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【Market View】Growing Smartphone Demand Momentum Stabilizes 2Q14 Mobile DRAM Contract Price: TrendForce

Published Apr.22 2014,21:30 PM (GMT+8)

Growing Smartphone Demand Momentum Stabilizes 2Q14 Mobile DRAM Contract Price: TrendForce

Global smartphone shipments reached 266.9 million units in 1Q14, due to the strong TD-LTE shipments from China. “At present, the market’s demand momentum is expected to persist into 2Q14 and help smartphone shipments grow by 6.7% QoQ,” said Avril Wu, Assistant Vice President and Analyst at DRAMeXchange, a research division of TrendForce. “Assuming that there are no significant shortages for key components, the supplies of Mobile DRAM are likely to remain tight in the short term.”

With 2Q14 serving as a critical period for the LPDDR2-to-LPDDR3 transition, the Mobile DRAM market’s supply and demand, along with its prices, are relatively susceptible to being disrupted. Chip prices are vulnerable to price fluctuations following discrepancies in manufacturer’s production capacity and adoption plans. Another factor is the upcoming global smartphone peak season, which TrendForce noted would result in slight price upticks in Mobile DRAM contract prices before the end of 3Q14.

Looking at the Mobile DRAM product lines, contract prices for high density LPDDR3 (16GB) showed more obvious decline among Discrete memory products. This is partially attributable to the low proportion of LPDDR3 adopted in high-end smartphones and tablets, a trend which justifies its contract price adjustments. What’s particularly worth noting about LPDDR3, also is the apparent price difference among models featuring different clock speeds. The prices for the 1866/1600/1333MHz LPDDR3 models (16GB), for example, can differ by as much as $US2. For the contract prices of the 8GB LPDDR2 and LPDDR3, the price difference in 2Q14 is expected to be roughly 13.3% (LPDDR2 US$7.5; LPDDR3 US$8.5). A potential price balance is expected to occur in 3Q14 following the increase in LPDDR3 production.

Regarding MCP and eMCP, the products' contract prices have recently shown signs of stabilizing after the price drops came to a halt. Given the tendency of the industry's two Korean DRAM manufacturers to make necessary pricing adjustments only when facing major clients, the prices of mainstream densities such as MCP LPDDR2 4+4 and eMCP 4+8 were mostly unchanged. Regarding the upcoming periods, as the arrival of the NAND Flash peak season is expected to limit price drops for NAND Flash products, prevent MCP/eMCP product costs from sliding, and stimulate market demand, prices for the entire third quarter can be expected to remain steady.