TrendForce Reports DRAM Contract Price Down to US$18.5 in September
The latest price report by DRAMeXchange, a division of TrendForce, shows that the average contract price of DDR3 4GB fell 3% from US$19 in August to US$18.5 in September. According to DRAMeXchange Assistant Vice President Avril Wu, first-tier DRAM suppliers attempted to hold the price around US$20~21 in August, when the inventory level in the spot market was low. Furthermore, there had been a surge of stock-up demand in China ahead of the country’s 70th anniversary of Victory Day in anticipation of the tightening of custom procedures for imports during the observation period. This demand surge had even caused the spot market to have an 8% price hike at one point. All these factors sustained the impression that DRAM chip prices had bottom out when it was not the case, and the market returned to its downtrend in September.
Wu said: “Notebook shipments in the third quarter fall short of what is expected for a traditional peak season mainly because Windows 10 with its free upgrade plan negatively impacted replaced sales of notebooks to some extent rather than driving the demand for these products. Furthermore, projected shipments of smartphones and servers have been marked down, and this has seriously eroded the margins of DRAM suppliers. If the global economy continues to stagnate, the end market will not generate the demand needed to effectively consume the new DRAM chips produced on the advanced processes. Looking ahead to the first half of 2016, DRAMeXchange expects price decline in the DRAM chip market to become more severe than the current slide.”
Dominant suppliers turn up the heat in the DRAM market as they prepare their 18nm processes for next year’s production
Competition remains heated in the DRAM industry even as it is now taken over by three dominant suppliers – Samsung, SK Hynix and Micron. As these top suppliers advance their manufacturing processes to under 20nm, their first objective is to produce on the 18nm technology. Using the 18nm technology will increase the output by at least 20% over the 20nm technology since smaller chips allow for higher density and more power-efficient design in memory products.
Looking to maintain its technological lead, Samsung plans to start mass production on its 18nm process next year, thereby putting pressure on its trailing competitors. SK Hynix, on the other hand, has announced that its production will gradually transition on to its 21nm process by the end of this year. While SK Hynix still working on its 18nm technology, the supplier might achieve a breakthrough and have the technology ready for mass production in 2016. Since U.S.-based Micron took over Japanese memory maker Elpida, the supplier has taken a lot time integrating its acquisition into its organization. This has caused the supplier to fall behind its South Korean rivals technologically by six months or more. Micron’s fab in Hiroshima, Japan, is mainly producing on the 25nm technology, while its supply partner Inotera’s produces mainly on the 30nm. Micron is also developing its 18nm production at its Hiroshima fab, but the supplier has not set a date for mass production.
DRAMeXchange is a global primary provider of future intelligences, in-depth analysis reports and advisory services on DRAM and Flash memory industry with coverage including current business, spot trading prices, and market trends, capital spending and wafer capacity trends, the impact of DRAM/flash memory products on the market, and other relevant PC industry information.
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