The traditional smartphone peak season is set to increase mobile DRAM prices according to DRAMeXchange, a research division of TrendForce. Additionally, China's rising TD-LTE market is also enabling growth momentum for smartphone shipments and upgraded smartphone specs, noted the market analyst.

For 2Q14, smartphone shipments are projected to grow 5.2 per cent compared to the previous quarter. The quarterly shipment growth for Chinese brand handsets is expected to exceed 10 per cent, higher than market average. Under soaring market demands, mobile DRAM supplies are expected to face shortages, price upticks might occur in certain products in Q2. Looking at 2014, DRAMeXchange believes that PC DRAM growth will be revised downwards by about 5-10 per cent on a quarterly basis, and expects average selling price (ASP) for mobile DRAM to remain flat. Assuming the shipments for mobile DRAM continue to expand, DRAM manufacturers should have no problem maintaining steady profits this year.

Mobile DRAM has officially replaced PC DRAM as the highest volume DRAM product on the market during 2H13, according to Avril Wu, assistant VP of DRAMeXchange. By 3Q14, LPDDR3 is expected to officially take LPDDR2's place as the main mobile DRAM in the industry. Given that the migration towards the former is progressing much faster than anticipated, an increasing number of smartphone manufacturers, particularly those relying heavily on LPDDR2, are already facing chip supply shortages. Non-first tier manufacturers that have weaker bargaining power are notably expected to have a difficult time obtaining future LPDDR2 supplies. The prices of LPDDR2 memory related products as a result are expected to increase further in the periods ahead. The market's oligopoly structure is becoming more obvious for Mobile DRAM than it is for PC DRAM, since there are limited options with only Samsung and SK Hynix offering eMCP/CI-MCP products, future price fluctuations will become increasingly noticeable.

Analysis of the three major market players indicated Samsung and the new Micron group have begun to use LPDDR3 for the majority of their mobile DRAM products. SK Hynix has the highest LPDDR2 output ratio out of the three major DRAM manufacturers, hence, it benefitted the most out of rising mobile DRAM prices. From a cost perspective, as profits generated by PC DRAM are still relatively higher than those earned from mobile DRAM, some adjustments need to be made, said Wu. The latter's lower profits in particular is unusual considering mobile DRAM is more difficult to manufacture than PC DRAM. A more reasonable development trend is for mobile DRAM's ASP to stay flat or undergo incremental increase. At the moment, LPDDR2's tightened supply situation is estimated to last for more than one quarter. Until more smartphone manufacturers begin utilising LPDDR3 in their latest models, it is estimated that the supply shortages will not ease until 3Q14.

By: DocMemory
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