Contract prices for mobile DRAM memory are set to register another sequential drop of 10-15% in the third quarter of 2019, and will continue trending downward in the fourth quarter, according to DRAMeXchange.

The price falls are expected to decelerate in the fourth quarter, nevertheless, said DRAMeXchange.

Disappointing smartphone sales continue to drag down the overall mobile DRAM demand. The global smartphone unit production is forecast to decline nearly 5% in 2019, DRAMeXchange indicated.

Chipmakers remain under pressure to clear inventory, despite the impact of Japan's export curbs on some key semiconductor materials to Korea, DRAMeXchange noted. Several players have decided to scale down their output, but the actual scale of their output cutback appears to be insignificant, DRAMeXchange said.

"Until mainstream products become unprofitable, DRAM suppliers are unlikely to make large reductions to capacity. And though prices in spot markets have seen slight fluctuations, contract prices remain on a downwards trend overall," DRAMeXchange said in its statement.

Mobile DRAM contract prices for the third quarter were finalized in the latter half of July, DRAMeXchange said. "As suppliers generally possess higher inventory levels, there will still be quite a drop in contract prices, with declines for both discrete and eMCP/uMCP product prices mostly falling between 10-15%," the price tracker indicated.

DRAMeXchange also believes that the impact of Japan-Korea trade tensions will be "limited" on suppliers' mobile DRAM deliveries, as price negotiations for the third quarter have been set to show suppliers' shipment commitments.

Falling mobile DRAM ASPs will help boost the memory content per box for smartphones, which will consume more chips and allow chipmakers to clear out inventory at a rapid pace, DRAMeXchange said. Meanwhile, brand vendors are looking to introduce their new models in January 2020 and will step up their pace of orders later this year. As a result, mobile DRAM prices are expected to drop at a slower pace in the fourth quarter.

In addition, the mainstream LPDDR4 memory will expand further its share of the overall mobile DRAM demand to 75% in 2019, while the next-generation LPDDR5 will start being feature in smartphone vendors' flagship models next year, according to DRAMeXchange.

By: DocMemory
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