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2023/01/09
TrendForce’s latest analysis of the DRAM market finds that the inventory pressure on suppliers remain significant due to the persistently weak demand for consumer electronics Among the top three DRAM suppliers, only Samsung has seen a slight drop in inventory level thanks to its highly competitive pricing strategy To prevent DRAM prices as a whole from making another sharp dive, a few suppliers such as Micron have been cutting production Therefore, the QoQ decline in DRAM prices are projected to shrink to around 13~18% for 1Q23 However, the slump will have yet to reach the bottom at that time Regarding the QoQ changes in the prices of the major categories of DRAM products for 1Q23, PC DRAM and server DRAM are projected to again register a drop that is near 20% Conversely, mobile DRAM will experience the smallest price decline because its profit margin is ready the thinnest
In the PC DRAM segment, PC OEMs have lowered procurement quantity for two consecutive quarters as sales of notebook (laptop) computers have been lackluster Now, moving into 1Q23, PC OEMs hold around 9~13 weeks of PC DRAM inventory Even though they are working hard to consume the existing stock, the traditional low season acts a powerful constraint The overall PC DRAM bit output is expected to fall during 1Q23 because Micron has already made a marginal cut to its PC DRAM production, and SK Hynix will soon follow suit However, supply glut will still be significant in the PC DRAM segment The top three suppliers have been aggressive in lowering prices for DDR5 products, so the DDR5 penetration rate in the PC DRAM segment is projected to reach almost 20% in 1Q23 Regarding QoQ changes in PC DRAM prices for 1Q23, DDR5 products will experience a drop of around 18~23%, and DDR4 products will experience a drop of around 15~20% The ASP of PC DRAM products is projected to fall by around 15~20% QoQ for 1Q23
Turning to the server DRAM segment, server demand is going to fall during 1Q23 because of the effects of the traditional low season, inventory adjustments, and the recent weakening of the global economy North American cloud service providers have already started to dial down server demand in terms of procurement quantity and the pace of server deployment However, suppliers continue to raise the share of server DRAM in production, so this segment continues to face mounting inventory pressure While some suppliers are cutting production, this is not enough to effectively limit the decline in server DRAM prices Regarding QoQ changes in server DRAM prices for 1Q23, DDR5 products are expected to suffer a decline of 18~23%, which is slightly larger compared with the projected drop experienced by DDR4 products for the same period However, the DDR5 penetration rate in the server DRAM segment is projected to reach just around 10% in 1Q23 Thus, DDR4 products are going to determine the extent of the general decline Currently, the ASP of server DRAM products is projected to fall by around 15~20% QoQ for 1Q23
The mobile DRAM segment has benefited from about six quarters of inventory adjustments on the part of smartphone brands Currently, smartphone brands hold 5~7 weeks of mobile DRAM inventory on average, so the inventory situation is fairly optimal On the other hand, smartphone sales have been in a slump A rebound is not expected in the short term, especially after the latest change in China’s policy on controlling COVID-19 outbreaks With smartphone brands lowering their device sales targets for 2023, there will be a certain degree of difficulty when it comes to inventory consumption in the mobile DRAM segment However, mobile DRAM quotes are starting to show a more moderate decline than before because suppliers have scaled back production, and the effect of this will become more prominent over time Moreover, mobile DRAM already has the lowest profit margin compared with other categories of DRAM products Since the market consensus is that the demand for mobile DRAM products will remain weak, slashing prices further will do little in helping suppliers to capture more market share Hence, TrendForce projects that the QoQ decline in mobile DRAM prices will narrow to around 10~15% for 1Q23
With regard to the graphics DRAM segment, shipments are going to ramp up for graphics cards and notebook computers featuring the latest GPUs However, the overall demand for consumer electronics is sluggish, and the previous period for inventory adjustments was quite long Therefore, graphics DRAM buyers maintains a cautious procurement strategy Furthermore, demand growth still lagged behind supply growth in graphics DRAM segment during 4Q22, so inventory continues to pile up for this product category on the supply side Additionally, for the specifications of the mainstream graphics DRAM solutions, there will be a full-scale shift in buyers’ demand from GDDR6 8Gb to GDDR6 16Gb during 2023 With the demand for them becoming more limited, graphics DRAM products based on GDDR6 8Gb will experience more dramatic price fluctuations TrendForce currently projects that the ASP of graphics DRAM products will fall by about 18~23% QoQ for 1Q23, but the decline could get larger if suppliers continue to undercut each other in this segment
Lastly, in the consumer DRAM segment, prices have yet to leave the downturn phase as there are no signs of buyers ramping up procurement activities Also, the flow of consumer DRAM orders related to networking devices was steady before but has now started to gradually decelerate this first quarter Due to these developments, shipments of consumer DRAM products on the whole are going to slide Even though Micron began to cut production in November last year, suppliers’ DRAM inventories have been climbing to new heights This segment will continue to experience excess supply unless suppliers undergo several quarters of inventory adjustments and make larger production cuts TrendForce projects that the ASP of consumer DRAM products will fall by 18~23% QoQ for 1Q23 as supply glut persists in this segment
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/
2022/10/03
According to a TrendForce investigations, memory pricing began to decline from 4Q21 due to weakening demand for certain consumer electronics Coupled with the impact of rising inflation, the Russian-Ukrainian war, and pandemic policies, demand in peak season was weak, resulting in inventory pressure that has extended from the buyer side to manufacturers In response to the aforementioned situation, Micron announced last week that it would cut production of DRAM and NAND Flash, becoming the first major memory manufacturer to officially reduce its capacity utilization plan In terms of NAND Flash, the market situation is more severe than that of DRAM As the average contract price of mainstream capacity wafers has fallen to their cash cost and is approaching the periphery of selling at a loss for various manufacturers, Kioxia also announced that it will reduce NAND Flash capacity utilization by 30% from October on the heels of Micron’s announcement
In terms of DRAM, current contract pricing remains higher than the total production cost of various mainstream suppliers Therefore, compared with NAND Flash, it remains to be seen whether there will be a significant reduction in production In addition to mentioning the slight reduction in capacity utilization in this sector currently, Micron mainly emphasized its sharp downward revision of capital expenditures in 2023 and that the annual growth of DRAM production bits next year will only be around 5% TrendForce believes, according to Micron, to actualize such conservative bit growth means that there is still room for a significant downward revision in capacity utilization and the extent to which Micron's subsequent production reductions are implemented remains to be seen
In terms of NAND Flash, Micron originally planned to gradually increase its proportion of 232-layer products from 4Q22 However, with the implementation of the company’s decision to reduce production, Micron's mainstream processes are estimated to remain dominated by 176-layer products in 2023, while wafer starts in legacy processes will also fall Kioxia and WDC originally planned to migrate to 162-layer products starting in 4Q22 but WDC slowed CapEx in 2023 When funding is hard to come by and demand visibility poor, the proportion of 162-layer products will fall greatly and the company’s original plan to replace mainstream 112-layer products in 2023 will not be achieved
More manufactures limiting bit output cannot be ruled out as only large-scale production reduction can reverse supply/demand imbalance in 2023
After analyzing 2023 supply and demand in the memory market, due to a conservative demand outlook, DRAM and NAND Flash look to be greatly oversupplied in each quarter and inventory pressure will continue to accelerate in 1H23 In the DRAM sector, after Micron led the way to announce a DRAM production reduction plan that will fall far below historical levels of supply-side bit growth, the 2023 DRAM Sufficiency Ratio will contract from the 116% previously forecast by TrendForce to less than 10%, helping to alleviate rapidly deteriorating inventory pressure However, more suppliers must be relied on to join in the actual reduction of DRAM production in the future in order to reverse the supply and demand imbalance next year
It is imperative to reduce bit supply in the NAND Flash field due to the large number of competitors and the fact that manufacturers have yet to encroach on the physical limits of manufacturing Considering that supply-side bit growth from Micron and Kioxia has been downgraded, the 2023 NAND Flash Sufficiency Ratio will drop significantly from the original estimate of 101% to 56% Under the expectation that more NAND Flash suppliers will join the ranks reducing production due to loss considerations, inventory pressure is expected to ease in the 2Q23, while price declines are expected to diminish in 2H23
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/
2022/08/03
According to TrendForce, DRAM market demand bit growth will only amount to 83% in 2023, sub-10% for the first time in history, and far lower than supply-side bit growth of approximately 141% Data indicates the DRAM market to be severely oversupplied at least in 2023 and prices may continue to decline NAND Flash is still in a state of oversupply and, although prices are expected to fall in the first half of next year, NAND Flash has built-in price elasticity compared to DRAM and average prices are expected to stimulate density growth in the enterprise SSD market after declining for several consecutive quarters Demand bits are expected to grow by 289%, while supply bits will grow by approximately 321%
From the perspective of various applications, rising inflation continues to impact demand in consumer markets, so the primary goal of memory brands has been to prioritize inventory correction Especially in the past two years, a shortage of upstream components caused by the pandemic led memory brands to overbook purchase orders while sluggish sales on the distribution channel side have resulted in slow depletion of current notebook inventory, resulting in a further weakening of notebook demand in 2023 In terms of PC DRAM, the proportion of DDR4 and LPDDR4X in PC applications will fall further while the penetration rate of LPDDR5 and DDR5 continues to rise However, the price premium of DDR5 will limit the growth of density in PCs DRAM density in PCs is estimate to increase by approximately 7% annually in 2023 If manufactures cut DDR5 pricing more aggressively next year, installed capacity may be driven up to 9%, depending on whether DDR5 price concessions can be effectively reconciled with DDR4
In terms of PC client SSDs, estimated average installed capacity only increased slightly by 11%, the lowest in the past three years The primary reason is that in the past two years, notebook shipments had spiked due to pandemic demand, simultaneously driving SSD installation rate Average capacity has readily driven up average capacity growth due to the previous tightening of SSD master IC supply However, notebook computer whole device costs have maintained an upward trend in the past two years due to the rising price of components, leading to branded PC manufacturers planning relatively conservative SSD capacity demand bits
Since server shipment forecasts have demonstrated impressive growth in past years, subsequent growth momentum will slow since computational fundamentals are already high In terms of Server DRAM, due to the advent of fifth generation memory specifications, the new Sapphire Rapids and Genoa platforms have increased the cost of whole devices and average server capacity has begun to encounter restrictions Instead of the prior practice of merely upgrading the capacity of a single module, demand side considerations will focus more on hardware costs and the practice of ESG strategies Average capacity increase of server DRAM is forecast to be limited in 2023, with an annual increase of approximately 7%
In terms of Enterprise SSD, the new Sapphire Rapids and Genoa platforms have begun to upgrade to support the PCIe 50 transfer standard in order to meet the needs of HPC and big data computing The capacity of SSDs must also be upgraded simultaneously to ensure PCIe 50 transfer performance This trend will contribute to the growth of the average capacity of enterprise SSDs next year In addition, as the overall NAND Flash oversupply continues into 1H23, a reduction in NAND Flash pricing will increase the shipment ratio of products above 4TB and the average annual growth rate of enterprise SSD capacity in 2023 is estimated to be 26%
As inflation rises, world economies are generally holding a pessimistic view of the consumer market TrendForce believes, cyclical replacement demand and new demand in emerging regions will lead to a slight increase in smartphone production In terms of Mobile DRAM, the Android camp currently has sufficient installed capacity to meet the needs of daily systems operation Therefore, barring impetus provided by innovative applications and considering the cost of whole devices and the low proportion of high-end sales, smartphone brands’ willingness to increase installed capacity has fallen accordingly In terms of the iOS camp, a high degree of operating system optimization reduces demand for mobile DRAM capacity Mobile DRAM density is estimated to increase by only 5% annually in 2023
In terms of smartphone NAND Flash, as the penetration rate of 5G smartphones gradually expands and applications require larger installed capacity to meet the needs of high-quality video recording, basic momentum can be seen for increasing NAND Flash density in smartphones At the same time, the iPhone product portfolio is still moving towards higher capacity across the board and high-end Android models have followed suit with 512GB as standard, while storage in mid- and low-end models will increase with subsequent upgrades in hardware specifications Thus, there is still room for growth in overall average capacity Annual growth of smartphone NAND Flash density is forecast to be maintained at 221% in 2023, slightly lower than that in 2022, but still at a high level
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/
The Webinar, ”COMPUFORUM 2022 Webinar: Diverse Market Opportunities Generated by Applications of Cyber-Physical Systems” will start from June 15, 2022 The TrendForce research team including Mark Liu, Caron Ju, Bryan Ao, and Alex Chen will present speeches regarding memory, servers, and datacenters, respectively
【Info】
When：Wednesday, June, 15
Where：COMPUFORUM 2022 Webinar (Free to access)
2022/07/04
According to the latest TrendForce research, despite the rapid weakening of overall consumer demand in 1H22, DRAM manufacturers previously presented a tough stance on price negotiations and gave little ground, steadily conveying inventory pressure from buyers to sellers Facing uncertain peak-season demand in 2H22, some DRAM suppliers have begun effectively expressing clear intentions to cut prices, especially in the server field, where demand is relatively stable, in order to reduce inventory pressure This situation will cause 3Q22 DRAM pricing to drop from the previous 3~8% to nearly 10% QoQ If a price war is incited due to companies competing for sales, the drop in prices may exceed 10%
PC OEMs have continuously downgraded their shipment prospects With average DRAM inventory levels at more than two months, unless a huge price incentive exists, there is no urgent demand for procurement At the same time, thanks to continuous adoption of the advanced 1Z/1alpha process, supply continued to increase in 3Q22 DDR4 output could not be effectively reduced due to high pricing limiting the penetration rate of DDR5 The price decline of PC DRAM in 3Q22 is revised to 5~10%
At present, server DRAM inventory clients have on hand is approximately 7 to 8 weeks and the buyers’ consensus is that the price of DRAM will continue to fall due to increased inventory pressure on sellers If manufacturers are willing to provide attractive quotations, buyers are willing to discuss the possibility of volume commitments As advanced manufacturing processes progress dynamically and terminal consumer products continue to weaken, server DRAM has become the only effective sales outlet Therefore, Korean manufacturers were the first to signal a willingness to discuss a quarterly pricing reduction of more than 5%, which expanded the decline of server DRAM to 5~10% in 3Q22
Smartphone production targets continued to be downgraded due to the sluggish economy In addition, smartphone brands are also pessimistic regarding future prospects, casting a gloom over their attitude towards materials stocking However, the output of mobile DRAM still increased in 3Q22 due to the adoption of advanced processes among several manufacturers, increasing pressure on suppliers This increases the willingness of sellers to offer price concessions Given the polarized disparity between supply and demand, the pricing decline of mobile DRAM is forecast to expand to 8-13% this quarter
Demand for graphics DRAM procurement has weakened due to inflation-related reduction in consumer products demand and a faltering cryptocurrency market At the same time, migrating graphics DRAM production capacity to other types of DRAM products in not as easy as migrating standard DRAM (Commodity DRAM) capacity Although demand has weakened, it is difficult for suppliers to quickly adjust output Therefore, they are also facing increasing inventory pressure Graphics DRAM pricing in 3Q22 is revised to decline 3-8% QoQ
TV shipments lead the fall and demand related to networking and industrial applications have also shown signs of weakening The price of DDR3 is currently at a relatively high point and there is plenty of room for pricing to fall in the future Weak stocking momentum originating from DDR4-related applications does not rule out the possibility of a wider decline In addition to the expansion of output due to the introduction of advanced processes, Chinese and Taiwanese manufacturers will still add new production capacity in 2H22 The decline in consumer DRAM pricing is forecast to deepen to 8~13% this quarter
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/
The Webinar, ”COMPUFORUM 2022 Webinar: Diverse Market Opportunities Generated by Applications of Cyber-Physical Systems” will start from June 15, 2022 The TrendForce research team including Mark Liu, Caron Ju, Bryan Ao, and Alex Chen will present speeches regarding memory, servers, and datacenters, respectively
【Info】
When：Wednesday, June, 15
Where：COMPUFORUM 2022 Webinar (Free to access)
2022/06/20
According to TrendForce research, despite the significance of peak season and rising DDR5 penetration, the 3Q22 DRAM market still succumbed to the negative impact of weak consumer electronics demand resulting from the Russian-Ukrainian war and high inflation, which in turn led to an increase in overall DRAM inventory This is the primary reason for a 3-8% drop in DRAM prices in 3Q22 and a more than 8% pricing dip in certain DRAM products for PCs and smart phones cannot be ruled out
In terms of PC DRAM, sustained weakening of demand has led to PC OEMs adjusting their annual shipment targets and also caused DRAM inventories to soar rapidly In 3Q22, PC OEMs remain focused on adjusting and destocking DRAM inventories, making a rebound in purchasing momentum unlikely At the same time, since the overall DRAM industry remains oversupplied, even if PC demand is sluggish, suppliers still experienced difficulties in reducing their PC DRAM supply, resulting in a slight quarterly increase in the number of supplied bits Therefore, PC DRAM pricing is forecast to drop by 3~8%
In terms of server DRAM, current client inventory levels of 7-8 weeks is slightly high, and though direct sales is currently the server field’s primary distribution channel, clients’ bit demand is still not enough to fully consume the bit output derived from increased wafer input and process advancement In addition, demand for consumer PC DRAM and mobile DRAM is uncertain in 2H22, forcing suppliers to transfer production capacity to server DRAM As a result, suppliers have to adopt certain sales strategies such as two quarter price binding or increasing on hand inventory to suppress price declines Server DRAM is forecast to drop by another 0~5% in 3Q22
In terms of Mobile DRAM, as sales in the consumer market fail to meet expectations, suppliers are forced to incrementally reduce the proportion of mobile DRAM production quarter by quarter and switch to server DRAM, thereby stabilizing market inventory and prices However, the supply of mobile DRAM bits did not drop significantly due to the increased manufacturing In addition, average memory installed per machine failed to increase significantly, resulting in continued oversupply and expanding price decline to 3~8% compared to 2Q22 TrendForce also indicates, bit shipments were limited due to sluggish demand for smartphones in 2Q22 and the urgency of smartphone brands to deplete inventory Under pressure from both revenue and inventory, pricing will see greater flexibility and suppliers will strive to negotiate pricing on some orders before the end of June to alleviate their inventory concerns
In terms of Graphics DRAM, as buyers face increasing inventory and uncertain subsequent demand from distributors, the market's stocking momentum has become weak Although Micron only retained a sporadic supply of GDDR6 8Gb in 3Q22, the current graphics DRAM supply is secure due to increased production volume from Korean manufacturers and the weakening of demand, which caused prices to drop marginally by 0~5% in 3Q22 TrendForce believes that weak demand is a key inhibitor of rising graphics DRAM pricing this quarter However, if suppliers see that a price drop in 3Q22 will not stimulate demand, they will try to keep prices as flat as possible
In terms of consumer DRAM, the purchasing of consumer electronics has been adversely affected by factors such as the Russian-Ukrainian war, China's pandemic lockdowns, and rising inflation Consumer DRAM-related applications such as notebook and TV shipments are facing downward revision In addition, since DDR3 is at a relatively high point, pressured by inventory and cost, buyers’ purchasing power has obviously weakened Demand for DDR3 and DDR4 is forecast to decline simultaneously and market stocking momentum will continue to weaken Korean manufacturers’ plans to withdraw from DDR3 supply remains unchanged but, in 2H22, Chinese and Taiwanese companies will continue to create new production capacity With weaker demand and increased supply, sellers lose their bargaining advantage, making consumer DRAM prices difficult to support in 3Q22 DDR3 and DDR4 prices are forecast to drop by 3-8% QoQ
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/
The Webinar, ”COMPUFORUM 2022 Webinar: Diverse Market Opportunities Generated by Applications of Cyber-Physical Systems” will start from June 15, 2022 The TrendForce research team including Mark Liu, Caron Ju, Bryan Ao, and Alex Chen will present speeches regarding memory, servers, and datacenters, respectively
【Info】
When：Wednesday, June, 15
Where：COMPUFORUM 2022 Webinar (Free to access)
