The projection for smartphone shipments has increased, as China’s subsidy measures are indeed benefiting smartphone sales.
The benefits from these measures appear to be diminishing, and the demand generated by this strategy is fading.
In general, the stimulus for smartphone demand remains limited since February.
Nevertheless, some pull in demand appeared from major Chinese smartphone vendors.
Additionally, Deepseek has spurred AI inference demand in the Chinese market.
The leading Chinese data centers have significantly increased their first-half server build plans to meet the upcoming AI demand.
Moreover, certain U.S. data centers have also expanded their first-half volumes, although this seems to be driven by pull in demand rather than additional orders.
However, the overall AI demand growth is not as robust as anticipated, and HBM shipments in the first half of 2025 appear to be weaker than expected.
DRAM
DRAM demand in 1H25 has significantly exceeded expectations, which should help easing the ASPs declining pressure in the coming quarter.
As mentioned earlier, the certain DRAM supplier’s product solutions are not yet ready to support their customers.
It is forcing end customers to accept less price erosion and preventing them from significantly reducing inventory to mitigate risks.
For contract pricing, LPDDR5X has seen some pull-in demand, leading to a smaller-than-expected ASP decline in 1H25.
Regarding RDIMM5 pricing, suppliers are negotiating 1H25 prices with DC companies, which upside the volume recently.
However, these DCs are expecting a decline of more than 10% compared to 4Q24 pricing.
UDIMM5 contract pricing for PC makers is also impacted by product readiness issues from certain supplier.
As a result, some PC makers have accepted higher-than-expected prices in 1Q25.
Overall, contract price declines were milder in the first half, and the rate of decline in 2Q25 is expected to be even smaller.
However, once the product readiness issue is resolved and production ramps up to meet current demand levels, contract prices may face greater pressure in 4Q25.
In the channel market, DDR5 component prices have risen due to tight supply, the recent RDIMM demand increasing and product readiness issue are the factors.
Supply from major DDR5 suppliers is expected to remain tight in the coming quarter.
Meanwhile, DDR4 and DDR5 module prices have yet to rebound due to weak end-customer demand.
Leading DRAM suppliers continue to cut legacy process production, which should help stabilize DDR4 prices sooner.
This month, in the spot market,
16G DDR5 x8 original brand component up 6%.
16G DDR4 x8 original brand component down 7%.
16G DDR4 x8 ETT/UTT grade component up 3%.
8G DDR4 x8 original brand component down 5%.
8G DDR4 x8 ETT/UTT grade component down 3%.
4G DDR4 x16 original brand component up 4%.
4G DDR4 x16 ETT/UTT grade component down 4%.
NAND
The price of TLC raw NAND wafers continues to decline this month, with significant trading volume.
Some module makers believe NAND wafer prices are approaching the bottom due to capacity cuts by suppliers.
As previously mentioned, cSSD PCBA makers raised prices last month, and some module makers are attempting to increase channel cSSD ASP this month.
China is the only market accepting ASP hikes, but transaction volumes remain limited.
However, major channel cSSD brand vendors have yet to raise ASP.
While increased server build activity would benefit eSSD demand, but the volume is limited and it’s significantly lower than RDIMM.
The NAND flash pricing trend remains highly dependent on supply cuts.
A prolonged period of low utilization rates will be crucial for stabilizing prices.
Contract prices are expected to continue declining in 1H25 but could rebound in 2H25 if demand exceeds expectations and market sentiment improves.