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Demand for notebook computers is expected to remain strong throughout 2Q21 due to the persisting stay-at-home economy that arose in the wake of the pandemic, according to TrendForce’s latest investigations. In response to the high demand for notebooks, PC OEMs are actively raising a consistent inventory of components, including client SSDs. Nonetheless, client SSDs are now in increasingly tight supply because the preexisting shortage of NAND Flash controllers is now exacerbated by the power outage at Samsung’s Austin-based semiconductor plant. SSD manufacturers are therefore preparing to raise the prices of SSDs. Accordingly, TrendForce has also revised up its forecast of client SSD prices for 2Q21 from “mostly flat” to a 3-8% increase QoQ instead.
As the three dominant DRAM suppliers (Samsung, SK Hynix, and Micron) are currently experiencing a shortage in their production capacities, the corresponding shortage situation in the DRAM market has yet to be resolved, according to TrendForce’s latest investigations. Taking advantage of the fact that the whole DRAM market has entered a period of cyclical upturn in 1Q21, DRAM suppliers have significantly raised quotes for specialty DRAM products. This extraordinary development has led to price hikes that are almost double digits for some specialty DRAM chips. Furthermore, the magnitude of the price hike especially widens for products belonging to the lower part of the density range and the more niche applications. Looking at MoM changes in contract prices of specialty DRAM products for February, DDR2 and DDR3 chips saw the largest price hikes. Prices of DDR4 chips also went up due to the influence of the rising quotes for DDR3 chips. The average contract price of DDR3 4Gb chips, which are still mainstream for specialty applications, jumped 6.8% MoM.
TrendForce believes that as some support from US-based equipment suppliers is forthcoming, SMIC should be able to continue its efforts in the optimization of the mature process modules and overcoming production bottlenecks to avoid a scission in raw materials and spare parts, and predicts the company to sit at a global market share of 4.2% in 2021.
Global DRAM revenue reached US$17.65 billion, a 1.1% increase YoY, in 4Q20, according to TrendForce’s latest investigations. For the most part, this growth took place because Chinese smartphone brands, including Oppo, Vivo, and Xiaomi, expanded their procurement activities for components in order to seize the market shares made available after Huawei was added to the Entity List by the U.S. Department of Commerce. These procurement activities in turn provided upward momentum for DRAM suppliers’ bit shipment. However, clients in the server segment were still in the middle of inventory adjustments during this period, thereby placing downward pressure on DRAM prices. As a result, revenues of most DRAM suppliers, except for Micron, remained somewhat unchanged in 4Q20 compared to 3Q20. Micron underwent a noticeable QoQ decline in 4Q20 (which Micron counts as its fiscal 1Q21), since Micron had fewer work weeks during this period compared to the previous quarter.
The quarterly total revenue of the NAND Flash industry came to US$14.1 billion in 4Q20, showing a QoQ drop of 2.9%, according to TrendForce’s latest investigations. The total bit shipments of the NAND Flash industry in 4Q20 registered a QoQ increase of nearly 9%. This gain for the most part offset the negative impacts brought about by the QoQ decline of nearly 9% in the overall ASP of NAND Flash products, as well as by the unfavorable exchange rates that impaired some suppliers’ performances. At the same time, clients in the server and data center segments continued their inventory reduction efforts that had begun in 3Q20. Since their procurement drive remained fairly weak, contract prices of NAND Flash products continued their decline as well. However, NAND Flash suppliers were receiving substantial orders from OPPO, Vivo, and Xiaomi. On the whole, the strong demand in the smartphone segment mostly compensated for the weak demand in the server and data center segments. In the notebook computer segment, Chromebook devices were the primary sales driver, but the storage components of most Chromebooks are low-density solutions, meaning related NAND Flash demand is somewhat limited.
