TrendForce's Memory Oversupply Viewpoint Refuted: Slowing Price Growth a Normal Sign, High Price Market to Persist Until 2027

August 12th, FundaAI released a memory market analysis, explicitly refuting TrendForce's recent observation that the average memory price has stabilized and will face oversupply in the future. FundaAI believes this is a structural normalization process driven by two main factors:

First, the price sensitivity of consumer electronics. End-user devices such as smartphones have a very limited capacity to withstand further memory price increases, while PC OEMs have a higher baseline price and stronger tolerance for price hikes due to rigid demand in the education and commercial sectors;

Second, the continuous increase in long-term supply agreements. Cloud service providers are actively signing LTAs, locking in prices usually below short-term contract prices. As the percentage of LTAs increases, the overall price growth naturally slows down. However, memory manufacturers, at the same time, benefit from prepayments and penalty mechanisms for breaches, enhancing revenue stability.

FundaAI interprets the current slowdown in price growth as a sign of the memory market's healthy development, rather than a harbinger of oversupply from 2027 to 2028. It is expected that with further increases in the LTA percentage and a continued shift in product mix towards the data center, memory prices will remain high until 2027, rather than collapsing after reaching their peak.