A few financial reports have been published recently which are tangentially related to this thread.
Firstly, Samsung's quarterly report (
presentation). Not a good quarter for Samsung, with the lowest operating profit since 2009 (with profit down 95% YoY), which was mainly driven by losses in the memory division (which includes RAM and flash memory). Memory revenue is down by 56% YoY, and they've recently said they'll cut production due to the drop in demand.
Next, SK Hynix (solely a RAM/flash memory producer)
reported a 58% YoY drop in quarterly revenue. A few weeks ago Micron (also solely a RAM/flash memory producer) reported a 53% YoY drop in revenue in
their quarterly report.
Samsung, SK Hynix and Micron account for almost the entire global RAM production, and a large chunk of the global flash production, so with each of them reporting over 50% YoY drops in memory revenue, I think it's safe to say that the chip shortage is well and truly over, for the memory sector at least, and we're now well into the era of oversupply.
The upshot of this is a significant drop in memory prices. On the RAM side, prices have
reportedly dropped by around 20% in the first quarter of the year, and are expected to drop by 10-15% in Q2. This is roughly in line with SK Hynix's presentation, where they reported a "High Teen%" QoQ drop in ASP for their RAM business (although there's likely a change in product mix in there).
Flash prices are also dropping, although by slightly less, with prices
reportedly dropping by 10-15% in Q1 and expected to drop by a further 5-10% in Q2. SK Hynix reported an "Around 10%" QoQ drop in ASP for their flash business (again likely including a change in product mix).
While prices aren't expected to drop to the same extent in the second half of the year, I'd expect them to stay low. Samsung quoted price elasticity as a driver for increased demand in their memory outlook for both Q2 and H2, which basically means that they're expecting to rely on the drop in prices to encourage customers to purchase more, or higher capacity, memory products.
Coming back to Nintendo, RAM, and to a lesser extent flash memory, are significant costs in the Switch, and will be again in their new hardware. Looking just at mobile RAM/LPDDR, it's reported to have dropped in price by 13-18% in Q1 and projected to drop by a further 10-15% in Q2, so LPDDR4/5 will likely cost about 26% less in July than it did 6 months previously. On the flash memory side, eMMC/UFS is reported to have dropped by 10-15% in Q1 with a further 8-13% in Q2, which comes to around a 22% drop in price over the first half of the year.
For current Switch hardware, this should mean Nintendo's margins will increase a bit over the course of the year. For their new hardware, it may give Nintendo the option to use slightly higher capacity RAM or flash memory than they otherwise would have. Memory interfaces are locked in relatively early as part of the SoC design, so moving to faster memory is unlikely to be an option, but changes to memory capacity can be made at a relatively late stage, as it's just a matter of switching to a higher capacity part before manufacturing begins.
