The DDR5 server memory price decline will narrow in 2023Q2
Significant changes are expected in the server platform landscape this year, with large-scale production of servers based on Intel’s Sapphire Rapids and AMD’s Genoa, both of which will support DDR5 Server DRAM. However, recent market reports suggest that DDR5 Server DRAM has encountered compatibility issues with PMICs, which DRAM manufacturers and PMIC companies are now addressing.
TrendForce anticipates two consequences from this development: firstly, only PMICs supplied by MPS (Monolithic Power Systems) are problem-free, so DRAM manufacturers will temporarily increase their reliance on MPS; secondly, original DDR5 Server DRAM production will remain on older processes, affecting supply to some extent. Consequently, the expected price decline for DDR5 Server DRAM in the second quarter is projected to narrow from the initial estimate of 15% to 20% to a revised 13% to 18%.
Although SK Hynix has gradually increased the production of 1α nm process memory, many buyers have only validated memory on the 1Y nm process. Presently, Samsung and SK Hynix primarily use the 1Y nm process for DDR5 Server DRAM, while Micron utilizes the 1Z nm process. It is anticipated that 1α nm and 1beta nm production will increase in the latter half of the year. TrendForce forecasts that 32GB DDR5 Server DRAM prices will hover between $80 and $90 from April to May, slightly higher than the first quarter’s $75. This price disparity has widened the gap between DDR5 and DDR4, with the latter experiencing a more substantial decline, approximately 18% to 23%.
The AI boom, exemplified by ChatGPT, has driven server shipments and increased demand for DDR5 Server DRAM, particularly the 128GB modules, to upgrade the ChatGPT 4.0 architecture. This, in turn, has elevated the prices of high-capacity DDR5 memory modules. However, overall, due to economic factors and PMIC issues, many customers have generally postponed purchasing new server platforms, and the impact on DDR4 and DDR5 prices will gradually emerge in the second and third quarters of this year.
