After struggling through a year of downturn, the revival of the preservation chip market has become the most certain trend in the industry this year. Before the real turning point is reached, the upstream and downstream of the industrial chain are stopping their anxious price hikes.
This round of push saws first emerged between chip factories and module factories. The chip factory is located in the upstream of the industry chain, with sales force focused on preserving chips. Its main products are DRAM (memory) and NAND Flash (flash memory); Module manufacturers usually negotiate with chip manufacturers to store chips for delivery, and then stop packaging and trying. The most common storage modules for delivery are memory modules, static hard drives, and so on; Finally, these modules will be sold to downstream mobile phone, computer, and server customers through distributors and channel vendors.
A Shenzhen agent from Kingston, a storage equipment manufacturer, informed the interface that they have received multiple requests from upstream storage chip factories to increase contract prices this year, with price increases even reaching 30%. Due to the increase in contract prices for purchasing chips, module manufacturers have to face pressure to follow up on price increases as their costs have increased.
But according to his performance, the mall in his location is very cautious about price increases. Because their demand for downstream consumer malls is still sluggish, they are still exploring the response of downstream consumers to price increases. Joining April, the spot price of static hard drives in the hands of agents remained unchanged, and even the price of departmental products was higher than the retail price, eliminating the inversion and resulting in a price increase.
Another agent of Western Data also expressed a similar opinion to Erzi.
After experiencing price cuts and cost reductions in previous years, “no longer selling chips at a loss” has become a resonance among chip factories. Previously, various companies aggressively increased production, increased inventory, and increased contract prices to counter the rise in shopping malls.
SK Hynix, one of the “three giants in chip preservation,” released its financial report this week without any consequences. After the decline in shopping malls in the second half of previous years, the price increases of DRAM and NAND Flash both exceeded expectations in the first quarter of this year. SK Hynix’s business cost was 2.89 trillion Korean won, compared to a huge profit of 3.40 trillion Korean won in the same period last year, which is a significant increase of 734% compared to the fourth quarter of 2023. The company firmly believes that the Save Chip Mall is clearly entering the stage of comprehensive recovery.
Samsung, SK Hynix, and Micron, the three chip storage giants, have accumulated more than 90% of the global market share. These chip factories are currently not in a hurry to run out of stock and plan to continuously increase prices in 2024, estimated to continue for about six months until the market returns to the node of supply and demand balance. Prior to this, the comprehensive price increase of preserved products was still stuck between the push saw of chip factories and module factories.
However, both of the aforementioned personnel in the preservation module channel have expressed that although the public prices of downstream consumer products have not changed significantly and the trend of price increases is not stable, the revival of the preservation mall has been the most certain trend this year.
Perhaps this can be seen from the latest financial reports released by listed companies of domestic preservation module factories. Due to frequent price fluctuations during storage, the deeds of the module factory can sensitively reflect the changes in the needs of the terminal mall, thereby providing guidance for the health status of the entire industry chain.
Recently, listed companies in the A-share preservation sector, such as Lanqi Technology and Jiangbolong, have successively disclosed their reports or forecasts for the first quarter of 2024. Many companies have seen a significant increase in their first quarter achievements, with Lanqi Technology’s costs rising five times in the first quarter, while Jiangbolong, the leader of cost preservation modules, has risen more than twice. Another flash memory manufacturer, Demingli, has also predicted that their costs will significantly turn profits into profits, setting a record high. On April 26th, Demingli rose the daily limit, Lanqi Technology rose more than 5%, and Jiangbolong followed suit with a 2% increase. The preservation sector company welcomed the general rise.