We are near the end of CQ2 and data is leaking out on the future. Some predictions from MKW Ventures Consulting. Reminder: Information comes from the discussion on these points as there are pages of data and models behind each one.
1) 2H recovery might happen, but the data doesn't seem to show that. It looks like the 2H "recovery" will be described as "it didn't happen due to other issues" and "we are recovering. Earnings stopped dropping". I like to call these "alternative facts". We can discuss when the real recovery will happen and how to monitor it.
2) Inventory at end customers is dropping and will reach normal amounts in 2H. However, supplier inventory and channel inventory still exists. This causes end customers to push inventory levels below target amounts and to drive prices down
3) NAND/DRAM bit demand will start to grow again in 2H but overall bit growth will be at or below historical levels (CAGR 35% NAND, 15-20% DRAM). This will not get the market to "recovery". Revenue and earnings are still in "trough"
Bonus Prediction: There will be a recover and we can predict the timing. Inventory will go to normal at supplier and below normal at end customer. Then comes and small demand trigger and the shortage... we can discuss when this will happen.
Bonus Prediction 2: China and Trade... companies are changing their supply chain to deal with China tariffs. This will lead to shipment from and through other countries instead of China. However, uncertainty on how these tariffs play out is slowing growth and investment. China attempts to make memory in China with Chinese owned companies will continue to be VERY minor despite hype until at least 2022 ... but non-Chinese companies will continue to have lots of Fab output from China that has no trade restrictions with the US.
Just an opinion! We will have lots more data at Flash Memory Summit
Mark Webb
www.mkwventures.com
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