Traditional storage has been squeezed out, and the DRAM duo is very popular. But looking forward to next year, whether the market situation will continue, Winbond Chairman Jiao Youjun mentioned that whether there will be a super cycle depends on how long the AI boom can last. At the same time, after the AI boom has passed, we need to think about whether new products will be released and we need to do something different to drive the prosperity of Taiwan, China.As for issues such as how long the stock will be out of stock, whether there is overbooking (overbooking), and the AI bubble, big names in the storage factory also came forward to give their own opinions.
Winbond Electronics' Jiao Youjun said that AI is too hot, causing storage capacity to be continuously squeezed out. This is the case in all industries. Non-AI situations generally cause people to be squeezed out, while the prices brought by AI are much higher, and AI momentum is strong. Therefore, many manufacturers in Taiwan, China are relatively lucky, and each factory is also adjusting strategies and resources. Taiwan, China, is at the forefront of technology and seizes market opportunities.Yes, it will bring considerable value to the overall economic development of Taiwan, China. However, it is also necessary to note that after the AI craze has passed, we need to think about whether new products will be released and we need to do something different to boost the prosperity. We also hope that the entire Taiwanese business community can continue to seize the leading position, and Taiwan's economy is expected to continue to move forward steadily.
Winbond's AI layout is Cube, which has been developed for three years and is ahead of its peers. The current development progress is at a good pace. Orders are expected to be received in the second half of next year, and contributions in 2027 are even more expected.
As for how long the short-term storage growth will continue?The chairman of ADATA, a storage module manufacturer, believes that the supply and demand gap for DDR4 is expected to continue for two years. Due to the suspension of production by three major factories, the supply and demand gap has severely expanded, causing DDR4 prices to rise from the end of the second quarter of this year, and the sudden need to build a new factory after the suspension of production will take too long. The fastest new production capacity will take two years.It will not be launched until half a year later. The response to new equipment is not very timely, so the assessment of the production suspension progress is based on the original plan. The smaller the short-term volume, the lower the price will continue to push up. The quotations of new products from the two major Korean manufacturers are expected to continue to rise sharply. In the fourth quarter, the contract price will increase by at least 20-30%, and the spot price is expected to be even higher.
Regarding the shortage, Winbond General Manager Chen Peiming also believes that the market situation is unclear, but in terms of application, DDR4 will still be transferred to DDR5, especially in the PC field. The main memory controller (Memory Controller) of DDR5 has a more complex structure and higher cost, which continues to affect market supply and demand. Therefore, short-term assessment of the shortage is still unsolved.
Innodisk chairman Kan Chuan Sheng also said that DDR4 prices are expected to continue to rise. For the first time, there is no end in sight for the price increase. Previously, it was felt that it has reached a peak every month and every quarter, but the price increase is expected to continue. Currently, especially in the fourth quarter of this year and next year, supply volume is the key. Innodisk’s control situation is relatively stable, but the company is still working hard, and shortages have become a sweet burden. The company has the opportunity to obtain a relatively large supply of supplies.
Regarding the DDR4 supply issue of IPC leader Advantech, Advantech has launched response measures in the second quarter of this year. Based on the current inventory level and the good cooperation of module suppliers, it is not expected to affect the established order shipment schedule for the fourth quarter.At the same time, the company is improving its strategic material preparation internally based on order status and accelerating the certification of alternative materials. There is still room for DDR4 material preparation.As for the strong rise in storage prices, the cost of materials and parts has slightly increased, which affects gross profit. The impact on costs is currently estimated to be limited and controllable.
The market is also worried about whether there will be DRAM overbooking and AI bubbles. Winbond Chen Peiming explained that supply and demand are unbalanced. Customers are actively looking for sources of supply and telling each supplier about their actual needs. It is possible that the actual demand is not that much. However, the supply is still in short supply, resulting in a gap. Insufficient supply causes prices to skyrocket.As for whether there is an AI bubble or not, we won’t see it for at least five years. Major international brands and national-level manufacturers are keeping up with the AI craze. No factory is willing to fall behind others. Demand continues to increase. The stronger the structural change, the more computing power needs to be strong enough. Demand will emerge, and the better the process will be improved.
Regarding rumors about the occurrence of a storage super cycle in the market, Winbond's Jiao Youjun shook his head and explained that the business cycle comes from the speed of factory construction, which takes about two years. Suppliers notice that the supply is insufficient and start to expand and build factories, and then move in equipment. It takes about two or three years to complete. This determines how long this upward cycle will last. Therefore, the cycle usually moves every two years, especially in the case of AI business opportunities, where many companies are grabbing it, and expansion is imperative. Can the cycle of three to four years be broken?One day the supply will meet the demand, including DDR4 and even DDR5, interrupting the formation of the super cycle. How many factories can be built in ten years? DDR4 is not a leading indicator, but a lagging indicator. DDR4 is a crowding out effect caused by good AI. How long AI will remain popular is the observation point. Only when AI chips continue to increase the added value of the supply chain can we enter the super cycle.
