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Demand for servers could revive free fall DRAM prices

Friday, March 8, 2019

Demand for servers will play an important role in stopping DRAM memory prices from falling further in the second half of 2019, according to sources at Taiwan-based memory module makers.

The DRAM market will remain in an oversupply situation through the first half of second-quarter 2019, said the sources. Nevertheless, demand for servers is expected to start picking up between the end of the second quarter and the third quarter, which may also start lifting DRAM prices, the sources indicated.

DRAMeXchange in January warned of a larger-than-expected decrease in server DRAM contract prices for the first quarter of 2019. Inventory levels at major datacenter operators as well as OEMs have been piling up.

DRAMeXchange in its latest report expressed more caution about DRAM contract prices for the current first quarter. The price tracker expects a nearly 30% sequential fall in the contract prices compared to its previously-estimated 25% decrease.

Meanwhile, Taiwan-based DRAM chipmaker Nanya Technology and memory module house Adata Technology both saw their February revenues decrease.

Nanya has reported consolidated revenues fell 20.3% sequentially and 42.7% on year to a 31-month low of NT$3.395 billion (US$110.1 million) in February 2019. Consolidated sales for the first two months of 2019 totaled NT$7.65 billion, down 36.6% from a year earlier.

Nanya attributed its negative performance during February to the impact of US-China trade disputes on the demand side, coupled with the ongoing Intel CPU shortage. The DRAM chipmaker disclosed its bit shipments and ASPs declined 14-16% and 4-6%, respectively, on quarter.

Adata posted consolidated revenues of NT$2.045 billion for February 2019, down 2.35% sequentially and 0.8% on year. The company's cumulative 2019 revenues through February decreased nearly 12% from a year earlier to NT$4.14 billion.

Adata expects memory prices to start towards stability in the third quarter, when new consumer technology products hit store shelves. The memory module firm is positive about the market in the long term, citing growing demand for AI, IoT, 5G and automotive electronics applications.

By: DocMemory
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