Transcend has expressed optimism for the second half of the year, anticipating a significant growth in sales driven by the introduction of AI PC products. The company's inventory currently stands at a high level of 5 billion New Taiwan Dollars, which is expected to contribute to the sustained high gross margins of over 30%.
The channel market, which accounts for approximately 45% of Transcend's revenue, is set to benefit from the upcoming AI PC products that will require at least 16GB of DRAM and 256GB of SSD, effectively doubling the storage capacity and creating a positive outlook for the new AI-driven market trends.
In the industrial application sector, which represents around 55% of the company's revenue, customers are actively developing edge AI applications. Although the demand in this sector may not materialize in the short term, Transcend anticipates a better growth opportunity in the next year, possibly two quarters later than the channel market.
Regarding pricing, the original manufacturer's HBM (High Bandwidth Memory) production capacity remains fully booked, leading to a capacity squeeze that is expected to result in continued price increases for DDR5. Transcend believes that there is still a 10-15% room for price adjustments for DRAM in the second half of the year.
In terms of new product developments, Transcend's latest PCIe Gen5 SSD is expected to enter mass production and hit the market in the third quarter. The sales of this product in the after-sales market will likely be stimulated after the launch of new AI PC models, with the potential for the product to account for 5% of the company's SSD revenue by the fourth quarter of this year, gradually increasing thereafter.
The news was originally published on June 21, 2024, by the China Flash Market, highlighting Transcend's robust market position and its strategic approach to leveraging the growing demand for AI-enabled computing solutions.
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