Steady momentum in AI infrastructure builds is driving robust demand for cloud and server storage, supporting original suppliers in maintaining extremely low inventories and strong pricing leverage. Conversely, squeezed by elevated costs and sluggish demand, consumer electronics brands and module makers have turned conservative, keeping only minimal operational stocks. Consequently, the third-quarter market will exhibit a stark polarization—robust cloud demand contrasted with a muted peak season for consumer products.

Key Highlights

• Robust Cloud Demand: Ongoing expansion in AI infrastructure sustains rigid demand for high-capacity storage, prompting cloud service providers (CSPs) to stock up actively and driving inventory levels further upward.
• Supplier Pricing Power: Memory suppliers strictly discipline output and wafer input strategies, keeping overall inventory at extremely low levels without excess pressure, thereby retaining strong leverage in contract negotiations.
• Sluggish Consumer Demand: End-market demand for PCs and smartphones remains weak. Early pull-in during the first half has consumed subsequent momentum, leading brand OEMs to hold only minimal operational inventory.
• Buyer Resistance to Price Hikes: High memory and component costs severely squeeze profit margins, prompting module houses and brand OEMs to adopt a conservative stance by prioritizing internal stock usage, which significantly narrows contract price increases.
• Subdued Spot Market: Lacking broad underlying purchasing power, the spot market sees quiet trading. Brief price upticks driven by isolated restocking from select module makers offer limited momentum for a broader recovery.

Table of Contents

1. Market Update
2. TrendForce’s View
   • Inventory Levels of NAND Flash Suppliers and Clients in Major Application Segments

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