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Japan-South Korea trade war continues to affect memory price volatility

In the past, due to the power outage of Toshiba and the beginning of July, the Japanese government exported three key electronic materials to South Korea, which drove the price rebound of NAND Flash and DRAM. The trade war between Japan and South Korea led the spot prices of the two major memories to fall to the end of June at the end of June. The cumulative increase since July has been about 20%. It is expected that the price of this wave of memory will change from a small rebound to a medium-term rebound. The opportunity gradually rebounded to November, and the cumulative bomb rate is expected to reach 3-4%.


The outbreak of trade war between Japan and South Korea has caused the industry's rumored memory prices to reverse. According to JI Consulting, the DRAM price has experienced a rapid decline for three consecutive quarters, and the inventory level of downstream module factories is generally low, so there is indeed observation. Some of the module factories use the raw material event to raise the price or say that production will stop.


However, the current spot market accounts for less than 10% of the overall DRAM market. The supply and demand situation of medium and long-term industries still needs to focus on the contract market with a ratio of over 90%.


From the demand side, regardless of the retail PC, smart phone, or enterprise server and data center, the overall terminal demand is still very weak.


However, in view of the supply side, the current DRAM supplier's inventory level is still generally higher than 3 months, which also led to the PC, server memory and mobile memory contract price continued to fall at the beginning of the third quarter, temporarily not seen reversed upward sign. Jibang Consulting believes that the DRAM market conditions are less likely to be subject to structural supply and demand reversal due to this raw material event.


The NAND Flash market was affected by the tightening of Japanese material export censorship and the impact of Toshiba’s power outage. Due to the low quotation in the Wafer market, it is expected that the quotations of various suppliers will emerge from July. However, since suppliers generally have a stock level of 2-3 months, most module factories will not accept the price increase for the first time, and the subsequent market price and supply side inventory will determine whether the transaction price will rise.


As for the OEM's various SSD, eMMC/UFS product quotations, although some suppliers have suspended shipments, but from the supply and demand situation analysis, and consider the OEM's inventory water level, Jibang Consulting believes that although NAND Flash prices will appear in the short term Rising, but there is still pressure to fall in price.


Although the dispute between Japan and South Korea has led to an increase in the price of the spot market savings chip, the industry believes that this cannot change the state of DRAM production and demand imbalance.


A source from a Korean chip maker said that customers are "keeping the situation closely", but "the demand is still taking place because demand is still weak."