The DRAM price decline is expected to expand to nearly 10% in 2022Q3
According to a recent TrendForce survey report, weak electronics demand in the third quarter of 2022 due to various unfavorable factors may affect the overall DRAM inventory. Overall DRAM prices are expected to fall by 3% to 8% in the third quarter of 2022, and some DRAM products used in PCs and smartphones may fall by more than 8%.
Although overall consumer demand weakened rapidly in the first half of 2022, DRAM makers still showed a tougher stance on prices and seldom made concessions, resulting in a further increase in inventory pressure. Faced with the uncertainty in the second half of 2022, some DRAM manufacturers have begun to loosen up and have begun to show their intention to cut prices, even in the server sector where demand is relatively stable. According to TrendForce, the actions of DRAM manufacturers have widened the quarter-on-quarter decline of DRAM price in the third quarter of 2022 from 3% to 8% to nearly 10%. If a price war is triggered, the decline could exceed 10%.
PC manufacturers are constantly lowering their forecasts for shipments. The average DRAM inventory level is about more than two months, which makes manufacturers have no urgent need to purchase. TrendForce revised the decline in PC DRAM prices to between 5% and 10% in light of factors such as increased supply, high DDR5 pricing affecting penetration, and DDR4 production unable to decline.
The current server DRAM inventory level is about 7 to 8 weeks, unless DRAM manufacturers provide more attractive offers, or if the purchase intention is limited. Server DRAM is the only valid sales route now, and DRAM vendors are willing to lower prices further, which extends the decline of server DRAM to 5% to 10% in the third quarter of 2022.
Given the polarized disparity between supply and demand, the pricing decline of mobile DRAM is forecast to expand to 8-13% this quarter. Demand for DRAM used in the graphics sector also weakened, and it also faced inventory pressure, so the decline was revised to 3% to 8%.