Even though the third quarter is the traditional peak season for consumer electronics and other end-market applications, DRAM and NAND flash memory spot prices have decreased almost uniformly throughout the quarter, according to industry sources.
Nevertheless, HBM memory is perceived as a factor in the price increase of 2025. Recent market concerns have been fueled by delays in the delivery of Nvidia's next-generation Blackwell GPU solutions.
Nvidia's new-generation Blackwell GPU will demand more bit manufacturing capacity from the three leading DRAM suppliers, whether measured in terms of single die capacity or entire GPU capacity including HBM, according to sources. As a result, it is widely expected that demand for the next Nvidia GPUs will drive a rapid growth rate in 2025.
Nevertheless, the end markets are currently experiencing a decline in demand. Conventional DRAM and NAND spot prices have experienced a nearly uniform decline in recent months. The third quarter's anticipated rebound has been disappointing, according to sources. Some sectors have expressed concern that memory contract prices may start to fall in the first quarter of 2025.
Nvidia GPU demand remains strong
The demand for Hopper remains robust, even though Blackwell is experiencing a delay in shipments, according to market sources. Nvidia remains optimistic that total shipments will rise in the following two quarters.
Sources anticipate that the Hopper GPU (H100/H200) order allocation will be revised upward, and the total quantity that extends to 2025 is expected to increase by over 30%.
According to Nvidia's product roadmap, Blackwell's B200 has eight 8-layer HBM3E chips with a total capacity of 192GB. The capacity has increased by 36% compared to the previous model H200 with 141GB. Besides, a single HBM3E has a capacity of 24Gb, which is 50% higher than a single HBM3E with 16Gb.
The B200A is a lightweight variant with four HBM3E chips and a 12-layer stacking specification, unlike the B200, which is primarily offered to CSPs. The B200A's storage capacity is expected to reach 144GB, with major production set for the second quarter of 2025. It is expected that B200A will eventually replace H200 along the route, according to sources.
In other words, Hopper GPU shipments remain healthy, and whether it is the high-end B200 or the lightweight B200A, demand for HBM will continue to rise in 2025, sources noted.
In addition, HBM4, which will be released in the second half of 2025, is viewed as the next significant technological milestone. The number of stacking layers will reach 16, and the stacking capacity of a single chip will be increased to 64GB.
Capacity crowding-out
While the current path of HBM development is clear, the memory business as a whole is not without uncertainties. Contract market prices have risen due to capacity crowding, as upstream original manufacturers strategically focus on the development of high-value-added DDR5 and HBM, according to industry sources.
However, the spot market prices witnessed a widespread decline at the end of August due to the lackluster purchasing attitude in end markets, according to sources. Only DDR5 was able to maintain a slight increase or remain unaltered. The cost of DDR5 has remained consistently high, as the memory demand for servers has increased in tandem with the increase in total market penetration.
The spot prices of DDR4 increased by 4% in July but declined by 3.5% in August. On the other hand, the pricing trend for DDR5, a critical component in the advancement of server computing capability, has been relatively consistent, according to sources.
Meanwhile, spot prices for NAND flash wafers continued to fall in August. According to ChinaFlashMarket, 512Gb TLC flash wafer prices have fallen from a high of US$4.20 in the second quarter. Prices fell to US$3.80 at the end of August, from US$4 earlier in the month, representing a 5% drop in a single month. 256Gb TLC wafer prices have also declined sharply to US$1.6, a 15.78% decrease since the end of July, while 1Tb QLC wafer prices have fallen by around 3% in the last two weeks.
Poor demand overall
The market's anticipation of a demand recovery in the third quarter has been dashed, as evidenced by the downward trend in spot prices in August. Even though the market has entered its regular peak season, demand is not as strong as expected, according to market sources. OEM customers have adequate inventory, resulting in a fall in spot market prices to boost sales.
The prices of small-density memory products have experienced a significant decrease in the embedded device segment. Chipmakers have developed special order arrangements for mobile phone customers to allow for a more flexible bargaining space, which has led to a reduction in embedded device prices, sources said. The demand for stockpiling will decrease in the short term, as all mobile phone manufacturers have established safety inventories.
There has been speculation that the inventory level of PC OEMs is relatively high. The OEM customers are reluctant to engage in pricing negotiations and lack the necessary motivation to make purchases. Inventory clearance would be required for the latter half of this year. The degree of depletion will be determined by the success of sales during the traditional peak season in the fourth quarter, according to sources.
