Edgewater Research: CES 2024 Highlights

Technology Supply Chain: Insights from the 2024 Consumer Electronics Show (CES)

The 2024 Consumer Electronics Show (CES) offered valuable insights into the current state and future trends of the technology supply chain, particularly in the fields of memory, compute, and mobile. This recap provides a comprehensive overview of the critical themes and trends emerging from the 2024 CES, offering valuable perspectives for stakeholders in the technology supply chain.

Below are the key highlights:

Memory and Compute Trends:

1. Memory Suppliers' Profitability Goals: Memory suppliers aim to reach break-even or profitability by the second quarter of 2024, with Samsung targeting the first quarter.
2. DRAM and NAND Pricing: The first quarter of 2024 is seeing a significant rise in DRAM and NAND prices, with DRAM expected to increase by approximately 15-20% and NAND by 20-30% or more.
3. Stable Utilization Rates: DRAM and NAND utilization rates are expected to remain stable through the first half of 2024, with potential increases in the second half.

PC and Smartphone Market Dynamics:

1. Limited Growth in PC and Smartphone Demand: The year-over-year growth forecast for PCs and smartphones remains modest, in the low single digits.
2. Emerging Trends in AI and Gaming PCs: AI PCs haven't emerged as a significant market driver yet, mainly due to underpowered CPUs and undefined use cases. Meanwhile, gaming PC demand follows a seasonal pattern, with no major changes expected in the near term.

Semiconductor Industry Challenges and Strategies:

1. Inventory Management: Semiconductor inventory reduction is anticipated to continue through the first half of 2024, with limited purchasing expected until the third quarter.
2. Supplier Profitability and Pricing Strategies: Suppliers, including Micron, Western Digital (WD), and Kioxia, are expected to see significant price increases. The industry is also witnessing a focus on returning to healthier profitability levels.

Mobile and Server Market Observations:

1. Server Market Outlook: The general purpose server market is stabilizing, with potential for low single-digit growth year-over-year.
2. Smartphone Market Shifts: The global smartphone market is likely to see modest growth, with significant changes in 4G and 5G phone dynamics. Apple and other manufacturers are adjusting their strategies accordingly.