According to TrendForce, next year DRAM demand growth will be only 8.3%, for the first time in history this figure will fall below 10%, while supply will grow by about 14.1%. In other words, the market expects an overproduction crisis at least in 2023 and prices could fall further. The NAND memory market is a little different.
Although the market is still experiencing overproduction of NAND and prices will fall in the first half of next year, the NAND market has some room for “price elasticity” compared to DRAM, according to the agency. Flash memory demand will grow by 28.9% and supply by about 32.1%.
At the same time, inflation will continue to impact consumer markets, so memory manufacturers’ primary goal should be to adjust inventories. For example, in recent years, the shortage of components caused by the pandemic has led to an increase in production orders, but not particularly active sales have meant that laptop stocks are not leaving warehouses too actively, and demand is weakened laptops is expected next year.
It is expected that the share of DDR4 and LPDDR4X in computers will continue to decrease, while LPDDR5 and DDR5 will increase. However, the high price of DDR5 will affect the expansion speed of this type of memory – many will prefer to stick with DDR4. As for NAND in the consumer segment, the average installed capacity of sold consumer SSDs for computers will only grow by 11%, the worst number in the last three years. The main reason is the spike in laptop sales over the past two years due to the pandemic, with a concomitant increase in SSD usage. However, due to rising component costs, notebook prices will continue to rise, following the trend of recent years.
Regarding smartphone manufacturing, TrendForce gives a relatively bearish outlook and expects a slight increase in smartphone purchases to replace old models and new purchases in developing regions. When it comes to mobile DRAM, the Android market is not expected to explode as smartphones currently already have enough RAM for day-to-day operations. Therefore, given the small share of premium products, manufacturers do not strive to increase storage capacity, and in iOS, high system optimization also reduces the need for high RAM capacity. Installed storage density is expected to increase by just 5% by 2023.
Regarding the prospects for mobile NAND, the proliferation of 5G generation smartphones gradually leads to an increase in the memory required to enable high-definition video recording. In particular, the “standard” storage capacity in iPhone and premium Android models continues to grow and 256GB is often the baseline solution. For cheaper options, the amount of memory will continue to grow as other hardware specifications evolve. The average mobile NAND density is expected to grow by 22.1% in 2023, slightly less than this year.