Japanese investment agencies issued the latest report (on Sep.6th) indicating that, apart from the sustained momentum in the generative AI field, there is still ongoing polarization in demand at present, with expectations of a shift towards an overall recovery trend in the second half of the year.
The supply and demand for next-generation AI-related products are tightening, but demand in other sectors is further declining due to limited overseas IT investments. However, Japanese investment agencies have observed that the demand for IT investments in Japan is stronger than it was three months ago. With the disappearance of concerns about an economic slowdown, recent demand is stronger than expected. In addition, there is still a strong demand for power semiconductors and advanced microcontrollers, and Japanese manufacturers are maintaining relatively strong revenue.
Currently, semiconductor demand is polarized, with strong demand for generative AI, but weaker-than-expected demand for B2C and data center-related products. In addition, inventory adjustments for products such as PCs and smartphones are progressing, with demand hitting the bottom but gradually recovering. DRAM recovery is accelerating, while NAND flash memory still requires time to recover. Power semiconductor performance is strong, and Infineon reveals that demand for automotive microcontrollers, IGBT, SiC, and analog zero components is still tight.
In terms of storage prices, Japanese investment agencies expect that DRAM prices will rise due to the demand for AI servers and declining inventory levels, while NAND flash memory prices have already fallen below the suppliers’ cash costs. Future price declines are expected to be limited, with stability expected from July to September and a rebound starting in October to December.
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