Leading semiconductor market research firm TrendForce has released its projections for the memory market in 2024, anticipating a continuation of production cutbacks in both DRAM and NAND Flash sectors. The focus will particularly be on the struggling NAND Flash sector. The forecast also provides insights into various technology sectors affected by these trends.
Uncertain Consumer Electronics Demand and Competition from AI Servers Challenge Memory Suppliers
TrendForce suggests that the visibility of market demand for consumer electronics will remain uncertain in the first half of 2024. This uncertainty is likely to lead to continued cautious production strategies among memory suppliers. Additionally, the competition posed by AI servers is expected to weaken capital expenditure for general-purpose servers.
Anticipated Growth Rates and Challenges
Despite these challenges, TrendForce projects a year-over-year (YoY) bit demand growth rate of 13 percent for DRAM and 16 percent for NAND Flash, largely due to the low baseline set in 2023 and current low pricing for certain memory products. However, achieving inventory reduction and supply-demand balance will depend on the ability of suppliers to restrain their production capacities.
Segment Analysis: PC, Servers, Smartphones, and More
PCs: DRAM capacity growth is projected at around 12.4 percent, driven by new CPUs like Intel’s Meteor Lake, favoring DDR5 as the new mainstream memory. PC client SSD growth, on the other hand, is estimated to be 8–10 percent, constrained by the shift towards cloud-based solutions and cost management.
Servers: Server DRAM capacity growth is estimated at 17.3 percent, propelled by generational transitions, CPU-coordinated RAM usage, and AI server demands. Enterprise SSD capacity could grow by 14.7 percent, with CSPs potentially driving the procurement of 8 TB products.
Smartphones: Economic downturn is expected to limit annual smartphone production growth to 2.2 percent. Declining memory prices might result in increased hardware competition and a 14.3 percent rise in average DRAM memory capacity. However, cautious cost management could lead to a growth of 7.9 percent in average device memory capacity.
UFS & eMMC: Factors like image storage demand and 5G penetration could drive up average smartphone storage capacity, despite production cutbacks. Suppliers might face challenges in promoting capacity upgrades through lower-cost options, leading to an estimated 13 percent annual growth rate for smartphone storage capacity.
TrendForce emphasizes that the memory market’s trajectory in 2024 depends on suppliers’ ability to strike a balance between production restraint and meeting demand. It also underscores the interplay between emerging technologies, market dynamics, and economic conditions shaping the semiconductor landscape.