DRAM and NAND Flash prices are primed for an increase in the final quarter, with DRAM prices looking at a potential surge of 3-8%, as indicated by TrendForce. The sustainability of this rising trend will largely depend on how determined suppliers are to implement production reductions and the actual rejuvenation in demand, especially in the generic server market.
The pricing of DDR5, which already saw an uptick in the third quarter, is predicted to keep climbing, driven largely by the accumulation of new CPU models. Even though manufacturers possess significant inventories and there’s no pressing shortage, Samsung has felt the pressure to further cut down its production. Many manufacturers, facing reduced profits on DRAM products, are hesitant to cut prices further. Instead, they’re advocating for substantial price increases. This sentiment is likely to lead to an anticipated rise in DDR4 prices by up to 5% and DDR5 by around 3-8% in the next quarter.
TrendForce has observed that the inventory for DDR5 has jumped, but its actual utilisation in servers during Q3 has been slower than anticipated. Samsung’s aggressive cutbacks in production have impacted DDR4 wafer inputs, resulting in a tighter supply for server DDR4 stocks. Manufacturers, in their pursuit of greater profits, are boosting DDR5 production. The final quarter is predicted to see stable DDR4 prices and a descending trend for DDR5. Given the increasing DDR5 shipments and its significant price difference from DDR4, the blended average selling price is expected to climb.
Mobile DRAM inventories have returned to satisfactory levels quicker than most sectors. While smartphone production for Q4 hasn’t matched last year’s statistics, a seasonal growth of over 10% keeps mobile DRAM demand robust. However, manufacturers still face the challenge of high inventories and are yet to tackle the oversupply situation. Despite this, they are determined to escalate prices. With LPDDR5(X) being in limited supply, its prices are likely to surge more than other DRAM types.
The niche market’s acceptance of the price hikes means there will be continued buying of mainstream GDDR6 16Gb chips, with anticipated price surges in 2024. The success of gaming notebooks and the introduction of NVIDIA’s latest Server GPU has relieved some of the inventory pressure for graphics DRAM, potentially leading to a 3-8% increase in its contract prices for the next quarter.
Samsung’s production cuts for consumer DRAM, aimed at reducing older inventory stocks, could reach 30% by Q4. This step is prompting manufacturers to raise consumer DRAM contract prices. Nevertheless, demand seems tepid, and stocking actions haven’t been as vigorous as expected. This indicates that the fourth quarter may see a consumer DRAM contract price increase of 3–8%, slightly below initial projections.
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