PC demand is weaker than expected, and the recovery in the Chinese market has been much slower compared to the global market.
However, China is making efforts to stimulate its economy and improve the labor market, which could help it emerge from recession sooner.
Smartphone shipments have increased due to strong performance in emerging markets, while shipments in China have remained comparable to last year in recent weeks.
In the server market, AI-related server demand remains robust, with some slight improvement in traditional US data center demand.
After TSMC’s acquisition of Innolux’s fab, their CoWoS capacity would expand, leading to a higher-than-expected AI GPU production output.
If AI capital expenditures and demand for AI computing remain strong in the second half of 2025, memory demand could grow.
Additionally, some memory suppliers are planning to reduce their 2025 capex, which could help bring balance to the memory market earlier.
DRAM
Regarding the contract prices,
In 4Q24, suppliers have high expectations for RDIMM, anticipating that RDIMM5 may grow by single digits or more QoQ, with no price erosion for RDIMM4.
Additionally, suppliers aim to maintain stable prices for UDIMM4/5 in 4Q24.
However, module houses have recently offered attractive prices for UDIMM4, putting significant pressure on DRAM makers regarding UDIMM4 pricing.
The consumer and mobile-related memory segments are expected to be weaker than other segments.
Low-power DRAM prices would perform weaker than PC or Server DRAMs, with LPDDR4x price likely falling and LPDDR5x could be relative stable.
Contract prices are expected to be softer than current estimates due to a more conservative market sentiment driven by inventory corrections and weak fundamental demand.
Although, the consumer market performed better than the previous quarter, it remains weaker compared to last year. Some special deals have emerged, which could impact contract pricing and purchasing volumes in the upcoming quarter.
The negative impact of downgraded parts is more pronounced than before, with more customers opting for these parts to reduce costs.
However, some DRAM vendors have lowered production of DDR4/LPDDR4 and consumer DRAM products, which may help the legacy market rebalance sooner.
The channel market is underperforming, with shipments significantly weaker than last month. So far, there has been almost no demand boost from the Double 11 event. Due to the slow movement of DDR4 products, module houses are less willing to purchase them unless reasonable prices are offered.
This month, in the spot market,
16G DDR5 x8 original brand component down 2%.
16G DDR4 x8 original brand component down 6%.
16G DDR4 x8 ETT/UTT grade component down 5%.
8G DDR4 x8 original brand component down 8%.
8G DDR4 x8 ETT/UTT grade component down 7%.
4G DDR4 x16 original brand component down 8%.
4G DDR4 x16 ETT/UTT grade component down 2%.
NAND
As Android smartphone vendors have a strong intention to decrease their inventory levels, and suppliers already softened their prices in 3Q24, the UFS contract price could decline in 4Q24, with a single-digit decline or more.
Suppliers are trying to hold the client SSD contract price from declining in 4Q24 and aim for a single-digit increase in eSSD prices. However, the price projection is worsening, and it could be tough for suppliers to reach their targets.
Raw NAND prices declined this month as expected, but module makers are unwilling to accept deals unless prices are low enough.
The transaction volume is lower than original plan.
Given the current market situation, this benefits the major module makers, as they have the capacity to purchase meaningful volumes from NAND manufacturers.
Some module makers expected that channel SSD prices might rebound this month due to their already low levels.
However, channel SSD prices have continued to decrease, and both raw NAND wafer and channel SSD prices are expected to decline further in the coming quarters.