans. TrendForce observes that as the server market continues to decline, demand for AI surges. These combined factors have had a domino effect, compressing the rollout of new server platforms across the board.
TrendForce reports that the problematic model currently experiencing issues is the SPR MCC 32-Cores. The majority of affected customers are concentrated in the corporate sector, prompting Intel to proactively halt shipments of SPR MCC SKUs. Fortunately, other models such as the 20/24C and 36C and higher remain unaffected.
TrendForce reports that continued production cuts by DRAM suppliers have led to a gradual quarterly decrease in overall DRAM supply. Seasonal demand, on the other hand, is helping to mitigate inventory pressure on suppliers. TrendForce projects that the third quarter will see the ASP for DRAM converging towards a 0~5% decline.
