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New designs will boost DRAM usage and prices


Thursday, June 23, 2016

DRAM prices will become stable in 2017 as chipmakers implement supply controls, according to DRAMeXchange.

DRAM contract prices have fallen for 19 consecutive months due to sluggish end-market demand, said DRAMeXchange. Contract prices for DDR4 chips arrived at US$1.31 on average at the end of May, while prices for DDR3 chips came to just US$1.25. Suppliers are under "enormous cost pressure," DRAMeXchange indicated.

"End market demand will pick up in the third quarter, when the overall PC production volume reaches its peak and China-based smartphone brands continue to expand their production volumes as well," said Avril Wu, research director at DRAMeXchange. "At the same time, the market release of iPhone 7/7 Plus will also generate strong stock-up demand. Respectively equipped with 2GB and 3GB of memory, iPhone 7 and 7 Plus will effectively consume a large portion of the total DRAM capacity."

While demand is warming up, chipmakers continue to be cautious about building additional capacity. DRAMeXchange forecast that the overall DRAM supply bit growth for 2017 will come below 20%. DRAM prices are set to stop falling and stabilize in 2017, DRAMeXchange said.

DRAMeXchange also revised downward its DRAM supply bit growth outlook for 2016 to 23.1% from 25%. "The DRAM glut will start to moderate as suppliers are unlikely to expand their annual bit supply by 30~50% as before," DRAMeXchange indicated.

In addition, spot prices for 4Gb DDR3 chips started to rally on June 6 which have pushed up prices for 4Gb DDR4 chips, DRAMeXchange disclosed. As for contract prices, negotiations for the third quarter are still ongoing, but PC OEMs have expressed the intention of building inventory, DRAMeXchange said.

By: DocMemory
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