Morgan Stanley recently released a report suggesting an industry winter is approaching, but was soon contradicted by Micron’s impressive financial report.
However, is the memory market truly on the path to recovery?
It is rumored that Kingston, the largest module manufacturer, has initiated a price reduction strategy, clearing out inventory of mid-to-low-end products.
Apart from HBM and data center SSDs, which have seen a surge in demand due to AI, the consumer electronics market is performing poorly, with the peak season failing to deliver expected results.
Analyst Lu Xingzhi stated that Taiwanese module manufacturers generally hold inventory for as long as 11 months, not limited to just mid-to-low-end products.
Once traditional DRAM prices decline, recognizing inventory losses will become the norm, with Adata, Transcend, and Phison expected to follow suit.
The memory industry no longer has cycles. Currently, apart from memory manufacturers capable of producing HBM, such as SK Hynix, Micron, and Samsung, who are seeing a recovery in profit margins, other companies involved in PC or consumer electronics memory are not only underperforming but are also facing losses or are on the verge of losses.
Memory companies have been offloading large inventories to downstream module manufacturers, leading to an average inventory of 7.8 months among Taiwanese module manufacturers in the second quarter of this year, with some companies holding inventory for as long as 9 to 11 months.
Given the current situation, these non-HBM memory companies have not yet entered an upward cycle, or in other words, there will be no upward cycle within the next 12 months.
Once DRAM or Flash prices reverse, recognizing inventory losses will become the norm.
The market is currently flooded with inventory, and even Kingston, the leading memory module manufacturer, is unable to hold out for more than a month, opting to slash prices to clear out unsellable mid-to-low-end consumer memory products.
It is expected that other manufacturers will follow suit, with particular attention to the actions of Adata, Transcend, and Phison.
Furthermore, the high inventory levels of 8 to 11 months are not limited to mid-to-low-end products. In the coming months, whether the contract prices of high-end memory will soften will be a key focus for the market.
Related:
Disclaimer:
- This channel does not make any representations or warranties regarding the availability, accuracy, timeliness, effectiveness, or completeness of any information posted. It hereby disclaims any liability or consequences arising from the use of the information.
- This channel is non-commercial and non-profit. The re-posted content does not signify endorsement of its views or responsibility for its authenticity. It does not intend to constitute any other guidance. This channel is not liable for any inaccuracies or errors in the re-posted or published information, directly or indirectly.
- Some data, materials, text, images, etc., used in this channel are sourced from the internet, and all reposts are duly credited to their sources. If you discover any work that infringes on your intellectual property rights or personal legal interests, please contact us, and we will promptly modify or remove it.
