[Insights] NAND Spot Prices Hold Steady After Hitting $2 Mark, Upward Trend is Subject to Debate

DRAM Spot Market
Major module houses are still holding a fairly high level of inventory, so they are less adhered to the consensus that prices will go up. Currently, their main strategy in the spot market is to have their quotes closely aligned with the quotes in the contract market. Therefore, spot prices are not expected to change significantly before contract prices rise further in November. Even though the overall volume of spot trading remains low, the average prices of items are not fluctuating noticeably. For the mainstream chips (i.e., DDR4 1Gx8 2666MT/s), their average spot rose by 1.46% from US$1.577 last week to US$1.600 this week.

NAND Flash Spot Market

Spot transactions have been ramping up since September under the active inclination of price follow-ups among buyers, though spot prices have slightly mitigated in growth over the past two weeks after arriving at US$2, where some products are seeing a diminishing level of transactions due to the high markup. The continuity of price hikes will require further observations. 512Gb TLC wafer spots have risen by 12.72% this week, arriving at US$2.304.


[News] Nanya Tech Expects Continued Conservative Spending to Balance DRAM Supply-Demand in 2024

On October 11, Nanya Technology held an investor conference where CEO Li Pei-Ying noted that DDR5 prices have risen. Nanya Technology’s primary products, DDR3 and DDR4, have halted their decline, with recent negotiations indicating potential price increases and an expected improvement in ASP (average selling prices) in the fourth quarter. The bit growth rate is also expected to show a slight improvement, leading to an overall amelioration in the loss situation.

Li Pei-Ying stated that in terms of overall market supply, various DRAM manufacturers are increasing their supply of DDR5 and HBM products. This is beneficial for depleting DDR4 inventories, and the DRAM industry’s conservative approach to capital expenditure and wafer production capacity is expected to help restore a healthy supply-demand balance by 2024.

On the demand side, in the server sector, enterprise cloud applications are driving demand for AI computing and DDR5. Nanya Technology anticipates that the server market may gradually improve from the fourth quarter onwards. In the mobile sector, the continued development of AI applications in smartphones globally is expected to boost upgrade intentions, and there is an opportunity for a rebound in smartphone sales in the Chinese market from the fourth quarter.

In the PC sector, the launch of new products is expected to drive demand for DDR5 and LPDDR5, gradually replacing DDR4 and LPDDR4 as the mainstream options. In the consumer electronics sector, including televisions, IP cameras, networking, industrial control, and automotive applications, demand is maintaining steady growth.

(Photo credit: Nanya Technology)


Sporadic Uptick Observed in Lower-Priced DDR4 Memory Modules

DRAM Spot Market
Regarding recent developments in the spot market, there have been sporadic price upticks for low-priced DDR4 products. Meanwhile, prices of DDR5 products have kept falling due to the plentiful chip supply. Unlike the contract market, the spot market has been relatively unaffected by discussions about the possibility of price hikes, and spot trading as a whole is rather tepid. Furthermore, module houses were previously quite aggressive in stocking up, so they are now eager to sell as their inventories remain at a fairly high level. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) dropped by 0.13% from US$1.517 last week to US$1.515 this week.

NAND Flash Spot Market
Spot market demand, different from that of the contract market, remains relatively sluggish recently, where concluded prices are still dropping due to sufficient stocks, despite a slight increment in price inquiries. 512Gb TLC wafer spots have dropped by 0.28% this week, arriving at US$1.413.


DDR3&4 Are Still on Downward Trajectory, Mainstream Wafer Prices Remain in Decline

TrendForce’s latest research indicates that, as production cuts to DRAM and NAND Flash have not kept pace with weakening demand, the ASP of some products is expected to decline further in 2Q23. DRAM prices are projected to fall 13~18%; NAND Flash is expected to fall between 8~13%.

DRAM Spot Market

In the spot market, the trajectory of prices of DDR5 chips is going to be a highlight in the short term. Some sellers are now willing to lower quotes on DDR5 products that have been enjoying price hikes for many consecutive days. However, there have been few to no actual transactions, so TrendForce will continue to closely monitor changes in the prices of these products. As for spot prices of DDR3 and DDR4 products, they are still on a downward trajectory with no sign of easing. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) fell by 1.33% from US$1.575 last week to US$1.554 this week.

NAND Flash Spot Market
Suppliers continue to enlarge in production cuts. Despite the insignificant increase in spot market demand, the continuously shrinking output of small-capacity wafers, as well as the attempt at price revitalization among a number of suppliers, have pulled up demand and transactions of low-priced inventory within the spot market, which led to a small price increment. However, mainstream wafer prices have yet to suspend in decline. 512Gb TLC wafer has dropped by 0.21% this week, arriving at US$1.427.


4Q22 DRAM contract price drop expanded to 18~23%, also spot market has no luck to escape from the recession

According to TrendForce, prices for 4Q22 contracts were mostly finalized in October in contract market. The QoQ decline in the overall DRAM ASP has now reached 18~23%. This discrepancy is due to the fact that Samsung maintains a rather aggressive approach for pricing. Regarding 1Q23, TrendForce has revised the QoQ decline in the overall ASP from 5~10% to 15~20% provided that Samsung continues to be this competitive. TrendForce is also not ruling out the possibility that prices could drop by more than 20% for some types of DRAM products.

As for spot market, October saw spot transactions at their lowest level so far for this year. Moving into November, the ongoing decline in DRAM spot prices will unlikely ease anytime soon as China maintains its strict zero-COVID policy and enforces lockdown for local outbreaks. Furthermore, the major DRAM suppliers have made substantial price concessions in their contract negotiations, thereby creating downward pressure on spot prices as well. TrendForce has observed that the average spot price of the mainstream 1Gb DDR4 chips has been falling rapidly since October 24 with the daily decline exceeding 1%.

Until November 9, the sequential drop in the average spot price of 1Gb DDR4 chips has reached 8.36%. At the same time, spot prices of server DRAM modules have now fallen below the lowest point in the previous cyclical downturn and arrived around US$70. This indicates that there is a considerable room for a further drop in contract prices in 1Q23. Regarding weekly change in the spot price trend of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s), the average spot price slid by 2.30% from US$ 2.222 last week to US$2.171 this week.

(Image credit: Unsplash)

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