Memory Spot Prices are Starting to Warm up
Order activity for semiconductor equipment increased to 55 °F with most segments jumping a degree. Memory fundamentals are improving due to supply reductions for both DRAM and NAND. Memory chipmakers have been cutting production since Q4 2022 to restore balance to the supply chain. These efforts are starting to have an impact on prices. Memory spot prices have been increasing considerably over the last month and contract prices are also trending higher. Nonetheless, memory inventories remain elevated and end-demand is weak, resulting in a slow recovery process. Memory inventories—while improving—are still running 2x higher than the norm. As a result, we expect a challenging business environment for memory manufacturers—in terms of underutilization and profitability—for at least another quarter.
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