Storage prices are rising, both virtual and real

Latest update time：2023-12-26

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Recently, reporters have observed that there seems to be a somewhat strange phenomenon in the storage market: on the one hand, memory original manufacturers frequently issue price increase letters, with the highest increase even reaching 55%; on the other hand, the spot market price is tepid, with prices increasing from December to the present. Storage prices have not changed significantly, and even some products have a downward trend.

For a long time, large-scale storage products have been considered a barometer for observing market changes in the semiconductor industry. The recovery in storage prices since the end of September once boosted confidence in the semiconductor market, but the recent price performance of the storage spot market has poured cold water on everyone's confidence.

Will the storage market pick up? When will the semiconductor downcycle end?

Original manufacturers sell goods at the end of the year to lower spot prices

The surge in storage contract prices coincides with the cold spot market, which is related to the pricing mechanism of the storage market.

Industry insiders said that the memory chip contract market and the spot market are two parallel lines. In the oligopoly of the memory chip industry, chip manufacturers such as Samsung and Micron have great pricing power over memory products. In the third quarter of this year, many memory companies lowered their capacity utilization rates, causing memory prices to rise. This behavior was also transmitted to the storage spot market. Since there are many non-contracted channel vendors in the storage spot market, many products are purchased by channel vendors at lower prices, and the original manufacturers have no pricing power over such channel vendor products, which provides a low price for the storage spot market. Price supply.

Memory manufacturers have lowered their production capacity utilization rates and increased storage prices (Source: Flash Memory Market)

Recently, the overall spot price of DRAM chips has declined slightly. Reporters learned from TrendForce that this was due to factors such as storage manufacturers releasing some existing inventory to the spot market at the end of the year. This has also led to the "inversion" phenomenon in the memory market where the original factory shipping price is higher than the spot market price.

There are two opinions on whether prices will rise in the future.

In the third quarter of this year, memory manufacturers' reduction in production capacity utilization increased the market price of memory chips to a certain extent. Some memory chips increased by about 10% to 15%. However, the price still has a lot of room compared with the level before the big price reduction of memory.

Regarding the future trend of memory chip prices, the reporter learned of two predictions.

One point of view is that the price adjustment behavior is mainly caused by the active operations of memory chip manufacturers. The rebound of market demand is limited, so the degree of price change is limited. A domestic agent told reporters that currently, judging from customer orders, there is no sign of significant market recovery.

The second view is that there is room for price increases for some memory products, but different practitioners have different judgments on the types of products with higher prices. Semiconductor industry analyst Li Guoqiang said in an interview with a reporter from China Electronics News that the two major industries of PC and mobile phones have not seen obvious signs of sharp growth. It is unlikely that the demand for these two types of products is far greater than the supply. If this The price increase of similar products is mostly the result of the propaganda of the original memory manufacturers. Li Guoqiang believes that driven by the AI industry, the supply of HBM products used in data centers is relatively tight, and the price increase of this type of memory is more reasonable.

Data source: TrendForce

In addition, some analysts are optimistic about the price increase of mobile phone memory. TrendForce predicts that the average quarterly price increase of mobile DRAM and NAND Flash will expand to 18~23% in the first quarter of 2024, and it does not rule out the possibility of further increases due to the oligopoly competition among suppliers and additional orders from customers. Semiconductor industry analyst Zhang Xianyang said in an interview with a reporter from China Electronics News that there is currently an active replenishment of mobile phone terminals, and he believes that storage products for mobile phones are expected to achieve price increases.

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