DRAM prices are expected to show a downward trend in 2022

According to TrendForce’s latest survey report, after three consecutive quarters of increases, DRAM contract prices will show a downward trend in the fourth quarter of 2021, down 3% to 8% from the previous quarter. This decline is not only a reduction in the purchase of future DRAM buyers but also one of the reasons why the DRAM spot price is lower than the contract price.

Buyers and sellers are still in the game. The price trend of the DRAM market in 2022 will mainly depend on the supplier’s production capacity and potential growth demand. However, the three major DRAM suppliers (Samsung, SK Hynix, and Micron) have adopted conservative strategies in their capacity expansion plans in 2022. The bit supply growth rate is expected to be about 17.9% next year, but the inventory level is now relatively high. Therefore, the demand bit growth rate in 2022 is only 16.3%, which is lower than the supply side. In 2022, the DRAM industry will change from short supply to oversupply.

Smartphones, servers, and laptops constitute the three major sources of DRAM consumption, and they will all see substantial growth in 2021. This indicates that next year’s data benchmark value is relatively high, and substantial year-on-year growth is unlikely to occur in 2022. At the same time, due to the relatively high DRAM inventory level of OEM/ODM, but the continued shortage of components, this will affect and limit equipment assembly, resulting in a decline in the demand for DRAM. This is similar to what Nanya Technology said in its 2021Q3 financial report.

In 2021, the DRAM industry is growing both in terms of shipments and prices, and the total revenue is expected to exceed $90 billion. Since the fourth quarter of 2021 began to decline, especially in the first half of 2022, the decline will accelerate. As a result, even if shipments increase in 2022, it may only offset the decline in prices, total DRAM revenue in 2022 is expected to be similar to 2021.