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DRAM – Rising prices and falling shipments, says TrendForce

May 15, 2020

The DRAM market has changed from falling prices and rising shipment to rising prices and falling shipment, says TrendForce.

According to the latest investigations by the DRAMeXchange research division of TrendForce, DRAM suppliers were able to successfully reduce their inventories in 1Q20, with significantly lower inventory levels at the end of 1Q20 compared to the beginning of the year. Hence, suppliers are no longer under imminent pressure to slash prices, and overall DRAM ASP rose by about 0-5% QoQ. However, while governments responded to the COVID-19 pandemic by implementing citywide and nationwide lockdown policies, the resultant logistic disruptions in turn affected DRAM bit shipment as well. Therefore, in spite of the minor rise in ASP, global DRAM revenue decreased by 4.6% QoQ, reaching US$14.8 billion.

TrendForce indicates that the backlog of orders in 1Q20 will be deferred to 2Q20. In 2Q20, as the magnitude of QoQ increase in DRAM ASP expands, and bit shipment rebounds, TrendForce forecasts a QoQ increase of more than 20% in overall DRAM revenue. DRAM suppliers are projected to continue improving their revenue and profitability.

As the pandemic-related disruptions in the supply chain caused delays in bit shipment, and the market situation changed to a state of rising prices and declining shipments, the three dominant DRAM suppliers all experienced revenue contractions in 1Q20 of 3%, 4%, and about 11%, for Samsung, SK Hynix, and Micron, respectively (Micron’s 11% contraction refers to its fiscal 2Q20 revenue performance, from December 2019 to February 2020).

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