Enterprise

RDIMM 

After a nearly 12 months straight of tight supply and steady price increases, the RDIMM market is at an inflection point.  While pricing pressures are evident, expected price increases in Q4 2024 will likely be moderate and demand signals outside of AI remain mixed to muted. 

October Trends

• Data Center and Cloud Services Demand: According to earnings reports from Micron Technology Inc. and Samsung Electronics Co., data center and cloud service providers, particularly those focused on AI technologies, are the primary drivers of RDIMM demand. 

• Growth in Traditional and Emerging Sectors: Additional growth comes from traditional industries undergoing server refresh cycles, as well as emerging opportunities in high-performance memory for mid-range devices and AI-capable tablets. 

• DRAM Shortages: Manufacturers have reduced capacity and utilization rates, which is causing supply and demand imbalances in the DRAM market. This trend will persist through 2025 as manufacturers make further adjustments and consequently impact RDIMM availability. 

• Rising Demand for 6400-Speed DRAM: The 6400 memory speed is expected to see increased demand in CQ1 2025, as it supports both Intel Granite and AMD Turin platforms. Currently, 6400 speed has a price premium of five percent to 20% over 4800/5600 speeds, with Micron having the highest premium. 

• Price Hikes in Q4 2024: Suppliers like Samsung, Micron, and SK Hynix are pushing for up to 20% price increases in Q4 2024. However, actual price hikes are likely more modest, with Samsung leading at around 12%. In Q1 2025, prices will stay flat or see a slight rise. 

• Surging Prices for DDR4 Higher Density Modules: DDR4 higher density modules saw a 35% price increase between June and July 2024 due to reduced production and a spike in demand, and prices remain elevated. Tiered pricing based on date codes has also emerged, with newer products consistently commanding a two to three percent premium—a pattern likely to continue through the coming months.

SSD 

The SSD market is seeing strong demand in data center and cloud sectors, though sales have slowed due to broader market conditions. As supply constraints for key components like NAND start to affect SSD production, pricing fluctuations are expected to play a more prominent role in shaping the market's trajectory. These trends will be critical in determining the outlook for the rest of the year and into 2025.

October Trends

• Data Center, Cloud, and Consumer Market Demand: According to top manufacturers Western Digital Co, Micron Technology, and Seagate Technology Holdings latest earnings reports, the data center industry is the primary driver for high-performance SSD demand. There is also strong growth in cloud environments and consumer markets, as enterprises invest in compute-intensive infrastructure and upgrade storage solutions to meet increasing data throughput requirements. 

• SSD Sales Decline: SSD sales slowed in September due to reduced market demand. However, market intelligence reports indicate that shortages of critical components used in SSD production could lead to renewed constraints in the market. 

• Top SSD Brands in Demand: Despite the overall slowdown, Samsung, Solidigm, and Micron remain the most requested SSD brands, indicating steady demand for high-performance and reliable storage solutions. 

• Component Shortages Impact SSD Production: NAND demand forecasts through 2025 exceeded expectations and show early warning signs that supply capacity and utilization rates will be unable to keep pace. This is expected to drive SSD shortages and could lead to rising prices as undersupply conditions persist. 

• Quarterly Price Increases: Prices for SSDs from major supplier Samsung have risen by 10-25% quarter-over-quarter, affecting all capacities. Alternatively, Solidigm’s pricing was flat.  

• Pricing Pressures for 2025: While some companies predict that SSD pricing could drop by the end of the year, this trend will depend on supply constraints for manufacturing. As NAND supply challenges continue, SSD buyers should prepare for the possibility of potential price increases heading into 2025, with the market remaining volatile due to ongoing shortages and supply chain issues.

CPU

Conditions in the CPU market are mixed, with tightening in specific segments. Both Intel and AMD face distinct supply challenges, but overall pricing remains soft for now. However, small-scale shortages and increased demand for particular server CPUs may lead to market fluctuations in the coming months, particularly as Intel phases out older generations and AMD contends with production delays. 

October Trends 

• AI PC, Data Center, and Enterprise Sector Demand: According to recent earnings reports from Intel, AMD, and Nvidia, CPU demand is being driven by the rapidly growing AI PC market, expected to rise from under 10% to over 50% by 2026. Strong demand is also seen in data centers and enterprise sectors, fueled by advancements in AI technologies. Key industries driving this demand include financial services, healthcare, retail, and automotive, as businesses upgrade systems for better performance and AI-driven applications.  

• Intel Ice Lake Server CPU Product Lifecycle Change: Intel is in the process of winding down the lifecycle of its Ice Lake server CPU, consequently reducing support for older models. Customers are consequently moving to newer generations, although AMD is gaining market share since Intel is not offering special pricing incentives. 

• AMD Server CPU Shortages: Market shortages are impacting AMD’s 7713 server CPUs as certain customers buy up production capacity. Additionally, AMD’s shipment de-commitments for the 7713 series could lead to gaps for both server and desktop CPUs.  

• Increased Demand for Intel Sapphire Rapids & Emerald Rapid Cascade Lake, & Ice Lake: Demand for Intel's Sapphire Rapids and Emerald Rapid gold and platinum CPUs is rising as data center and enterprise customers seek high-performance computing (HPC), AI, and cloud alternatives amid AMD’s supply constraints.  

• Delays in AMD Genoa Server CPUs: Lead times for AMD’s 4th Gen Genoa 9004X series are delayed by two to three months due to low yield rates and Taiwan Semiconductor Manufacturing Co’s (TSMC) chip-on-wafer-on-substrate (CoWoS) packaging bottlenecks. This, combined with the fact that TSMC’s advanced packaging capacity has been fully booked since May, is affecting AMD’s ability to meet market demand and support next-gen Nvidia products. 

• Intel Pricing Pressure: Intel is facing pricing pressure as customers increasingly turn to the open market due to unachievable rebate targets and reduced support. Recent Intel layoffs have strained operations, pushing customers to seek alternatives and resist Intel's pricing strategies.

GPU

The GPU market is in transition, with supply chain delays and product line disruptions straining key segments. Overall demand for servers and AI is being constrained by limited supply and the transition from Nvidia's H100 to H200 chips. However, the backlog of demand remains strong and is expected to increase soon, which explains the current short-term softness that contrasts with broader long-term trends. While the market is temporarily slow due to these bottlenecks and transitions, these disruptions will likely increase demand and pricing pressure. 

October Trends 

• AI, Data Center, and Enterprise GPU Demand: According to top manufacturers Intel, AMD, and Nvidia’s latest earnings reports, demand for high-performance GPUs is accelerating in the AI and data center sectors, particularly from enterprises in financial services, healthcare, and manufacturing seeking AI-powered solutions. AMD, Nvidia, and Intel are all experiencing significant growth in their GPU offerings due to increased adoption of generative AI workloads, large language models, and cloud services, highlighting substantial opportunities for tailored GPU solutions across these industries. 

• Packaging and Production Struggles: Nvidia's Blackwell B200 GPU relies on TSMC’s CoWos packaging, but TSMC is overstretched despite expanding production. Design flaws in the next-gen CoWos have led to potential quality issues and delays of 90 days or more, complicating production schedules. 

• Demand Shifts Due to Delays: Customers planning B200 projects are skeptical of Nvidia’s ability to limit delays to 90 days, with some expecting longer waits of 120-150 days. Many are pivoting to H200 and H100 GPUs, causing unexpected shifts in demand. Large end-users of H100/A100 have slowed procurement to reserve funds for successor models. 

• Anticipated vs. Unexpected Delays: Some customers foresaw the B200 production delays and were unaffected, while others, including major GPU users who didn’t plan short-term B200 projects, remain unimpacted. 

• Customer Dissatisfaction and Competition: Large language model companies are frustrated with Nvidia’s focus on hardware over service, leading some to consider AMD GPUs as potential replacements for the B series. To increase it’s competitive edge, AMD recently acquired server builder ZT Systems. 

• China and U.S. Tech War Impact: U.S. tariffs have banned several Nvidia models in China, causing price disparities. However, Nvidia’s H20 GPU has seen huge demand in China, generating $12B in revenue and outpacing local alternatives like Huawei’s Ascend 910B accelerator, with over one million H20 units expected to sell.

High Bandwidth Memory (HBM) 

The HBM market is severely constrained and highly dynamic, driven by surging demand and strategic shifts in production capacity. The rapid growth in AI applications and Nvidia's dominance is fueling this heightened demand environment, causing long lead times and pricing pressure.

October Trends

• AI and Data Center Demand for HBM: According to the latest earnings reports from Samsung Electronics and Micron Technology, demand for HBM is rapidly increasing, primarily driven by advancements in artificial intelligence (AI) and cloud computing. This surge is particularly evident in the AI and data center industries, with significant sales growth linked to the introduction of HBM3E products. 

• Products with Notable Demand Increases: Micron’s 12-high HBM product, with 20% lower power consumption compared to its 8-high predecessor, is gaining traction, while companies like SK Hynix are quoting lead times of over a year for new HBM orders. This surging demand is especially driven by high-performance computing and AI workloads. 

• Pricing Pressure and Stability: HBM pricing remains elevated due to its high-performance capabilities and intense demand from sectors like AI and data centers. Long-term agreements tied to specific products, such as HBM3 and LPDDR5, help stabilize pricing for suppliers like Micron, SK Hynix, and Samsung. These agreements provide multi-year visibility, with less volatility than lower-end memory components like DDR4. 

• Supply Constraints and Production Challenges: HBM3 and HBM3E production remains constrained due to the complex manufacturing processes and capital intensity required for advanced products like 12-high HBM. Wafer capacity reductions across the industry further limit bit growth, but gradual supply improvements are expected throughout 2025. 

• HBM Demand Causes Shift in DRAM Capacity: SK Hynix shifted about 20% of DRAM capacity toward HBM production, causing DDR5 prices to increase. Meanwhile, Samsung has allocated 30% of its DRAM production to HBM3E to meet Nvidia’s demand for its Blackwell GPUs. On top of pricing pressure, this trend could lead to DDR5 shortages later this year, as wafer supply is prioritized for high-demand HBM products.   

• Rising Complexity and Competitive Differentiation: The transition from 8-high to 12-high HBM, alongside advancements in power efficiency and performance, is accelerating ramp-ups throughout 2025. Micron’s leadership in power-efficient HBM products, such as its 12-high HBM, differentiates it from competitors entering the market, though Samsung's massive production capacity for HBM3E could shift the competitive landscape.

HDD

The HDD market is experiencing supply constraints as lead times extend, especially for high-capacity models. The combination of extended delivery times and Seagate's new ordering procedure highlights growing demand alongside logistical challenges, which could further tighten the market in the coming months. 

October Trends 

• Cloud Computing and AI Sector Demand for HDDs: According to the latest earnings reports from Western Digital and Seagate Technology, demand for HDDs is rising, particularly in the cloud computing and AI sectors. Significant growth in nearline cloud storage and mass capacity shipments reflect companies' transitions to advanced technologies to address increasing data storage needs in hyperscale cloud and enterprise data centers. Cloud providers are particularly focused on investing in scalable, energy-efficient HDDs to support their AI applications. 

• Raw Material Shortages Increase Lead Times: Manufacturers like Western Digital and Seagate cite raw material shortages as the reason behind increasing lead times. Western Digital lead times increased by four weeks, while Seagate lead times increased by six weeks. 

• Extended Delivery Times: Seagate is experiencing delivery delays of 30-33 weeks for high-capacity HDDs, prompting the company to implement a new ordering procedure. There has been little improvement in booking lead times for HDDs, particularly for major manufacturers like Seagate, Western Digital, and Toshiba, indicating ongoing supply constraints. 

• High Demand for High-Capacity HDDs: The surge in demand for high-capacity HDDs is driving market dynamics, with mid-tier server original equipment manufacturers (OEMs) particularly affected by the prolonged delivery timelines. 

• Enhanced Supply Visibility: Manufacturers have requested a full 52-week commitment on orders across all product ranges, starting in Q3 2024, to improve supply chain visibility. 

• Market Fluctuations Anticipated: As manufacturers adjust to the new ordering processes, market fluctuations in availability

Networking

Network Interface Cards (NIC)

The NIC market is currently characterized by supply constraints and shifting production priorities as manufacturers prioritize high-profit margin products. Delays, shortages, and changes in capacity are causing bottlenecks, especially for Mellanox products. Meanwhile, competitors like Intel are capitalizing on these issues by offering competitive pricing to gain market share, mainly on 100 Gbps or lower data rate specs.

October Trends

• AI-Driven Data Centers and Edge Computing Demand: According to the latest earnings reports from Intel, Broadcom, and Nvidia, demand for networking products is increasing, particularly in AI-driven data centers, edge computing, and hyperscale environments. This growth is driven by investments in AI networking solutions and custom accelerators. Notable revenue increases from these companies highlight substantial opportunities for enhancing enterprise networking infrastructure to support advanced AI capabilities.  

• Mellanox ConnectX-CX6 Supply Issues: Customers report a lack of confirmed delivery dates for Mellanox’s ConnectX-CX6 NIC as lead times extend. This stems from the company shifting focus to CX7 production. The addition of networking customers releasing new projects to their OEMs has added to demand and exacerbated the supply imbalance.  

• Intel Ethernet Adapter Demand Recovery: Demand for Intel Ethernet Adapters is recovering to pre-COVID levels, especially for Open Compute Project (OCP) models. The OCP platform’s expandability and efficiency are boosting interest in Intel's NIC cards among major server makers and system integrators in China. 

• NIC Pricing Pressure: In an attempt to capture market share and AI demand, Intel offers competitive pricing for 100Gbps dual-port NICs, nearly half the cost of equivalent Mellanox models. Additionally, Broadcom’s prioritization of AI-related products is complicating order confirmations for non-AI parts and has led to consistent price increases on existing orders. 

• AI Applications Drive Switch Market Activity: PCIe Switch Interface ICs – SS2X see significant activity as AI applications seek switches that can manage high-speed data transfer among different components. Consequently, Broadcom demand is on the rise. As customers prepare for the launch of Gen 6 switches, which will be paired with the launch of the B100/B200 models, the demand for Gen 5 switches may decline significantly. This could result in the Gen 5 switches becoming obsolete, further exacerbating the issue of excess inventory. 

• QLogic Fiber Channel Adapter Support Issues: Support for QLogic Fiber Channel adapter cards has been inadequate, impacting data center, IT infrastructure, and enterprise customers who rely on these products for connecting storage arrays to servers.

PC & Consumer

Mobile CPU

The mobile CPU market is stabilizing, but selective shortages and anticipated pricing increases highlight the need for proactive planning and strategic purchasing decisions. Inventory concerns remain a headwind for smartphone OEMs, impacting overall demand in the mobile CPU market. In a recent earnings call, Micron noted that these OEMs should have inventory under control by spring 2025. While overall market demand is rising, specific Intel and AMD processors face supply constraints, creating mixed buyer conditions. 

October Trends 

• Automotive, IoT, and Smartphone Sector Demand: Recent earnings reports from Qualcomm and MediaTek highlight strong demand for Mobile CPUs, particularly in the automotive, IoT, and smartphone sectors. Qualcomm's $8.1 billion chipset revenue is bolstered by AI integration in devices like the Galaxy Z Fold6. Meanwhile, MediaTek reported a 52% year-over-year increase in mobile phone revenue, driven by demand for 4G SoCs in emerging markets and advancements in 5G AI smartphones. 

• PC Shipment Recovery: PC shipments grew for the second consecutive quarter ending in June 2024, marking a significant turnaround after seven quarters of declining sales. IDC highlights that prices reached their lowest point at the end of 2023 due to oversupply, suggesting a recovery trend as the industry rebounds. 

• AI May Boost Mobile CPU Outlook: Market intelligence sources indicate pockets of positive growth in Chromebooks, a trend that may expand thanks to AI market activity. Intel’s AI PC from the Lunar Lake series is set to launch in Q3, testing the strength of customer’s AI demand. Visibility into the sustainability and success of this launch is limited, as there are only minor forecasts loaded into Q4 at this time. 

• Demand Trends for AMD Mobile CPUs: Distributors are observing an increase in open market demand for AMD mobile CPUs, particularly the Ryzen 5000, 7000, and 8000 series. 

• Shortage of Intel Elkhart Lake J6412: The Intel Elkhart Lake J6412 processor, designed for embedded and IoT applications such as industrial systems, medical devices, and point-of-sale terminals, is currently in short supply. 

• Supply Constraints on Alder Lake Small Cores: There are ongoing shortages of Intel's Alder Lake small cores (e.g., N200, N305), as the company has reportedly received more orders than it can fulfill. Distributors indicate that allocations for N200/N300 remain scarce, with no shipments expected in the next four weeks.

Desktop PC

The desktop PC market is seeing strong demand for high-end CPUs, but supply constraints and warranty concerns require customers to be strategic and agile in purchasing and planning decisions. While Intel sees tight supply and warranty concerns, AMD Ryzen CPUs benefit from this shift, presenting mixed opportunities and challenges for buyers.

October Trends

• Commercial and Premium Market Demand: Recent insights from Dell Technologies and Lenovo Group indicate a rising demand for Desktop PCs, particularly in commercial and premium markets. Dell reported modest growth in commercial PC demand, anticipating a refresh cycle due to an aging installed base and the impending end-of-life for Windows 10. Meanwhile, Lenovo expects a shift toward AI capabilities in the PC market, with significant growth in premium sales reflecting consumer preference for high-end devices. 

• Desktop CPU Supply Constraints: Limited availability of the 12th Gen Alder Lake CPUs, including Core i3/i5/i7/i9 (GT0), is expected to continue through Q4, with Pentium and Celeron supplies remaining tight until late January 2025. Additionally, the 13th Gen Raptor Lake's Core i7 and i9 will be available until December, although their 14900 and T SKUs face limited supply. The upcoming 15th Gen Arrow Lake is slated for new product introductions in Q4 2024, indicating a shift in the market landscape. 

• Intel Warranty Extension: Intel has extended the warranty for its 13th- and 14th-Gen Core processors by two years due to instability issues. The instability issues have led to a surge in demand for AMD Ryzen CPUs as an alternative, which could affect Intel's market share. 

• Workstation Series Activity Increases: Interest in Intel’s workstation series has surged, driven by the increasing need for high-performance desktops in 3D rendering, video editing, and engineering applications. The Intel 12th Gen Desktop CPUs (12400, 12700) are particularly in high demand as users seek robust solutions for data-intensive tasks. 

• AMD Market Gains: As Intel faces quality and supply issues, AMD Ryzen CPUs are gaining traction in the market. The growing preference for Ryzen processors indicates a shift in consumer choice. 

• Pricing Stability Expected: After a period of price volatility, market forecasts indicate that desktop CPU prices are likely to stabilize as supply constraints ease and demand levels off. This shift could create a more favorable environment for buyers in the upcoming months. According to their recent earnings report, Micron expects that PC OEMs will have their inventory issues under control by spring 2025.

Consumer GPU

The consumer GPU market is increasingly competitive, with significant supply constraints as manufacturers compete for market share related to AI. NVIDIA’s accelerated launch schedule and ongoing shortages for key models create a dynamic environment, with rapid changes expected in late 2024. This evolving landscape, driven by new product launches and persistent supply issues, highlights the importance of early planning and strategic procurement to prepare for pricing and availability fluctuations.

October Trends

• Manufacturer Insights on Industry Demand Drivers: Recent earnings calls from Nvidia and AMD highlight increasing demand for consumer GPUs, primarily driven by AI and the gaming industry. Nvidia's RTX GPUs are enhancing gaming experiences through AI capabilities, bolstered by a vast ecosystem of applications and cloud gaming services. AMD also reported rising revenue from its Radeon 6000 and 7000 series GPUs, reflecting strong sales in gaming graphics. Despite challenges in consumer spending, particularly in China, a recovery is anticipated as traditional refresh cycles encourage consumers to upgrade GPUs to meet evolving performance demands. 

• Demand for Performance Impacts Power Efficiency: Nvidia’s latest GPUs, including the RTX 50 series, are expected to significantly outperform older series with a substantial increase in TGP (total graphics power). While functionality will be better than RTX 40s, higher power consumption is expected as a consequence. . 

• NVIDIA Blackwell GPU Launch: Nvidia accelerated the launch of its Blackwell consumer GPU, moving the timeline from early 2025 to late 2024. This change is likely to compete with AMD’s upcoming RDNA4 series. 

• Increased Competition with AMD: As Nvidia and AMD gear up for their next-gen launches, the competition between the two is expected to intensify, especially with the timing of seasonal demand from year-end holidays. The timing of product releases could significantly impact sales strategies and market share in the consumer GPU segment. 

• RTX 4090 Supply Issues: The RTX 4090 is experiencing significant supply constraints due to a shortage of GDDR6X memory and the reduced supply of GPU chips due to Nvidia preparing for the launch of the RTX 50. This limited availability may lead to higher prices and increased competition among buyers in the high-end desktop GPU market. 

• Potential Price Fluctuations: Due to supply constraints and high demand, prices for high-end consumer GPUs like the RTX 4090 may fluctuate. Buyers may need to stay agile in their purchasing decisions to navigate the evolving pricing landscape in the coming months.

PC DIMM

Activity in the PC DIMM market remains slow, with minimal pockets of sustained demand for products tied to AI. Due to this, OEMs are concerned that they will need to bear the costs of high inventory until the market rebounds.

October Trends

• AI and Server Market Demand: Recent earnings reports from Micron indicate a positive outlook for fiscal 2025, with demand for DIMMs driven by the AI and traditional server markets. The company expects strong growth in both AI servers and general-purpose servers, creating a balanced demand for high-capacity DIMMs. While traditional servers are gradually recovering, the demand for advanced PC DIMMs is anticipated to rise, supported by robust application software deployment across IT departments. 

• Pricing Increase for DIMMs: Despite sluggish overall demand, prices in the PC DIMM market are projected to rise by eight percent to 10%. This forecast may be indicative of supply constraints or necessary cost adjustments. 

• DDR4 DIMM Trends: DDR4 DIMM demand has proven more robust than initially expected. This ongoing interest may result in potential shortages if supply struggles to keep up with the heightened demand. 

• Supply Chain Challenges: Persistent supply chain challenges could impact on the availability of DIMMs, further complicating market conditions as manufacturers attempt to balance production with rising demand. 

• Market Dynamics Shift: The increased prices and ongoing demand for DDR4 DIMMs may lead to a shift in market dynamics, influencing buyer behavior and procurement strategies. 

• Future Outlook: As demand for DDR4 remains strong and prices are on the rise, buyers will need to adapt to potentially fluctuating costs and availability in the coming months. 

Finished Goods

Compute Modules and Motherboards

The compute modules market is feeling the effects of tariffs on Nvidia Jetson products and related Developer Kits. These tariffs are causing market fluctuations, significantly impacting both supply levels and demand dynamics. The motherboard market is currently characterized by increasing competition from Chinese brands and rising prices due to strategic shifts by key players. Additionally, Supermicro's move towards complete server assemblies has resulted in higher minimum order quantities (MOQs) and longer lead times, increasing pricing pressures.

October Trends

• AI Drives Demand for Jetson Products: Nvidia’s Jetson card series and related Developer Kits remain highly sought-after, reflecting strong demand that could soon impact their availability, particularly as tariffs may drive up prices. This demand trend is primarily driven by their applications in edge AI computing, robotics, and the Internet of Things (IoT). 

• Tariff Implications: Nvidia Jetson cards are not exempt from tariffs, which could lead to increased costs for buyers as demand surges with customers rushing to secure supplies before price hikes. Historical trends show that tariffs have previously caused price increases of 10-15%. 

• Increased Competition with Chinese Companies: The entry of competitively priced Chinese-branded server motherboards, such as those from Huawei and Inspur, is causing notable market share shifts and impacting traditional players like Supermicro. 

• Market Share Shifts: As Chinese manufacturers expand their presence, traditional brands may need to reassess their strategies to remain competitive and maintain their market positions. 

• Rising Prices: Prices for motherboards, particularly from Supermicro, are on the rise. This increase is driven by heightened demand and changes in sales strategies that elevate costs. 

• Sales Strategy Changes: Supermicro's transition to selling complete server assemblies has resulted in higher minimum order quantities (MOQs) and longer lead times, further contributing to the upward pricing trend.

Board Level Memory

DRAM

The DRAM market is undergoing a period of transition, shaped by evolving technological demands and shifting production priorities. The shift towards next-generation solutions is driven by growing demand in high-performance computing, new production cycles, and competitive pressures. As manufacturers adjust to these changes, supply dynamics, lead times, and pricing structures are being impacted, influencing both consumer and enterprise markets.

October Trends

• AI, Cloud Services, and Automotive Industry Demand: Recent earnings reports from leading manufacturers Samsung and Micron reveal strong demand for conventional DRAM, primarily driven by investments in AI from cloud service providers. Both companies emphasize that AI servers require substantial conventional DRAM alongside high bandwidth memory (HBM), sustaining demand for products like DDR5. Additionally, the traditional server market is experiencing a refresh cycle, enhancing efficiency and performance, while the integration of AI features in smartphones and growth in automotive applications further increase DRAM content requirements. 

• DDR3 and Industrial Sector Dynamics: Demand for DDR3 remains strong in the industrial sector, but consumer demand is weak. While Micron's longevity program supports DDR3 supply, Samsung and SK Hynix are scaling back production in favor of DDR4 and DDR5, leading to increased lead times for these newer technologies. 

• Impact of Chinese Competition on DDR4: China-based suppliers are exerting pressure on the lower-end DDR4 market, commonly used in budget PC systems. However, due to the complexity and demand for DDR5, competition in the high-performance DRAM space remains limited due to customer preferences. 

• HBM Influence and Market Share: HBM’s influence on DRAM supply dynamics is growing, especially as manufacturers transition from HBM2E to newer versions. This is contributing to pricing and production shifts across the DRAM market. 

• DDR4 to DDR5 Transition: The availability of DDR4 components is decreasing as manufacturers focus on meeting the demand for DDR5, particularly 32GB and 64GB modules at 4800 and 5600 speeds. This is impacting the consumer and enterprise PC memory markets. 

• DDR5 Pricing Increases: HPC applications, particularly in PCs and data centers, are driving demand for DDR5 as customers transition away from DDR4. With elevated booking prices, companies like Micron, Samsung, and SK Hynix are preparing for further increases in Q4, potentially raising DRAM component costs by five to eight percent. DDR4 pricing remains relatively stable.

LPDDR

The LPDDR market is evolving quickly as demand for next-generation memory solutions increases. Although supply pressures and potential shortages present challenges, long-term contracts are helping to mitigate disruptions. With key players incorporating LPDDR5X into new technologies, the market is set for further shifts, and rising demand is expected to impact supply and pricing through 2025.

October Trends

• On-Device AI in Consumer Electronics Drives Market Activity: Insights from leading manufacturers Samsung and Micron’s recent earnings reports highlight a surge in demand for LPDDR, driven by the rise of on-device AI in smartphones, which prioritizes lower power consumption. 

• Transition to LPDDR5: The shift from LPDDR4 to LPDDR5 is accelerating, particularly for data centers and AI applications, with demand for LPDDR4 declining. LPDDR5 is favored in the consumer electronics industry, which is contributing to forecasts predicting shipments will rise during the holiday season. 

• Increasing Demand and Supply Pressures: Strong demand for high-capacity LPDDR5 and LPDDR5X modules is creating supply pressures, especially for mobile phones, tablets, and AI products. Tight supply for LPDDR5X is anticipated by early 2025, with suppliers projecting continued shortages through 2025. 

• Intel's LPDDR5X Integration and Rising Prices: Intel’s Lunar Lake Mobile CPU will integrate LPDDR5X, marking a significant milestone, though it may delay launch to Q4 2024.  

• High Margins from Premium Products: LPDDR5’s complexity and strong demand from AI and data centers contribute to higher margins. As premium products like LPDDR5 and HBM dominate, manufacturers see better profitability, particularly with demand forecasted to rise through 2025. 

• Stable Pricing through Long-Term Contracts: Prices for both LPDDR5 and LPDDR5X are projected to rise due to continued robust demand, with LPDDR4 also experiencing more moderate increases. However, at the moment LPDDR5 and advanced memory product pricing are stable thanks to long-term contracts and multi-year agreements. This visibility allows both suppliers and customers to manage costs and mitigate pricing surprises.

Integrated Circuits

ICs

As manufacturers contend with production capacity constraints and rising material costs, the risk of shortages looms for the IC market. This possibility depends on a rebound in demand in critical sectors like automotive and IT datacom. Additionally, heightened interest in end-of-life products presents challenges and opportunities as businesses navigate price surges and potential discontinuations. To combat disruption, companies are increasingly adopting strategic supply management practices, such as long-term inventory agreements, to stabilize their operations in an unpredictable environment.

October Trends

• AI Advancements Drive IC Market Trends: Recent earnings reports from leading manufacturers Intel and Texas Instruments indicate that demand for integrated circuits is driven by advancements in AI and growth in the industrial and automotive sectors. 

• Rising Automotive Demand: The automotive sector is driving significant interest in specific manufacturer part numbers (MPNs) like onsemi's MTXX and NCP series. STMicroelectronics (STM) and Analog Devices are also witnessing increased demand for their components, especially in the context of returning customers from Chinese brands. The demand for PMICs in automotive applications is expected to grow, requiring manufacturers to focus on high-efficiency solutions. 

• EOL Product Demand: There is heightened activity surrounding end-of-life (EOL) products, particularly for Xilinx parts, with significant price surges expected. Companies must act quickly to secure necessary components before impending discontinuations, as many items face production cuts and lead time extensions. Some Xilinx last time buy (LTB) orders issued in June are already facing delays and delivery has been pushed out to 2025 by the manufacturer. 

• IC Production Capacity Constraints: Major manufacturers like onsemi and Maxim are reducing production capacity, which could lead to shortages if demand rebounds in 2025. Onsemi's current 65% operational capacity highlights ongoing challenges that may affect inventory levels. 

• Supply Management Strategies: Infineon and onsemi are implementing long-term inventory management agreements with key customers to ensure just-in-time delivery, reflecting a shift in focus towards stable supply amidst rising demand. 

• MCU Pricing Surge: Continuous price increases for MCUs, particularly from STM and NXP, are linked to reduced inventory levels and rising raw material costs. The anticipated growth in IT datacom indicates that manufacturers should prepare for increased MCU demand and potential price hikes; customers are advised to negotiate effectively amidst changing market dynamics.

Connector

Consistent demand across various industries is resulting in extended lead times, highlighting ongoing supply chain pressures in the connector market. The ongoing volatility is driven by heightened demand for certain product categories, particularly in medical and military applications. Rising raw material costs are contributing to supply shortages and production challenges. While lead times for some connector types remain stable, prices for components are surging due to limited availability.

October Trends

• Telecommunications and Rugged Sectors Demand: Recent reports from Amphenol Co. show strong demand for connectors in telecommunications and data communications, with its Communications Solutions segment growing by 24%. The Harsh Environment Solutions segment is also experiencing increased demand in sectors like aerospace and military, driven by defense and IT datacom investments. 

• Automotive and Computing Connector Trends: TE Connectivity reports that the shift toward zonal architectures in automotive and computing is boosting the need for complex connectors capable of transmitting multiple signals, which enhances overall system performance. 

• Market Turbulence: The connector market has become increasingly volatile, with urgent requests for TE Connectivity, Molex, and Amphenol connectors driven by issues in medical, advanced, and military-grade items, largely attributed to raw material shortages. 

• Raw Material Impact: Rising raw material costs, particularly high copper prices, are contributing to shortages and reduced production of connectors, compounded by incidents such as a recent fire at a TE Connectivity subcontractor. 

• Molex Lead Times: The lead time for Molex's FFC/FPC Board Connectors is stable at 2-3 months for products sourced from Japan, Malaysia, and Korea, but extends to around 5 months for items from India. Applications span IoT devices, drones, security cameras, and medical equipment. 

• AI Server Cooling Systems: In AI server liquid cooling systems, the CDU and manifold connectors are significantly expensive, with prices soaring due to limited supply. Taiwanese manufacturers like Global Tek are entering the quick connector market, aiming to submit samples and secure orders by Q4 or early next year. 

Passives

Resistor, Capacitor, and Inductor 

The slowdown in the automotive industry is impacting the resistor, capacitor, and inductor market despite stable demand from industrial and consumer electronics industry customers. The chance of future inventory reductions in the more robust industry sectors raises worries about oversupply, which could introduce pricing pressure.

October Trends

• Manufacturer Insights on Industry Demand Drivers: Vishay Intertechnologies’ recent earnings report noted increased demand for passive components driven by automotive, industrial, and AI computing sectors. This demand drove growth in inductors and optoelectronic component sales. 

• Stable Demand: Overall demand for passive components is expected to remain stable, particularly in industrial and consumer electronics applications.  

• Lead Time Updates: For inductors, lead times can extend to 6 months for products manufactured in Japan and three months for those produced in other countries, underscoring the need for careful inventory management given the potential for oversupply and fluctuating demand. 

• Impact of Automotive Slowdown: The slowdown in the automotive sector may negatively affect sales of passive components associated with automotive applications. 

• Potential Oversupply: Destocking in industrial sectors could result in a temporary oversupply of passive components, impacting various product lines. While industrial industry activity has proved steady in this market, other electronic component commodity groups are seeing weaker demand. 

• Pricing Pressures: Should demand shift in the currently strong markets, oversupply would cause pricing pressure within the passive component market. Murata inductors would likely be amongst the first to see price increases, as lead times for these components are already long. 

MLCC

The MLCC market faces supply constraints driven by increased demand, particularly from customers within the AI and automotive sectors. Supply chain disruptions and anticipated market tightness in early 2025 will likely impact availability and pricing.

October Trends

• Energy, Automotive, and Industrial Automation Propel Demand: Vishay Intertechnology's recent earnings report highlights that the energy, automotive, and industrial automation industries are driving demand for MLCCs, especially in high-voltage DC applications, factory automation, and renewable energy systems.  

• Emerging Industry Trends: Vishay also called out the increased focus on smart grid infrastructure and energy storage further emphasizes the need for MLCCs that manage complex power tasks. As these industries continue to recover from the prolonged excess supply cycle, demand for MLCCs may expand. 

• Automotive-Grade MLCCs in AI: AI applications are increasingly utilizing automotive-grade MLCCs. Major OEMs report an uptick in activity and transactions for the most recognized MLCC makers, namely Murata, Taiyo, Samsung and Yageo. 

• Price Increases Across the Board: Pricing for MLCCs is on the rise, with manufacturers like AVX, Kyocera, and Murata reporting significant increases. For instance, the GQMWI series is anticipated to see a 10% increase, while certain MPNs could rise by up to 50%, signaling the onset of broader market shortages. 

• Positive Production Trends Amid Competitive Pressures: The short-term outlook for the MLCC market shows increased operational rates, with Samsung Electro-Mechanics reaching over 90% capacity due to rising demand from AI servers, AI PCs, and smartphone launches, notably the iPhone 16. However, despite this surge in production, stagnant sales prices resulting from intense competition may limit profitability. 

• 2025 Forecasts: MLCC manufacturers predict the market will be constrained by early to mid-2025, a pattern that aligns with previous heightened demand cycles and is supported by early indicators such as rising memory prices and extended lead times. However, analysts expect that while AI-related demand expands supply, significant price recovery could be delayed until the second half of 2025, further complicating the market dynamics. 

Polymer Capacitor

The polymer capacitor market is experiencing significant strain due to heightened demand for AI and server applications. Extended lead times and increased pressure on production capacities are key trends affecting the availability and pricing of capacitors across various sectors. Panasonic, a leading manufacturer in this space, noted on their recent earnings call that operating utilization rate is down from the beginning of the fiscal year and the company is working to gradually increase capacity in certain facilities.

October Trends

• Data Centers, AI, and Automotive Energy Systems Fuel Polymer Capacitor Market: Insights from leading manufacturers Panasonic Corporation and TDK Corporation's recent earnings reports indicate varied demand trends. Panasonic noted that data centers, AI, and automotive energy systems are driving increased demand. TDK reported similar trends in the automotive sector but also highlighted increased activity in industrial equipment, particularly solar and photovoltaic systems. 

• Widespread Usage in AI/ML: Panasonic capacitors are crucial for AI/ML, server, and data center applications, but limited manufacturing capacity cannot meet the growing demand. Panasonic also stated in their recent earnings report that generative AI was a major contributor to positive sales trends and offset weakness in the company’s other markets. 

• Challenges for Tier-1 Manufacturers: Market intelligence sources have confirmed the difficulties in securing the supply of these capacitors and noted that lead times are unstable due to the imbalance in demand. 

• Surge in Demand Across Applications: Demand for Panasonic capacitors has significantly increased across various sectors, including servers, laptops, displays, graphics cards, data centers, and industrial control boards. As a result of this surge, capacity is currently fully booked. 

• Impact of Nvidia on Supply: Nvidia has absorbed a substantial portion of Panasonic's production capacity, particularly for high-temperature capacitors (105°C). As a result, lead times for several series have surged beyond 140 days, further tightening supply. 

• Long Lead Times for Capacitor Types: Lead times for polymer tantalum capacitors are currently 24 weeks, while polymer aluminum capacitors experience lead times of 16 weeks, impacting multiple series.