Monday, June 20th 2022

Memory Prices Going Down by Up to 8% in this Quarter, Says TrendForce

According to TrendForce research, despite the significance of peak season and rising DDR5 penetration, the 3Q22 DRAM market still succumbed to the negative impact of weak consumer electronics demand resulting from the Russian-Ukrainian war and high inflation, which in turn led to an increase in overall DRAM inventory. This is the primary reason for a 3-8% drop in DRAM prices in 3Q22 and a more than 8% pricing dip in certain DRAM products for PCs and smart phones cannot be ruled out.

In terms of PC DRAM, sustained weakening of demand has led to PC OEMs adjusting their annual shipment targets and also caused DRAM inventories to soar rapidly. In 3Q22, PC OEMs remain focused on adjusting and destocking DRAM inventories, making a rebound in purchasing momentum unlikely. At the same time, since the overall DRAM industry remains oversupplied, even if PC demand is sluggish, suppliers still experienced difficulties in reducing their PC DRAM supply, resulting in a slight quarterly increase in the number of supplied bits. Therefore, PC DRAM pricing is forecast to drop by 3~8%
In terms of server DRAM, current client inventory levels of 7-8 weeks is slightly high, and though direct sales is currently the server field's primary distribution channel, clients' bit demand is still not enough to fully consume the bit output derived from increased wafer input and process advancement. In addition, demand for consumer PC DRAM and mobile DRAM is uncertain in 2H22, forcing suppliers to transfer production capacity to server DRAM. As a result, suppliers have to adopt certain sales strategies such as two quarter price binding or increasing on hand inventory to suppress price declines. Server DRAM is forecast to drop by another 0~5% in 3Q22.

In terms of Mobile DRAM, as sales in the consumer market fail to meet expectations, suppliers are forced to incrementally reduce the proportion of mobile DRAM production quarter by quarter and switch to server DRAM, thereby stabilizing market inventory and prices. However, the supply of mobile DRAM bits did not drop significantly due to the increased manufacturing. In addition, average memory installed per machine failed to increase significantly, resulting in continued oversupply and expanding price decline to 3~8% compared to 2Q22. TrendForce also indicates, bit shipments were limited due to sluggish demand for smartphones in 2Q22 and the urgency of smartphone brands to deplete inventory. Under pressure from both revenue and inventory, pricing will see greater flexibility and suppliers will strive to negotiate pricing on some orders before the end of June to alleviate their inventory concerns.

In terms of Graphics DRAM, as buyers face increasing inventory and uncertain subsequent demand from distributors, the market's stocking momentum has become weak. Although Micron only retained a sporadic supply of GDDR6 8Gb in 3Q22, the current graphics DRAM supply is secure due to increased production volume from Korean manufacturers and the weakening of demand, which caused prices to drop marginally by 0~5% in 3Q22. TrendForce believes that weak demand is a key inhibitor of rising graphics DRAM pricing this quarter. However, if suppliers see that a price drop in 3Q22 will not stimulate demand, they will try to keep prices as flat as possible.

In terms of consumer DRAM, the purchasing of consumer electronics has been adversely affected by factors such as the Russian-Ukrainian war, China's pandemic lockdowns, and rising inflation. Consumer DRAM-related applications such as notebook and TV shipments are facing downward revision. In addition, since DDR3 is at a relatively high point, pressured by inventory and cost, buyers' purchasing power has obviously weakened. Demand for DDR3 and DDR4 is forecast to decline simultaneously and market stocking momentum will continue to weaken. Korean manufacturers' plans to withdraw from DDR3 supply remains unchanged but, in 2H22, Chinese and Taiwanese companies will continue to create new production capacity. With weaker demand and increased supply, sellers lose their bargaining advantage, making consumer DRAM prices difficult to support in 3Q22. DDR3 and DDR4 prices are forecast to drop by 3-8% QoQ.
Source: TrendForce
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10 Comments on Memory Prices Going Down by Up to 8% in this Quarter, Says TrendForce

#1
ExcuseMeWtf
"Quick, set a factory on fire" some CEO, probably.
Posted on Reply
#2
Chomiq
Orly?


Next disaster might just be around the corner.
Posted on Reply
#3
Bomby569
8% is a rounding error on DDR5 prices.
Shouldn't DDR4 start to go up now, when they begin to shift production to DDR5?
Posted on Reply
#4
Vayra86
ExcuseMeWtf"Quick, set a factory on fire" some CEO, probably.
Inflation is already like burning money, so I'm not so sure, this time around.

The bottom line is people have less to spend, as do companies, so the only way to sell as much as you did, is by lowering prices. And that means cutting into profit margins. Or firing people and making 'less' of everything, but I doubt that's something to prefer in a market where people / workforce are becoming a much more valuable asset every day.

Patience, as always, is key.
Posted on Reply
#5
TheLostSwede
Bomby5698% is a rounding error on DDR5 prices.
Shouldn't DDR4 start to go up now, when they begin to shift production to DDR5?
This is not retail pricing though, this is what the DRAM chips cost, before it's made into a DIMM.
8% per chip adds up to quite a bit once you go from chips to a retail product.
Vayra86Or firing people and making 'less' of everything, but I doubt that's something to prefer in a market where people / workforce are becoming a much more valuable asset every day.
It's already happening.
Posted on Reply
#6
bonehead123
Vayra86And that means cutting into profit margins
Oh no, no, no..... cause that would mean that 211.43 fewer execs would be able to buy their new lear jets/yatchs/beachfront villas this year, and we CERTAINLY can't have that happen, now can we, hehehehe ?

And as anyone who has been in the business world knows, controlling and/or reducing labor costs is almost ALWAYS the very 1st step most companies take to keep the moolah supply at or above the expected levels...

But seriously though, essentially what this forecast is saying is that memory costs are (finally) starting to drop back to near pre-pandemic/pre-war/consumer-gouging prices....and that all those greedy, money-grubbin supply-chain idiots made some serious miscalculations when attempting to forecast the supply/demand dynamics and will now suffer the rath of the above mentioned company execs for their mistakes......

Like I usually say with regards to these situations:

The greed..
The steed...
The need....
The creed.....
The deed.......
The weed........
The pleed.........

Only pick 2, cause moar than that & you will most certainly die :D
Posted on Reply
#7
thegnome
Reminds me of the OPEC countries nearly stopping production when prices get too low... And barely raising it despite the prices being overly high..
Posted on Reply
#8
ThrashZone
Hi,
Well most of the ddr5 so far has really been overpriced crap

Once the cl x 2 = is 6+ LESS than the first two numbers of the rated speed let me know because now you'd be looking at the real shit to buy and we can squabble about how much it is then because it hasn't appeared yet that I've seen.
Posted on Reply
#9
ModEl4
Isn't the memory sector the most known regarding price fixing practices anyway?

For anyone interested in specific spot (quite indicative) & contract (not so indicative) memory prices:

www.dramexchange.com/
Posted on Reply
#10
Palladium
ExcuseMeWtf"Quick, set a factory on fire" some CEO, probably.
Funny how that doesn't happen anymore after China had their domestically owned RAM mass production up.

What a coincidence!
Posted on Reply
Jun 28th, 2022 21:09 EDT change timezone

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