In Q2, the spot price for consumer memory experienced a significant decline of 30%, according to recent reports from TrendForce. This drop has created a noticeable dislocation between the spot price and contract prices, leading to challenges for stakeholders in the market. Unlike the spot market, which reflects immediate supply and demand dynamics, contract prices tend to lag behind, making it difficult for module makers to navigate pricing strategies effectively.
Additionally, module makers have reported a 40% year-over-year decline in shipments through retail channels for consumer NAND. This stark reduction indicates that consumer demand remains weak and is unlikely to see a substantial recovery in the second half of the year. Factors such as changing consumer preferences, economic conditions, and increasing competition are contributing to this demand slump.
The combination of weakened consumer demand and rising NAND wafer prices is creating an increasingly unattractive environment for module suppliers. With costs increasing yet demand falling, suppliers are finding it challenging to maintain profitability.
Looking ahead to next year, the outlook for DRAM prices is set to improve gradually, with expectations of a quarterly rise fueled primarily by the growing penetration of HBM3e (High Bandwidth Memory 3 Enhanced) technology. This new generation of memory is anticipated to increase average selling prices (ASPs), making it a critical factor in the overall recovery of the memory market. As HBM3e technology gains traction across various applications, particularly in AI and high-performance computing, it could provide a much-needed boost to the market dynamics.
In summary, while the consumer NAND sector faces significant challenges in the short term, developments in DRAM pricing and technology like HBM3e indicate potential growth avenues for suppliers moving forward.
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