Inventory Banking continues

PC shipment in Q4 2023 was slightly worse than expected, but their projection for 2024 has improved.
They believe that the demand from the education sector and the phasing out of Windows 10 will trigger a replacement cycle.

However, the smartphone market did not perform well after the middle of this month.
Mid- to low-end smartphone demand weakened, and related AP foundry orders were adjusted down.

During this pricing upturn, most of the vendors are banking inventory.
The inventory level is high, and they might continue this behavior in 1H24.

DRAM

DRAM shipments are increasing while inventory banking continues

DRAM contract price initial quotation is high in 1Q24, with manufacturers expecting high ASP growth.
However, the price negotiation continues and closure is not expected soon.
In general, the price gap between DDR4 and DDR5 would narrow down, and the ASP difference for LPDDR4x and LPDDR5(x) would be smaller as well.

The availability of DDR5 for PCs continues to be constrained, as the top three vendors’ supply is not fully available.
To guarantee enough stock for the first half of next year, certain leading PC OEMs have secured substantial volumes of DDR5 in advance.

The consumer demand is stable, with the monthly contract price rising this month.The market is expecting another high single digit growth in 1Q24.
Current 4Gb DDR4 price is higher than 4Gb DDR3 because of the supply ability difference.
4Gb DDR4 prices could rise furthermore compared to 4Gb DDR3 prices in the coming 1Q24.

The spot market acted sluggish, but the component trading pricing got higher.
DRAM module price is stable, and the demand weakened in the second half of this month.
The overall channel shipment is worse than last month.

This month, in the spot market,
16G DDR4 x8 original brand component up mid. single digit.
16G DDR4 x8 ETT/UTT grade component up mid. single digit.
8G DDR4 x8 original brand component up mid. single digit.
8G DDR4 x8 ETT/UTT grade component up mid. single digit.
4G DDR3 x16 original brand component relatively flat.
4G DDR3 x16 ETT/UTT grade component relatively flat.

NAND

Despite weak Nand consumption, pricing continued to trend upwards

Raw NAND wafer price has hiked more this month.
The weak demand forced the dealt price to be lower than suppliers’ initial offering.
In addition, the transaction volume was less than expected.
The raw NAND pricing would raise further in the coming months, but not as much as before.

The contract price would increase more than expected in 1Q24, as suppliers have high intention to get rid of negative margins.
Most vendors quote 30% up for client OEMs SSDs, and 20% or more up for UFS.
The price hike too quickly would slow down the content growth for each storage application.
However, the capacity cut could sustain for the whole year 2024, maintaining the tight supply condition.

Channel SSD prices increased earlier of this month, but the prices became negotiable and slightly down in the second half of this month.
With weak demand and valuable inventory, some module makers and traders might sell off some stock at lower prices before Chinese New Year to generate cash.