DRAM contract prices to rise over 10% sequentially in fourth quarter as memory demand stays hot, says TrendForce.
DRAMeXchange latest analysis on DRAM mirrors the contexts of the demand growth of computers and wireless. It projects an example of the market scenario in china where smartphone brands are increased due to demand.
Taiwan-based OEMs in the second half of 2016 are achieving continuous Server orders. The rise is by around 20% on average versus the year’s first half. It is probable because of the increased response to shifting market demand.
DRAM manufacturers have significantly raised mobile and server DRAM outputs since the second quarter while scaling back their PC DRAM shipments.
Avril Wu, research director of DRAMeXchange said, “Mobile DRAM is expected to make up nearly 45% of the global DRAM shipments this fourth quarter while the share of server DRAM will exceed 25%”. “PC DRAM by contrast will constitute less than 20% of the entire fourth-quarter shipments.”
In comparison, the demand for notebooks in North American market 3rd quarterly has picked up due to major brands such as HP and Dell. The increase in respective notebook shipments is more than 8% sequentially. The contract prices of 4GB PC DRAM modules (DDR3 and DDR4) have now stabilized at US$13.5 on average as supply decreases. In the fourth quarter, DRAM makers keeping the intention of profit consideration will continue to expand mobile DRAM output. It is at the cost of PC DRAM manufacturing.
DRAMeXchange expects the rise in PC DRAM prices with the average contract price of 4GB modules (DDR3 and DDR4). It increases 15% sequentially to US$15.
Most of DRAM products will continue to improve at the end indicating market equilibrium in a good way through much of 2017.
The boost of Chinese smartphone market is due to the release of the upcoming iPhone. In the mobile DRAM market, it would stock-up activities so as to reach peak level in the fourth quarter.
Contract prices of mobile DRAM are likely to post larger positivity during the fourth quarter. NAND Flash prices in fourth quarter will be on upswing as major OEMs scramble for memory components. Demand has started to overcome supply in the NAND Flash market during the third quarter. The stock-up demand generated by Apple and Chinese smartphone brands such as Huawei, Vivo and OPPO has been greater than anticipated. It is consuming a huge part of the overall production capacity for planar (2D) NAND Flash. The manufacturers of NAND Flash have fallen behind in their schedules for the transition to the 3D-NAND technology. As supply decreases in the third quarter, the demand for enterprise-grade SSDs and the penetration of notebook SSDs are increasing. All these have caused a gap between supply and demand in the NAND Flash market during this period.
Major NAND Flash suppliers such as Samsung, Toshiba, SanDisk and Micron have significantly reduced their shipments to memory module makers Due to OEM demand and challenges related to technology migration. Module makers are forced accept price hikes from suppliers due to supply shortage. Data from DRAMeXchange shows that prices of mainstream 128Gb TLC wafers rose 10% from the end of June to the second half of August.
During the fourth quarter, OEM clients are fairly conservative regarding the progress that NAND Flash suppliers (excluding Samsung) will make in their 3D-NAND migrations. Supply shortage worries have already caused some clients to engage in overbooking and double booking of orders. Based on DRAMeXchange’s analysis, tight supply for NAND Flash will persist as smartphone clients continue to stock up for components. Therefore, NAND Flash prices will continue to go up in the fourth quarter. The extent of the price increase will depend on the amount of inventories that module makers are willing to carry.
According to TrendForce, Memory Demand Stays good at the top making way for DRAM Contract Prices to Rise Over 10% Sequentially in Fourth Quarter.