
Market analyst TrendForce has said that production cuts in DRAM and NAND flash have not kept pace with weakening demand and so prices are expected to fall in 2Q23.
This with both production cuts and average selling prices (ASPs) falling amid weakness in major sectors such as consumer and enterprise electronics, this is likely to lead to a further contraction in the global chip market (see Global chip market still headed for 20% decline in 2023, says Penn).
TrendForce said DRAM prices are projected to fall between 13 and 18 percent anf NAND flash is expected to fall between 8 and 13 percent in 2Q23.
PC DRAM, server DRAM, and mobile DRAM collectively account for over 85 percent of DRAM consumption. The first two categories are mainly served by DDR4 interface memories and the latter by mobile DRAM. DDR5 is yet to achieve much penetration but its price is holding up better.
The ASPs of PC DRAM and server DRAM are expected to decrease by 15 to 20 percent. Because a number of smartphone brands have finished correcting memory inventories the buying momentum is higher but TrendForce still expects mobile DRAM ASPs to decline by 13 to 18 percent in 2Q23.
Demand for enterprise SSDs is expected to grow significantly in 2H23 as new platforms are released and inventory levels continue to fall but in 2Q23 the ASP decline of enterprise SSDs – and therefore NAND flash memory – is expected to run at between 10 and 15 percent.
The other place where NAND flash is significantly designed-in is in smartphones. Similarly to the situation in DRAM, smartphone brand have finished correcting their memory inventories and so buying demand is returning. But again as in DRAM buyers have been merging Q3 and Q2 demand to maintain bargaining power and so the ASP decline will continue in 2Q23 by between 10 and 15 percent.
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