TrendForce released a report today, as some suppliers such as Micron and SK Hynix have started DRAM production reduction, compared to the first quarter DRAM average price drop of nearly 20%, the decline is expected to converge to 10-15% in the second quarter. However, as the demand recovery in the second half of 2023 is still unclear, the downward cycle of DRAM average price has not yet been terminated. With the current high inventory level of the original manufacturers, unless there is a larger scale production reduction, the subsequent contract price may reverse.
The report as follows:
PC DRAM, as the buyer has been three consecutive quarters of large reductions in procurement volume, the current buyer’s PC DRAM inventory of about 9 ~ 13 weeks, while the PC DRAM original factory has carried out production cuts, TrendForce Tibco predicts that the second quarter mainstream DDR4 8GB module will still fall by more than 10%, but perhaps some PC OEMs based on the consideration of the price has been low, there is a willingness to enhance the DRAM However, it remains to be seen whether the high inventory pressure on the supply side can be alleviated, and it is estimated that the average price of PC DRAM will drop by about 10-15% in the second quarter.
As for Server DRAM, OEMs and cloud service providers have lowered server demand, further leading to weak buyer pulling power. However, the uncertainty in the consumer market has caused the original manufacturers to continue to increase the proportion of Server DRAM production, so the inventory accumulated quarter by quarter has become a burden, although the original manufacturers have generally reduced capacity utilization, but the effect of this move on the price to stop the decline is not much, the average price of Server DRAM is estimated to fall 13~18% in Q2.
For Mobile DRAM, although the inventory of smartphone brands has returned to a relatively healthy level, they are still conservative in their production plans, so the buyer’s demand for Mobile DRAM remains weak in Q2. However, the high inventory has put the original manufacturers under great selling pressure. Even though the original manufacturers have reduced the production of Mobile DRAM, it is still difficult to change the current oversupply situation, and it is estimated that the average price of Mobile DRAM will continue to fall in the second quarter, but the decline is expected to converge to 10~15%.
In terms of Graphics DRAM, buyers are conservative in their stocking attitude, and the recent AI issue has not significantly stimulated demand growth. In terms of mainstream GDDR6 16Gb, the average price of Graphics DRAM is expected to drop by 10-15% in the second quarter due to the generally conservative purchasing power. It is worth noting that at this stage, the supply side is in the middle of the 8Gb to 16Gb switch, Samsung will end the GDDR6 8Gb product life cycle at the end of this year, and only SK Hynix will be left to supply from 2024.
In terms of Consumer DRAM, the demand is relatively stable in the Netcom sector, with orders delivered one after another, the industry is gradually slowing down the pulling force, and generally conservative view of the growth of Netcom-related demand this year, including TV applications are unable to effectively support the Consumer DRAM market demand. Although the original manufacturers have been taking production cuts in response, but the market is still oversupplied, prices will continue to fall, it is estimated that the average price of Consumer DRAM in the second quarter will fall 10 ~ 15% from the previous year.
