Smartphone shipments remained on the path of recovery, with the annual shipment slightly adjusted upward this year.
However, they accumulated a lot of inventory before the end of Q2 2024, especially Chinese vendors.
They might start inventory adjustment in the second half of this year.
Based on the initial component preparation for the coming year, significant growth next year is unlikely.
In addition, certain Chinese smartphone vendors are trying to cut costs more, resulting in poor quality in mid to low-end smartphones.
They try to sell at lower prices to stimulate demand. This might indicate that consumer spending is decreasing in the Chinese market.
PC shipment projections are more than 5% higher, with around 20% AI PC penetration expected in 2025.
AI PCs are a hot topic, catching everyone’s attention, but the current copilot user experience is not satisfactory.
It’s not easy to add the cost of the AI PCs and ask clients to pay for it at the current stage.
The server market performed steadily, and AI-related Capex is expected to continue so far.
However, The current H100 and H800 inventory is high, with traders selling through many channels.
DRAM
The majority of third-quarter contract price negotiations continued.
RDIMM prices are expected to grow better than PC or smartphone DRAM due to stronger demand.
Additionally, both PC and smartphone vendors are expected to decrease their inventory levels in the second half of 2024.
RDIMM5 ASP could grow by more than 10% this quarter, with suppliers tending to increase by another 10% in Q4 2024.
UDIMM5 for PCs could rise by a high single digit to around 10% this quarter, with expectations of a mid-single digit increase in Q4 2024 because of the DDR5 supply tight could be eased in 4Q24.
DDR4 inventory is high on both the supply and demand sides, so DDR4 is expected to increase less than DDR5 across all segments.
LPDDR5x is expected to increase by a mid to high single digit, while LPDDR4 could remain flat or slightly up this quarter.
In projections for DRAM pricing trends next year, ASP could soften in the second half of 2025.
Certain supplier tends to produce more DRAM to maintain market share.
Moreover, non-AI server demand is sluggish, and smartphone shipments might not grow significantly next year.
The consumer market is still weak, with DDR3 pricing much weaker than DDR4.
DDR3 contract prices might drop if second-tier suppliers reduce their DDR3 inventory in Q4 2024 as DDR3 demand shrinks.
In the channel market, there is no obvious improvement overall.
DDR5 module demand improved significantly compared to last month as both DDR4/5 module selling prices dropped at the beginning of this month.
However, DDR4 module shipments are much lower than last month.
This month, in the spot market,
16G DDR5 x8 original brand component up 2%.
16G DDR4 x8 original brand component down 6%.
16G DDR4 x8 ETT/UTT grade component down 1%.
8G DDR4 x8 original brand component up 2%.
8G DDR4 x8 ETT/UTT grade component flat.
4G DDR3 x16 original brand component flat.
4G DDR3 x16 ETT/UTT grade component down 2%.
NAND
eSSD demand has remained strong this year, and the projection for 2025 is positive with AI growth.
Moreover, the utilization of full NAND AI architecture is expected to increase in the coming year.
This is a positive sign for eSSD demand.
Additionally, the noise about Tesla delaying QLC eSSD pull-ins has temporarily disappeared.
eSSD demand in the second half of 2024 is expected to be solid.
The client SSD price and UFS ASP for smartphone makers will increase less due to inventory adjustment and lower demand projections compared to eSSD.
Price negotiations continued; the cSSD could rise 5-10%, and UFS might increase by 5% or less this quarter.
As mentioned before, the strong demand might not benefit all suppliers.
Some vendors are facing weaker demand in segments such as the PC and smartphone markets.
However, the price increase would be less in Q4 2024.
Projecting the pricing trend in 2025, the ASP could be weak in the first half of 2025 and become strong in the second half of 2025.
Based on the current supply and demand estimation, the market will be balanced and industry inventory will decrease in the second half of 2025.
Certain suppliers tend to increase DRAM supply, which would result in less NAND production growth in 2026.
In addition, most suppliers will have QLC eSSD ready in the second half of 2025, reducing dependence on the consumer or PC segments.
Both consumer market and channel SSD demand are weak.