Manufacturers’ production cuts and seasonal demand support DRAM prices
TrendForce has disseminated a fresh investigative report, revealing a contraction in the production of DRAM by suppliers, alongside a bolstering seasonal demand. This combination alleviates inventory pressure on suppliers, leading to an anticipated narrowing of the average price decline of DRAM in the third quarter of this year, with depreciation of less than 5%.
In terms of PC DRAM, Samsung, SK Hynix, and Micron have concentrated efforts on diminishing DDR4 memory production, the impacts of which are likely to materialize in this year’s third quarter. Concurrently, an abundance of OEM manufacturers employed low-cost strategies to extensively procure goods in the second quarter, accelerating the deceleration of the original manufacturer’s inventory. On the whole, the supply of DDR4 memory in the third quarter will still exceed demand, with an anticipated price drop of 3% to 8% quarter-on-quarter. Original manufacturers are inclined to stabilize DDR5 memory prices, which may not fully satisfy buyer demand, predicting a sequential decline of less than 5%. The overall average price of PC DRAM is expected to fall by 0% to 5% quarter-on-quarter.
Regarding Server DRAM, buyer inventory remains high, and the transition to new platforms is not as rapid as anticipated. Although recent investment in AI servers has become an industry highlight, and the sales of high-capacity DDR5 server memory like 128GB and HBM-type products have increased, there hasn’t been a substantive reduction in Server DRAM inventory. Thus, the estimated price drops for DDR4 and DDR5 products are between 3% to 8% and 0% to 5% respectively. Overall, the price trend for Server DRAM continues to languish, with an expected average price drop between 0% to 5% in the third quarter.
For Mobile DRAM, although the traditional peak season is expected to stimulate demand, its effect on reducing inventory remains limited. Furthermore, original manufacturers’ reduced production and successive months of decline have caused prices to bottom out, leaving virtually no room for further drops. Consequently, the average price drop of Mobile DRAM in the third quarter is projected to be between 10% and 15%. As for Graphics DRAM, demand is driven by NVIDIA’s GeForce RTX 40 series, coupled with peak season effects. As buyers have adequately stocked up, the market is predominantly oversupplied, resulting in an expected average price drop between 0% and 5% in the third quarter. For Consumer DRAM, market transactions are lackluster, with supply continuing to exceed demand. The estimated average price drop in the third quarter is between 0% to 5%.