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2023/10/26
TrendForce reports that Q4 contract prices for mobile DRAM are poised to see an increased quarterly rise of 13–18% But that’s not all—NAND Flash is also joining the party, with contract prices of eMMC and UFS expected to climb by approximately 10–15% in the same quarter This quarter is set to star mobile DRAM, traditionally the underperformer in profit margins compared to its DRAM counterparts, as it takes the lead in this round of price increases
This expanded quarterly increase can be attributed to several factors On the supply side, Samsung’s significant production cut and Micron's rolling out a price hike of more than 20% continue to lay the foundation for industry-wide confidence in price increases As for demand, the latter half of 2023 saw mobile DRAM and NAND Flash (eMMC, UFS) demand not just buoyed by the usual suspects—the traditional peak season—but also boosted by catalysts such as the Huawei Mate 60 series This has prompted other Chinese smartphone brands to expand their production targets The surge in demand within a short period has become one of the reasons pushing Q4 contract prices upward
Overall, memory prices are expected to continue trending upward in 1Q24, according to TrendForce’s projection However, the traditional off-season lull and reduced workdays courtesy of the Lunar New Year might cool the fervor for price increases slightly Nonetheless, current projections still anticipate continued growth in first-quarter contract prices for mobile DRAM and NAND Flash (eMMC, UFS) next year The rate of increase will depend on whether suppliers maintain a conservative production strategy and whether there is enough consumer demand to bolster the market
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email the Sales Department at SR_MI@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit at https://wwwtrendforcecom/news/
2023/10/17
TrendForce research indicates a significant rise in NAND Flash contract prices in the fourth quarter, with an anticipated hike of approximately 8~13% This increase has been largely attributed to stringent production controls exercised by suppliers However, the outlook for 2024 suggests challenges in maintaining this upward price trajectory The continuation of this rising trend hinges on persistently reducing output and the resurgence of demand for enterprise SSDs within the server market Without solid demand, the momentum of this price surge could falter
Client SSD: Active price increases by suppliers and module makers have motivated PC OEMs to stock up at relatively lower price points, leading to procurement volumes higher than actual demand Suppliers aiming to expand bit shipments have launched promotions in Q3, leaving little room for further price declines for client SSDs Meanwhile, reduced production of mainstream processes and fewer suppliers for high-end client SSDs have endowed suppliers with better bargaining power Consequently, both high-end and low-end products are expected to increase concurrently, with 4Q23 PC client SSD contract prices projected to rise by 8~13%
Enterprise SSD: North American CSPs still hold significant amounts of inventory, but demand from some server brands has recovered compared to 1H23, gradually increasing stocking momentum In China, orders have picked up as CSPs’ inventories have dropped to reasonable levels, coupled with increased demand during the peak season for second-tier e-commerce vendors Overall, procurement demand for enterprise SSDs in the fourth quarter is expected to grow With NAND wafer prices leading the increase since August and suppliers adopting a firmer stance in negotiations, Q4 enterprise SSD contract prices are projected to rise by approximately 5~10%
eMMC: The second half of the year primarily relies on TV shipments and certain smartphone demand for support, yet actual purchasing momentum is not vigorous Amid suppliers’ aggressive price-hiking stance—extending from wafers to finished products—module makers have also raised quotes to reflect increased costs Buyers, with relatively low inventory, have no choice but to procure in advance, thereby driving up eMMC prices, with suppliers increasing targets for size, capacities, and applications Concurrently, due to production costs extending to mainstream processes for eMMC, availability is dwindling, and clients may not fully receive their requested volumes Therefore, eMMC contract prices in 4Q23 are expected to grow by approximately 10~15%
UFS: The stage is set for a procurement boost in the fourth quarter, thanks to a trifecta of new releases, seasonal stocking, and some brands playing market share defense Smartphone OEMs, wary of a changing tide, are scrambling to bump up component reserves to safe levels UFS 40 has experienced the most significant price increase due to its limited supply as well as the product’s reliance on advanced manufacturing processes While other mature UFS products have ample stock and numerous suppliers, OEMs are unwilling to continue selling at low prices for a loss Instead, they have chosen to adjust and increase prices It’s estimated that UFS contract prices will see a quarterly increase of 10~15% in the fourth quarter
NAND Flash Wafer: After Samsung reduced its production by a staggering 50%, other suppliers have followed suit, adopting a conservative approach to wafer investment This reduction in production—ongoing for over six months for specific processes and capacities—has led to a pronounced, structural tightness in supply across the market This development positions suppliers favorably, granting them significant leverage over pricing Observations for the fourth quarter indicate a dearth of affordable supplies available for purchase, yet buyers are persisting in maintaining substantial inventory levels, continuing their procurement efforts unabated In light of these conditions, suppliers are presently vying to elevate prices swiftly beyond cash costs Projections for the fourth quarter suggest an uptick in NAND Flash wafer contract prices of approximately 13~18%
For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email the Sales Department at SR_MI@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit at https://wwwtrendforcecom/news/
2023/09/12
TrendForce’s latest research paints a vivid picture: Q2 saw the NAND Flash market still grappling with lackluster demand and being significantly outpaced by supply The ASP of NAND Flash also took a hit, tumbling 10–15% Nevertheless, there was a silver lining as bit shipments grew by 199% QoQ from a low baseline in 1Q23 To sum up, the Q2 landscape of the NAND Flash sector witnessed a 74% QoQ growth in revenue, reaching US$9338 billion
From Q2, Samsung began reining in production with a further squeeze expected for the third quarter With inventories set to thin out, price hikes loom on the horizon, possibly offering a remedy to the chronic supply-demand imbalance Yet, a crowded supplier landscape in the NAND Flash sector means that many players, faced with hefty inventories, will likely continue aggressive sales into Q3 Forecasts suggests a deceleration in ASP decline for NAND Flash products in Q3 to 5–10% Riding the stockpiling momentum for the high season, bit shipments are set to rise, propelling Q3 revenue growth past the 3% threshold
Q2 was a banner quarter for Micron, outpacing its peers with a 276% spike and raking in US$121 billion This resurgence in revenue performance came chiefly from shrinking inventories in PC and mobile markets, particularly as client SSDs benefited from expanding average storage capacities—setting a new record for bit shipments in a single quarter While the industry at large is adopting a production cut strategy, Micron’s gaze is set on a more balanced supply-demand scenario in 2H23 That said, an overarching view of the year hints that high inventory levels will continue to suppress the recovery of the NAND Flash industry The market anticipates maintaining a low bit output supply until 2024
SK Group (SK hynix & Solidigm) and Western Digital both benefited from a continuous slump in SSD inventories and an uptick in the storage capacities of consumer electronics devices This combo fueled bit shipment growth, bolstering their second-quarter revenues SK Group’s performance was especially noteworthy, logging a quarterly jump of roughly 266%, while Western Digital enjoyed a 54 % bump
On the flip side, Samsung and Kioxia found the going tough in Q2, being the sole players to register revenue shrinkage The fall in ASP overshadowed their bit shipment growth Samsung’s revenue dipped by 1%, settling at around US$29 billion While the tech world remains a buzz with AI servers, it’s the general-purpose server segment that’s most influential to NAND demand, leaving NAND Flash revenues untouched by the AI boom Kioxia faced its own challenges, with Q2 revenues contracting by about 13% to US$183 billion
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/
2023/08/31
Recently, the spot market for NAND Flash chips has seen a rise in active price inquiries for certain products, a movement driven by successful increases in wafer contract prices TrendForce reports this uptick primarily stems from negotiations in late August between NAND Flash suppliers and key Chinese module makers These discussions led to a new wafer contract that successfully boosted the price of 512 Gb wafers by approximately 10%
Other suppliers have also raised prices for their comparable products, signaling a shift in supplier sentiment: they are now less inclined to finalize deals at lower prices This change has contributed to a short-term surge in the wafer spot market Nevertheless, whether this surge in procurement is supported by actual end-user demand remains uncertain, as these orders have arisen in reaction to adjustments in supply-side pricing
Suppliers remain firm on pricing and seek to accelerate bottoming out through production cuts
Beginning in 4Q22, Kioxia and Micron took the lead in production cuts, followed by Samsung in the 2Q23 Therefore, the effects of these cuts will not be fully realized until 2H23 TrendForce reports that Samsung initially reduced its production by 25%, and this figure is expected to increase to 35% by 4Q23 This indicates persistent oversupply pressures in the market Without proactive interventions from suppliers, achieving a bottoming-out and rebound in NAND Flash-related product prices will be challenging, even if demand modestly recovers in 2H23 Consequently, major NAND Flash suppliers are currently controlling supply by actively reducing production, in a bid to halt further price erosion and prevent prices from hitting new lows
In light of the recent uptick in NAND Flash wafer prices, module makers such as Kingston and Phison are experiencing increased cost pressures As a response, there has been a growing trend among these companies to announce their intentions to raise the prices of end products, particularly in the SSD segment Recently, these suppliers have reverted to official pricing for transactions, ceasing to allow customers to negotiate for lower prices
TrendForce believes that, as suppliers continue to hold the upper hand in determining the prices for wafers and related NAND Flash products, short-term market price fluctuations are to be expected Korean suppliers are likely to further cut NAND Flash production in the fourth quarter with the aim of stabilizing prices However, when contrasted with actual end-user demand, buyers remain cautious—even pessimistic regarding future demand prospects Consequently, even if purchasing costs are increased, this is unlikely to stimulate a surge in order volume As such, the sustainability of the current uptrend in wafer spot market prices is still worth observing
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/
2023/08/30
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 Additionally, capital expenditure for general-purpose servers is expected to be weakened due to competition from AI servers Considering the low baseline set in 2023 and the current low pricing for some memory products, TrendForce anticipates YoY bit demand growth rates for DRAM and NAND Flash to be 13% and 16%, respectively Nonetheless, achieving effective inventory reduction and restoring supply-demand balance next year will largely hinge on suppliers’ ability to exercise restraint in their production capacities If managed effectively, this could open up an opportunity for a rebound in average memory prices
PC: The annual growth rate for average DRAM capacity is projected at approximately 124%, driven mainly by Intel’s new Meteor Lake CPUs coming into mass production in 2024 This platform’s DDR5 and LPDDR5 exclusivity will likely make DDR5 the new mainstream, surpassing DDR4 in the latter half of 2024 The growth rate in PC client SSDs will not be as robust as that of PC DRAM, with just an estimated growth of 8–10% As consumer behavior increasingly shifts toward cloud-based solutions, the demand for laptops with large storage capacities is decreasing Even though 1 TB models are becoming more available, 512 GB remains the predominant storage option Furthermore, memory suppliers are maintaining price stability by significantly reducing production Should prices hit rock bottom and subsequently rebound, PC OEMs are expected to face elevated SSD costs This, when combined with Windows increasing its licensing fees for storage capacities at and above 1 TB, is likely to put a damper on further growth in average storage capacities
Servers: The annual growth rate for the average capacity of server DRAM is estimated to reach 173% This surge is primarily fueled by generational transitions in server platforms, a heightened dependency on RAM that is coordinated with CPU cores in specific CSP operations, and the high computational load requirements of AI servers Enterprise SSDs: The estimated annual growth rate of average capacity stands at 147% For CSPs, the rollout of processors supporting PCle 50 suggests that inventory levels for these OEMs should return to normal by early next year, likely prompting an uptick in the procurement of 8 TB products On the brand side for servers, while the sharp decline in NAND Flash prices is propelling an increase in 16 TB deployments, the contribution of AI servers to this growth remains relatively limited
Smartphones: The annual production growth rate for smartphones in 2024 is estimated to be a modest 22%, largely impacted by a global economic downturn TrendForce cites this as the primary reason for the sluggish growth in demand volume Thanks to multiple consecutive quarters of declining memory prices, brands are increasingly focusing on hardware competition Consequently, the average DRAM memory capacity in smartphones is projected to rise by approximately 143% in 2023 Given that the ASP of mobile DRAM is expected to remain at a relatively low point in 2024, this trend is likely to persist, potentially leading to an additional 79% growth in average device memory capacity for the year
UFS & eMMC: Factors such as growing demand for image storage and increased 5G penetration are expected to drive up the average storage capacity in smartphones However, as suppliers scale back production to set the stage for potential price hikes, smartphone OEMs are projected to exercise greater caution in cost management in 2024, potentially leading to fewer mid-to-low-end models offering over 1TB of storage On a related note, the absence of enthusiasm for QLC products among smartphone OEMs likely presents an obstacle for suppliers aiming to nudge consumers toward capacity upgrades via lower-cost options With smartphone storage baselines continually rising and given Apple's current lack of plans to introduce iPhone models exceeding 1TB of storage, TrendForce anticipates that the annual growth rate for average smartphone storage capacity will hover around 13% in 2024
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/
