Average contract prices for server DRAM chips have fallen 15% since the beginning of the third quarter, due to weak demand, according to DRAMeXchange.

Shipments of branded enterprise servers have decelerated and even dropped due to a weak global economy and currency rate fluctuations, DRAMeXchange indicated. These factors, together with lackluster demand for all types of DRAM, are driving down server DRAM prices.

Average contract prices for mainstream DDR4 RDIMM modules had already fallen 15% before the end of August, DRAMeXchange indicated. Furthermore, the lowest DDR4 RDIMM price will reach parity with DDR3 prices as early as the end of the third quarter.

"The ongoing price drop of DDR4 products has not only fueled platform-upgrade demand but also contributes to the recent, impressive revenue results of front-end chip suppliers," said DRAMeXchange analyst Angel Liou. "These are indications that the server DRAM market might start to recover at the end of third quarter."

"At the same time, suppliers have adjusted their product mixes to favor mobile and server DRAM as a response to the weak PC DRAM market," Liou continued. "By expanding their server DRAM capacities in face of falling PC DRAM prices, the suppliers will not be able to maintain server DRAM prices. On the whole, the decline in server DRAM prices will moderate, but the downward pressure remains."

In addition, 16/32GB modules will overtake 8/16GB ones as the mainstream in 2016, DRAMeXchange noted. With the increase in DRAM capacity per server unit, the annual demand bit growth for 2016 will be able to reach 30%, DRAMeXchange said.

Nevertheless, Intel will not launch its next-generation server platform codenamed Purley until 2017, and companies will be unable to introduce new-generation products. As a result, server DRAM prices are likely to continue their downward trend through the first half of 2016, DRAMeXchange said.

By: DocMemory
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