There are no surprises regarding the demand situation.
The smartphone market continues to show recovery momentum, with strong sales of high-end models during the launch of new flagship devices.
Apart from Apple, other smartphone AP orders exhibit potential for growth.
However, the PC market has not improved as expected, which could negatively affect price negotiations in the first half of 2025.
Similarly, there are no significant developments in the server market.
AI demand remains steady, but the anticipated recovery in China has yet to materialize.
DRAM
The contract price negotiations for most deals this quarter are nearing completion.
The aggressive inventory strategies of smartphone vendors, combined with serious oversupply conditions for LPDDR4x, are driving prices down.
LPDDR4x prices are expected to drop by more than 10% this quarter, while LPDDR5x prices are projected to decline by a mid-single-digit percentage.
In the PC DRAM market, some deals were finalized earlier than in the smartphone market, leading to relatively smaller price declines compared to smartphone solutions.
Some OEMs have settled prices at flat levels, while others finalized prices with high single-digit percentage declines.
UDIMM prices will adjust after negotiations conclude.
Regarding RDIMM contract prices, RDIMM4 ASPs decreased by a low single-digit percentage, whereas RDIMM5 ASPs are expected to rise by a low single-digit percentage.
Considering the current market conditions, suppliers may implement rebates or pull-in deals toward the end of this quarter to meet shipment targets.
Channel module demand remained consistent with last month, showing signs of demand recovery as previously mentioned. The price increase of lower-grade DDR4 components has helped stabilize DDR4 module pricing.
However, DDR5 module prices continued to decline, making profitability challenging for module manufacturers given the current DDR5 component pricing, even though DRAM makers have further reduced DDR5 component prices.
This month, in the spot market,
16G DDR5 x8 original brand component down 5%.
16G DDR4 x8 original brand component down 4%.
16G DDR4 x8 ETT/UTT grade component down 8%.
8G DDR4 x8 original brand component down 4%.
8G DDR4 x8 ETT/UTT grade component up 3%.
4G DDR4 x16 original brand component down 6%.
4G DDR4 x16 ETT/UTT grade component down 7%.
NAND
OEM client SSD contract prices are expected to decline by mid-single digits or more this quarter.
Some OEM vendors are still pushing for even steeper price reductions.
For UFS targeting smartphone vendors, prices are anticipated to drop by over 10% this quarter.
Regarding eSSDs, despite solid demand from AI servers, overall market demand is pressuring prices downward.
Prices could decline by 10% or more, reflecting weaker-than-expected demand from the server market.
If eSSD demand slows further, it may influence contract price trends in the second half of 2025.
A price rebound next year appears unlikely.
Channel SSD demand has improved somewhat, supported by moderate price decreases.
However, raw NAND market transactions remain limited.
The demand side is pushing for lower prices, but suppliers are struggling and have not yet agreed to accept them.
Meanwhile, NAND suppliers are striving to accelerate market balance by reducing CapEx and even cutting capacity.