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Industry insight|DRAM and NAND Flash contract prices revised up quarterly: The market adjusts to HBM3e and AI trends
Edit:Baoxingwei Technology | Time:2024-05-09 10:46 | Number of views:126
According to the latest data from TrendForce, it is forecasted that the quarterly increase in DRAM contract prices for the second quarter will be adjusted to 13-18%, while the NAND Flash contract prices will also be adjusted synchronously to around 15-20%. The scope of this price increase is extensive, with only a slight increase in eMMC/UFS prices, around 10%.
Previously, TrendForce's estimation indicated that the quarterly increase in DRAM contract prices for the second quarter was approximately 3-8%, while for NAND Flash it was 13-18%. However, prior to the 403 earthquake, the market had shown a continuous weakening trend, with spot prices falling and trading volume decreasing. This was mainly attributed to sluggish end-demand, especially the lack of recovery in demand for laptops and smartphones, leading to increased buyer inventory, especially among PC OEMs. Additionally, DRAM and NAND Flash have experienced consecutive price hikes over 2-3 quarters, reducing buyers' willingness to accept substantial price increases again.
Following the 403 earthquake, some PC OEM suppliers, based on specific considerations, sporadically accepted high increases in DRAM and NAND Flash contract prices, but the transaction situation was limited. By late April, relevant industry players had completed a new round of contract price negotiations, with the increase exceeding expectations, prompting TrendForce to synchronously adjust the quarterly increase in DRAM and NAND Flash contract prices for the second quarter. This adjustment not only reflects buyers' willingness to support inventory value but also includes considerations from both supply and demand sides regarding the outlook for the AI market.
TrendForce points out that OEMs are concerned about the potential capacity displacement effect of HBM, especially Samsung's HBM3e products produced using the 1alpha process node, which are expected to occupy approximately sixty percent of the 1alpha process capacity by the end of 2024, further squeezing DDR5 supply. In addition, the third-quarter mass production of HBM3e may lead to supply shortages, prompting buyers to start stocking up early to counter potential HBM supply shortages.
Meanwhile, with energy efficiency becoming an important consideration for AI inference servers, North American cloud service providers are expanding their adoption of QLC Enterprise SSDs as storage solutions, driving demand growth for QLC Enterprise SSDs and accelerating inventory digestion for some suppliers. However, constrained by the uncertain recovery of consumer product demand, OEMs' capital expenditure on non-HBM wafer capacity tends to be conservative, especially for NAND Flash, which is still at the breakeven point in terms of price.
The above data shows that the market has made corresponding adjustments to the quarterly increase in DRAM and NAND Flash contract prices in response to the adjustments in HBM3e and AI trends, to cope with changes in supply and demand and future market dynamics.