In March and in May and in August we stated the cause of the memory crash and what will happen next. Everything is progressing as we predicted (check the presentations!)
-The Market bottomed out in what was the largest downturn in 20 years.
-Bit shipments are now increasing
-Prices will start to increase in Q4
This is true for NAND and DRAM. NAND is worse off than DRAM in terms of oversupply and margins and the overall health of the market is still worse due to too many vendors being to aggressive on pricing and layer counts.
Micron announced results that still show major losses but those were exacerbated by 40% increase in NAND bit sales at discounted pricing. The underload will continue to weigh on Micron as well (see transcript of analyst meeting for more info and how they match our predictions.
What happens next?
1) Bit sales increase steadily
2) Prices increase 5% or so in Q4
3) Customers still have inventory, but knowing that the price will increase, plus the fear of missing out will lead to additional purchases. Plus we need to manage DDR4, 5, LP DDR, HBM, CXL.... getting the right product at the right time is tough (we will have shortages and surpluses at same time)
4) This will lead to perceived shortage and pricing will jump to profitability very quickly (Q1/2 2024). Perhaps we get a convenient power outage at a fab to help !
The questions that remain (we have predictions and ways for you to track this)
1) How much will the price go up? Will the upside pay for the downside?
2) Will the suppliers forget the last 18 months and oversupply yet again based on hype?
3) Will suppliers and customers make supply chain changes that allow them both to be successful
For details on the cause of the crash, the recovery, the changes needed, please visit out website or call/text us
Mark Webb
