Lower than expected demand for smartphones is putting the brakes on price increases for mobile DRAM in the first quarter of 2018 but it may not last. Contract prices for mobile DRAM are forecast to rise by only three percent in the first quarter of 2018, according to DRAMeXchange, a research division of TrendForce. However, a rollout of new Android flagship models in the second quarter is expected to keep prices stable or slightly up.

Major brands have adjusted their production plans and have deferred restocking of materials since the middle of the fourth quarter of 2017 as they faced rising DRAM prices and a squeeze on their profits, reported DRAMeXchange.

This resulted in excess inventory of key components, particularly those with long lead times and higher price tags, including mobile DRAM. In some cases, inventory has doubled, according to DRAMeXchange.

During the traditional slow season in the first quarter, smartphone vendors are expected to lower their demand, cutting mobile DRAM price increases to only three percent, down from an initial forecast of five percent. Another contributing factor is the price drop of NAND flash.

“The weakened demand has led to long time negotiation between component suppliers and buyers,” said DRAMeXchange. “The contract prices may not be finalized until the end of January.”

However, demand is expected to pick-up in the second quarter thanks to the rollout of Android phones that is expected to put a strain on supply. But lower NAND flash prices coupled with suppliers pushing eMCP with high-density NAND flash will likely keep contract prices stable or slightly higher.

By: DocMemory
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