TrendForce expects that memory suppliers will continue their strategy of scaling back production of both DRAM and NAND Flash in 2024, with the cutback being particularly pronounced in the financially struggling NAND Flash sector. Market demand visibility for consumer electronic is projected to remain uncertain in 1H24.
US-based CSPs have been establishing SMT production lines in Southeast Asia since late 2022 to mitigate geopolitical risks and supply chain disruptions. TrendForce reports that Taiwan-based server ODMs, including Quanta, Foxconn, Wistron (including Wiwynn), and Inventec, have set up production bases in countries like Thailand, Vietnam, and Malaysia. It’s projected that by 2023, the production capacity from these regions will account for 23%, and by 2026, it will approach 50%.
The global server market, grappling with the impact of worldwide inflation, saw significant shifts in 2023. Server OEMs and CSPs revamped their investment strategies, resulting in cutbacks in both annual shipments and ODM production plans. TrendForce observes that as the server market continues to decline, demand for AI surges. These combined factors have had a domino effect, compressing the rollout of new server platforms across the board.
TrendForce reports that the problematic model currently experiencing issues is the SPR MCC 32-Cores. The majority of affected customers are concentrated in the corporate sector, prompting Intel to proactively halt shipments of SPR MCC SKUs. Fortunately, other models such as the 20/24C and 36C and higher remain unaffected.
TrendForce reports that continued production cuts by DRAM suppliers have led to a gradual quarterly decrease in overall DRAM supply. Seasonal demand, on the other hand, is helping to mitigate inventory pressure on suppliers. TrendForce projects that the third quarter will see the ASP for DRAM converging towards a 0~5% decline.
TrendForce predicts a dramatic surge in AI server shipments for 2023, with an estimated 1.2 million units—outfitted with GPUs, FPGAs, and ASICs—destined for markets around the world, marking a robust YoY growth of 38.4%.
TrendForce reveals that alongside the four major CSPs reducing their procurement volumes, OEMs like Dell and HPE have also scaled back their annual shipment volume forecasts at some point between February and April, predicting YoY declines of 15% and 12%, respectively.
First, DRAM suppliers will temporarily procure more PMICs from Monolithic Power Systems (MPS), which supplies PMICs without any issues. Second, supply will inevitably be affected in the short term as current DDR5 server DRAM production still uses older processes, which will lead to a convergence in the price decline of DDR5 server DRAM in 2Q23—from the previously estimated 15~20% to 13~18%.