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2023/07/05
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 Despite suppliers’ concerted efforts, inventory levels persistently remain high, keeping prices low While production cutbacks may help to curtail quarterly price declines, a tangible recovery in prices may not be seen until 2024
PC DRAM: The benefits of consolidated production cuts on DDR4 by the top three suppliers are expected to become evident in the third quarter Furthermore, inventory pressure on suppliers has been partially alleviated due to aggressive purchasing by several OEMs at low prices during 2Q23 Evaluating average price trends for PC DRAM products in 3Q23 reveals that DDR4 will continue to remain in a state of persistent oversupply, leading to an expected quarterly price drop of 3~8% DDR5 prices—influenced by suppliers’ efforts to maintain prices and unmet buyer demand—are projected to see a 0–5% quarterly decline The overall ASP of PC DRAM is projected to experience a QoQ decline of 0~5% in the third quarter
Server DRAM: Buyer inventories remain high and the transition to new platforms has fallen short of expectations Despite the recent investment focus by CSPs on AI server equipment, which is accelerating the procurement of high-capacity server DRAM such as DDR5 128G and HBM, there hasn’t been a significant reduction in server DRAM inventories The price decline for DDR4 and DDR5 stands at approximately 3~8% and 0~5% respectively, signaling a persistently weak pricing trend for server DRAM products Consequently, average server DRAM prices are forecasted to decline by about 0~5% in 3Q23
Mobile DRAM: Even though smartphone demand was weak in 1H23, the traditional peak season and concurrent production cuts by suppliers are expected to drive up demand for mobile DRAM However, these measures offer limited assistance in being able to substantially reduce suppliers’ inventory levels Successive price declines over past quarters have now reached baseline prices for suppliers, prompting Korean firms to lead a hike in mobile DRAM prices But due to the prevailing oversupply, a standoff has ensued between buyers and sellers The ASP of mobile DRAM is predicted to fall by 0~5% in 3Q23, although sporadic price increases may occur due to strategic moves made by suppliers
Graphics DRAM: The NVIDIA RTX 40 series, along with the traditional peak season, is anticipated to stimulate a significant upswing in demand for graphics DRAM—particularly GDDR6 16Gb—during the third quarter However, given that buyers accumulated stock ahead of time in the second quarter and now hold substantial inventory, suppliers may find themselves unable to increase prices in a market that remains in a state of oversupply Therefore, the market price of mainstream GDDR6 16Gb is projected to see a quarterly drop of 0~5% in the third quarter, mirroring an approximate 0~5% decline in ASP for graphics DRAM
Consumer DRAM: The market is currently witnessing a sluggish transactional pace SK hynix plans to expand the supply of DDR3 and DDR4 4Gb at its Wuxi fab, gradually increasing production capacity Simultaneously, Winbond has transitioned into the mass production stage, with an increase in wafer input expected each quarter As a result, the consumer DRAM market continues to grapple with oversupply Nevertheless, suppliers are progressively cutting back production, the benefits which are expected to materialize in the third quarter Given the substantial operating losses incurred by these suppliers, these factors should curtail the decline in ASP of consumer DRAM to 0~5% in 3Q23
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/06/07
The ongoing global economic downturn continues to impact consumer confidence in the market TrendForce reports that the global production volume of smartphones in 1Q23 was only 250 million units—marking a 195% YoY decrease This represents not only the greatest annual decrease but also a historic low in quarterly production since 2014
Samsung observed a slight surge in Q1 production thanks to the launch of its Galaxy S23 series, reaching 615 million units—a 55% QoQ rise However, TrendForce predicts a nearly 10% drop in Q2 production due to weakening demand for new models Apple faced a substantial 275% QoQ drop in smartphone production in Q1, delivering a total of 533 million units The new iPhone 14 series accounted for approximately 78% of this figure, an improvement from the same period last year Nonetheless, as the company navigates the transition period between model launches, a projected decrease of 20% is expected in Q2
In light of unsatisfactory market conditions and necessary inventory adjustments, brands such as Oppo (which includes Oppo, Realme, and OnePlus) made strategic moves to reduce production in Q1 to 268 million units, a 17% QoQ decrease However, TrendForce forecasts a more than 30% rise in Q2 production, attributed to successful inventory management and a moderate demand resurgence in Southeast Asia and other regions It’s worth mentioning that, in addition to continuously strengthening its market share of high-end models in China, Oppo has achieved notable sales success in South Asia, Southeast Asia, and Latin America In fact, its overseas market accounts for nearly 60% of its total sales
In the first quarter, Xiaomi (which includes Xiaomi, Redmi, POCO) saw its production volume dip to 265 million units—a 274% quarterly decrease This decline can largely be attributed to a global dip in consumer confidence and an overstocked inventory of finished products at Xiaomi, leading to restrained production plans Due to ongoing inventory adjustments set for the second quarter, quarterly production growth is projected to be capped, with a modest estimated increase of around 20% Concurrently, Vivo (including Vivo, iQoo) reported a production volume of 20 million units for the first quarter—a 142% quarterly decrease While China continues to be the primary market for Vivo's sales, Q2 demand continues to remain stagnant in the Chinese market, following the reopening of its borders As a result, the quarterly production volume is anticipated to show a modest increase of around 10%
The continuous economic slump has led to increased activity in the used phone and repair markets, which could potentially hinder Q2 smartphone production growth Notwithstanding, Q2 production is forecasted to reach 260 million units, demonstrating a QoQ increase of around 5% However, due to the unfavorable economic environment, TrendForce forecasts that smartphone production will still fall by 10% when compared to the same period last year
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/05/23
TrendForce reports that the global pandemic and extended average device replacement cycles of 36 to 42 months have curtailed smartphone production growth Consequently, production levels have yet to rebound to pre-pandemic levels Despite these challenges, the market for refurbished phones has been expanding, representing about 11% of the total market share in 2022 with approximately 167 million devices The largest market for these pre-owned devices remains China, with Europe following behind in second place Interestingly, India’s burgeoning market, bolstered by its vast population, is developing rapidly and is projected to potentially rival China’s sales of refurbished phones by 2026 As far as brand performance goes, Apple dominated the market in 2022, capturing 45~50% of sales, while Samsung claimed the runner-up position with a 25~30% market share
The recent surge in the second-hand smartphone market can be largely attributed to increasing demand from emerging countries, and to the challenging nature of hardware and software innovation for new smartphone models This difficulty in innovating is leading to a diminished desire among consumers to upgrade their devices Brands and retailers have introduced trade-in promotional models to overcome this bottleneck in new device production These initiatives not only stimulate the sales of new devices, but also ensure that replaced old devices are reused in the mid-tier market, or as transition devices for consumers in emerging countries moving from feature phones to entry-level smartphones Furthermore, the profitability of the second-hand smartphone market has attracted a number of e-commerce platforms in recent years
Notably, a performance surplus when it comes to key smartphone components is seen as another contributing factor to the elongation of the replacement cycle and prosperity of the second-hand market Components, such as application processor (AP) chips are being continually updated, while the data transfer speed of mobile DRAM significantly surpasses that of other applications In response, Android brands have been consistently boosting the memory capacity of their flagship models due to marketing considerations Additionally, smartphone brands are dedicated to concurrently upgrading the software and hardware of their camera lenses Their image quality now rivals that of entry-level cameras, making them a highly-suitable option for everyday use Finally, the swift transition to OLED display panels—coupled with increased frame rates—enhances the attractiveness of these devices
Furthermore, the prolonged oversupply of both panel and memory components has prompted a significant plunge in ASP From the perspective of display panels, this downward trend has benefited the repair industry Meanwhile, a decline in memory prices has notably increased the capacity of DRAM and NAND Flash in new devices Consequently, the replacement cycle has been stretched even further, providing a boost to the used phone market All these contributing factors are fostering a circular economy in the smartphone industry, and facilitating the ongoing expansion of the second-hand phone market
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/03/28
TrendForce reports that several suppliers, such as Micron and SK hynix, have started scaling back DRAM production The ASP of DRAM plunged 20% in 1Q23, and this price decline is predicted to slow down to 10~15% next quarter It’s uncertain whether or not demand will recover in 2H23 Therefore, the ASP of DRAM has continued to fall as inventory levels are high from the suppliers’ side, and prices will only rebound if there is a significant decrease in production
PC DRAM: Purchase quantity from buyers has fallen drastically over the past three quarters; buyers have around 9~13 weeks of PC DRAM stock remaining Despite suppliers having already cut production in the PC DRAM segment, DDR4 8 GB module is still likely to fall by more than 10% in 2Q23 There is a possibility that PC OEMs may purchase more DRAM because prices have been down to a relatively low level, but it is still under observation whether or not this can mitigate the inventory overstock situation from the suppliers’ side TrendForce predicts the ASP of PC DRAM will fall between 10~15%
Server DRAM: Demand for server DRAM from OEMs and cloud service providers has been sluggish due to inventory adjustments In addition, consumer demand looks less than promising, prompting suppliers to increase the ratio of server DRAMs in their product mixes However, this resulted in a massive inventory pile-up during 1Q23 While most suppliers have lowered their capacity utilization rates, their efforts have yet to make a noticeable impact on declining prices TrendForce predicts that the ASP of server DRAM will fall 13~18% in 2Q23
Mobile DRAM: The DRAM inventories of smartphone brands have returned to a relatively healthy level However, these brands have mostly adopted a conservative plan of action for smartphone production, which means that buyer demand for mobile DRAM will be constrained in 2Q23 As a result, suppliers are under a great deal of pressure to sell off as much stock as possible Even with cutbacks being made in mobile DRAM production, reversing their current overstock will continue to be a challenge for these companies TrendForce predicts the ASP of mobile DRAM to continue falling as we move into 2Q23 Nevertheless, there is a possibility that the decline will shrink to 10~15%
Graphics DRAM: Buyers have been stocking up on graphics DRAM rather conservatively, while even AI has failed to make a considerable impact on demand Taking a mainstream product, the GDDR6 16 Gb, for example, TrendForce predicts ASP will fall 10~15% QoQ in 2Q23 due to constrained demand The DRAM industry is currently in the midst of transitioning from 8 to 16 Gb; Samsung’s GDDR6 8 Gb will reach its EOL at the end of the year Beginning 2024, SK hynix will be the only company still offering 8 Gb products Rolling back production could finally present an opportunity for the price of GDDR6 8 Gb to stop fluctuating aggressively
Consumer DRAM: Demand for networking devices has been relatively stable However, buyers have dialed back their procurement activities as of late given that existing orders have been completed These buyers appear to have conservative estimations of the growth potential of network-related demand this year, and the application market, which includes television, will be unable to support demand for the consumer DRAM market Supply continues to outpace demand even as suppliers reduce their production considerably TrendForce predicts that the ASP of consumer DRAM will fall 10~15% in 2Q23
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/03/09
Smartphone brands hoped that the promotional activities related to the year-end holiday season or initiated by e-commerce companies would lead to a significant reduction in channel inventory near the end of 2022 However, the recent downturn of the global economy continued to impact consumer confidence in 4Q22, so smartphone sales were lower than expected and thereby dragged down the speed of inventory consumption Moreover, the labor shortage problem at Foxconn’s electronics assembly base in the Chinese city of Zhengzhou affected Apple’s efforts to raise iPhone production in 4Q22 According to TrendForce’s latest research, quarterly global smartphone production totaled around 301 million for 4Q22, reflecting a QoQ growth of 4% and a YoY decline of 155%
Earlier in 1H22, China’s enforcement of its zero-COVID policy and the Russia-Ukraine military conflict caused the demand for consumer electronics to plunge Later in 2H22, the global economy experienced a decline that was worse than expected as factors such as high inflation, food shortages, and rising energy prices came into play As a result, consumer demand was further weakened Besides these negative factors, the high level of channel inventory was also a major reason as to why smartphone brands suffered a drop in annual device production Based on TrendForce’s calculation, annual global smartphone production fell by 106% YoY to 1192 billion units for 2022 This YoY decline was larger than one recorded for the year when the COVID-19 pandemic first emerged
Despite the labor shortage at Foxconn’s Zhengzhou base, 4Q22 was the peak season for the sales of the latest iPhone models, and Apple was able to raise iPhone production against market headwinds by 447% QoQ to 735 million units With this performance, Apple became the world’s top smartphone brand by quarterly production For the whole 2022, Apple posted around 233 million units in iPhone production and took second place in the global ranking of brands by annual production Moving into 2023, Apple will focus on upgrading the hardware specifications of its iPhone models and have its second partner for EMS start assembling the iPhone Pro models Moreover, Apple will continue to expand its device production in India
Samsung again lowered the capacity utilization rates of its device assembly lines last December in order to balance out its smartphone inventory As a result, Samsung’s smartphone production fell by 92% QoQ to 583 million units for 4Q22 The brand’s lowest quarterly production figure for the year was also recorded in the fourth quarter Regarding the ranking for the entire 2022, Samsung remained at the top with around 258 million units and a YoY drop of 61% Going forward, Samsung will pay more attention to the high-end segment of the smartphone market in order to yield a higher profit growth
Chinese brands Xiaomi (including Redmi, POCO, and Black Shark), OPPO (including Realme and OnePlus), and Vivo (including iQoo) were third, fourth, and fifth respectively in the ranking by quarterly production for 4Q22 All of them posted a decline for the quarter and the entire 2022 TrendForce’s latest investigation finds that Xiaomi prioritizes the reduction of channel inventory for the first quarter of this year, so its device production in the same period will also be affected by this decision OPPO managed to raise the share of overseas markets in its overall smartphone sales to almost 60% by the end of 2022, but its device production is currently being constrained by the high level of channel inventory Therefore, the brand will again be scaling back output in 1Q23 as it concentrates on inventory adjustments
As for Vivo, TrendForce points out that it was the first among brands for Android smartphones to begin adjusting inventory, and its inventory level was again relatively healthy at the end of 2022 However, by being aggressive in carrying out this task, Vivo’s annual smartphone production fell under the threshold of 100 million units for the first time in 2022 Moreover, Vivo still mainly concentrates its efforts on the domestic market that has already become very saturated At the same time, Honor as the competing Chinese brand has been able to grow its share of the domestic market, thereby becoming more of a direct threat to Vivo Additionally, Vivo is still holding a fairly conservative outlook for the domestic market, even though there is a widespread anticipation that China’s domestic demand will rebound as the country’s economy recovers from the latest wave of COVID-19 lockdowns
Global Smartphone Production Is Projected to Rise by 09% for 2023 as Channel Inventory Eventually Returns to Healthy Level
Due to brands’ lackluster sales performances near the end of 2022, the pressure from the high level of channel inventory is going to persist through 1Q23 Furthermore, China’s domestic demand has yet to make a significant recovery following the lifting of the rules for controlling COVID-19 outbreaks Therefore, smartphone production will again show a drop in 1Q23 TrendForce currently forecasts that global smartphone production will reach around 251 million units for 1Q23, reflecting a YoY decline of 189% TrendForce also notes that channel inventory as a whole will return to a fairly optimal level within 1H23 as brands continue to make adjustments Looking further ahead to 2H23, brands’ performances will depend on the extent of the economic turnaround in the US and Europe The extent of the positive effects that the lifting of pandemic-related restrictions on China’s economy will be also be a major factor in driving smartphone production TrendForce currently projects that global smartphone production for the whole 2023 will still rise a bit by 09% YoY to 1202 billion units
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
