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memory prices decline
TAP TIMES -32-
As demand slumps,
memory prices decline
TAIPEI, Taiwan — According to a
TrendForce investigation, memory
pricing began to decline from 4Q21
due to weakening demand for certain
consumer electronics.
Inventory pressure
Coupled with the impact of rising infla-
tion, the Russian-Ukrainian war, and pan-
demic policies, demand in peak season
was weak, resulting in inventory pressure
that has extended from the buyer side to
manufacturers.
In response to the aforementioned situ-
ation, Micron announced recently that it
would cut production of DRAM and NAND
Flash, becoming the first major memory
manufacturer to officially reduce its capac-
ity utilization plan.
Situation severe for NAND Flash
For NAND Flash, the market situation is
more severe than that of DRAM. As the
average contract price of mainstream ca-
pacity wafers has fallen to their cash cost
and is approaching the periphery of selling
at a loss for various manufacturers.
Kioxia (formerly Toshiba Memory) also
announced that it will reduce NAND Flash
capacity utilization by 30% from October
on the heels of Micron’s announcement.
For NAND Flash, Micron originally planned
to gradually increase its proportion of
232-layer products from 4Q22.
However, with the implementation of the
company’s decision to reduce production,
Micron’s mainstream processes are esti-
mated to remain dominated by 176-layer
products in 2023, while wafer starts
As demand slumps,
NOVEMBER 2022
in legacy processes will also fall. Kioxia
and WDC originally planned to migrate to
162-layer products starting in 4Q22 but
WDC slowed CapEx in 2023.
When funding is hard to come by and
demand visibility poor, the proportion of
162-layer products will fall greatly and the
company’s original plan to replace main-
stream 112-layer products in 2023 will not
be achieved.
Bit output limited
More manufactures limiting bit output
cannot be ruled out as only large-scale
production reduction can reverse supply/
demand imbalance in 2023
After analyzing 2023 supply and demand
in the memory market, due to a conser-
vative demand outlook, DRAM and NAND
Flash look to be greatly oversupplied in
each quarter and inventory pressure will
continue to accelerate in 1H23.
In the DRAM sector, after Micron led the
way to announce a DRAM production re-
duction plan that will fall far below histori-
cal levels of supply-side bit growth, the
2023 DRAM Sufficiency Ratio will contract
from the 11.6% previously forecast by
TrendForce to less than 10%, helping to
alleviate rapidly deteriorating inventory
pressure.
Supply and demand imbalance
However, more suppliers must be relied-
on to join in the actual reduction of DRAM
production in the future in order to reverse
the supply and demand imbalance next
year.
It is imperative to reduce bit supply in the
NAND Flash field due to the large number
of competitors and the fact that manufac-
turers have yet to encroach on the
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