The Zhitong Finance App learned that Everbright Securities released a research report saying that in 2024, in response to the price trend for the first quarter, TrendForce Jibang Consulting maintained its previous forecast. DRAM contract prices increased by about 13-18% during the quarter; NandFlash was 18-23%. DRAM and NAND Flash contract price increases in the 2024Q2 quarter all converged to 3-8%. Q3 enters the traditional peak season, and the demand side expects strong replenishment momentum from North American cloud service providers (CSPs). Under the premise that both DRAM and NAND Flash production capacity utilization rates are expected to return to full load, there is an opportunity for both contract price increases to 8-13% simultaneously. On the premise that suppliers can maintain an effective production control strategy in the fourth quarter, the rise should continue. It is estimated that DRAM contract prices will increase by about 8-13% during the quarter.

The views of Everbright Securities are as follows:

DRAM and NandFlash are expected to increase prices for 4 consecutive quarters in 2024

According to TrendForce Jibang Consulting research, contract prices for DRAM products began falling in the fourth quarter of 2021, falling for eight consecutive quarters, and rising until the fourth quarter of 2023. On the NandFlash side, the contract price began falling in the third quarter of 2022, falling for four consecutive quarters, and rising until the third quarter of 2023. Under the premise that the 2024 market demand outlook remains conservative, both price trends depend on the supplier's capacity utilization rate.

2024Q1: In response to the first quarter price trend in 2024, TrendForce Jibang Consulting maintained the previous forecast. DRAM contract prices increased by about 13-18% during the quarter; NandFlash increased by 18-23% during the quarter.

2024Q2: Although the market's view on overall demand in 2024Q2 is still conservative, DRAM and NandFlash suppliers have increased capacity utilization in late 2023q4 and 2024Q1, respectively. In addition, NandFlash buyers will complete inventory recovery as early as 2024q1. As a result, DRAM and NandFlash contract price increases all converged to 3-8% during the 2024q2 quarter.

2024Q3: Entering the traditional peak season, the demand side expects strong replenishment momentum from North American cloud service providers (CSPs). Under the premise that both DRAM and NandFlash production capacity utilization rates are expected to return to full load, there is an opportunity for both contract price increases to 8-13% simultaneously. Among them, in terms of DRAM, DRAM increased due to the increase in DDR5 and HBM penetration rates, benefiting from an increase in average unit prices, which led to an increase in DRAM growth.

2024Q4: On the premise that suppliers can maintain effective production control strategies in the fourth quarter, the rise should continue. It is estimated that DRAM contract prices will rise by about 8-13% per quarter: The reason for the increase in DDR5 contract prices is due to the increase in market penetration of DDR5 and HBM products. If only a single product, such as DDR5, is observed, there may still be a seasonal decline. This means that the increase in DRAM contract prices in 2024 is not an overall rise in all particle categories, but a gradual shift in product categories. The quarterly increase in NandFlash contract prices is estimated at 0-5%.

Investment advice: The storage industry has reached an inflection point, and prices are expected to rise for 4 consecutive quarters in 2024. Recommended attention:

1) Modules: Baiwei Storage (688525.SH), Jiang Bolong (301308.SZ), Demingli (001309.SZ), etc.;

2. Testing machine: Changchuan Technology (001309.SZ), Jingzhida (688627.SH);

3) DDR5: Lanqi Technology (688008.SH), Juchen Co., Ltd. (688123.SH);

4) Car storage: Beijing Junzheng (300223.SZ);

5) NORFLASH: Zhaoyi Innovation (603986.SH), Pran Co., Ltd. (688766.SH), Hengshuo Co., Ltd. (688416.SH), Dongxin (). 688110.SH

Risk warning: Commercialization progress falls short of expectations, and technological breakthroughs fall short of expectations.