1. Unveiling the Price Turmoil: A Year of Struggles for Global Storage Manufacturers
In the ever-evolving landscape of technology, the past year has proven to be a challenging one for global storage manufacturers, as reported by Taiwan’s Digitimes. Facing significant losses, these manufacturers grapple with tightened production capacity and stringent shipment controls. Downstream storage module factories find themselves in a predicament, struggling to secure goods amidst the shifting sands of the market.
2. Riding the Price Rollercoaster: From Quarterly Adjustments to Daily Fluctuations
Traditionally, the pricing model for the storage industry followed a stable quarterly pattern over the past 3-4 years. However, recent downturns have disrupted this equilibrium, leading to a staggering 70% drop in market prices. The once predictable pricing structure has given way to a daily price dance, with the supply chain described as aggressively rising, showing no consideration for fair play.
3. Navigating the Uncharted Waters: The Challenge of Unpredictable Price Quotes
The supply chain unveils a landscape where prices become apparent only shortly before shipment. The contract price for 512Gb has soared to $2.2, and the spot market is quoting an even higher $2.7. Despite the overall market price surge, original manufacturers stand firm on pricing, creating a challenge for module factories to secure goods without succumbing to the price hike pressure.
4. Shifting Strategies: Adapting to the Unpredictable Market Conditions
In response to falling prices, module factories have shifted gears, engaging in monthly negotiations with original factories. However, the collective effect of original factory production cuts has led to a sharp rise in NAND prices since August, with changes occurring almost daily. The lack of a fixed pricing pattern in storage market quotes is exacerbated by the strict tightening of original factory shipments.
5. Samsung Takes the Lead: Navigating the Future of Storage Industry Pricing
Original factory quotes, particularly led by Samsung Electronics, continue to surge forward. The expected fourth-quarter contract price for Wafer Flash 512Gb initially anticipated to increase by single digits, now looms at $2.2. Market speculations point towards a 10-15% rise in fourth-quarter contract prices, with spot prices inching closer to the $3 mark.
6. DRAM Dynamics: Shifting Focus and Rumors of Production Cuts
While DRAM price increases remain moderate, major manufacturers are strategically cutting production, concentrating on high-value-added products like HBM and DDR5. Industry rumors suggest Samsung’s 2023 production cut may extend beyond NAND, significantly reducing DDR4 capacity in the second half of the year. This shift aims to transition customer specifications to DDR5, reducing DDR4 inventory by the end of 2023.
7. The DDR Transition: Accelerating Toward DDR5 in the Face of AI Advancements
Chen Li Bai, Chairman of ADATA, asserts that major DRAM manufacturers are accelerating the shift to DDR5, aligning with the expanding AI trend in terminal applications. Upstream original factory capacity allocation and new investments are expected to focus on HBM and DDR5, further shaping the industry landscape.
8. The Industrial Control Application Horizon: DDR5’s Entry and DDR3’s Gradual Exit
In recent years, Transcend has redirected its focus to embedded industrial control applications. DDR5 is poised to enter the industrial control application market in the second half of 2024, surpassing DDR3, which dominated the market until 2023.
9. Market Dynamics: DDR3’s Price Increase Amidst Transition Challenges
Despite a gradual reduction in storage factory capacity supply and decreasing terminal demand for DDR3, prices have seen a slow and steady increase. Samsung’s effort to encourage industrial control customers to upgrade to entry-level DDR4 by temporarily lowering DDR4 prices matches DDR3 prices. However, as mainstream PC applications shift to DDR5, DDR5 Wafer consumption is expected to rise by 20%, driving market prices higher.
10. Anticipating the Future: Supply Shortages and Bullish Cycles
While DDR3 inventory remains substantial, market competition pressure is expected to ease with the capacity shift. Anticipations point towards a rebound in contract prices in the first quarter of 2024, potentially leading to a balance or supply shortage by the second to third quarters. The next 2-3 years are projected to favor the storage industry, marking a new bullish cycle.
In conclusion, the global storage market undergoes a transformative phase, navigating through unpredictable price shifts, production cuts, and technological transitions. Industry players must adapt swiftly to these dynamic conditions, charting a course toward a resilient and thriving future.
[…] Global Storage Shake-Up: Prices, DDR, Future […]