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Average DRAM Price is Expected to Stabilize in Q1 2021



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According to Trend Force's Semiconductor Research Office, in the DRAM field, including PC DRAM, Server DRAM, Mobile DRAM, Graphics DRAM, and Consumer DRAM, after more than two quarters of inventory corrections, buyers are expected to start increasing inventory levels in the first quarter of 2021. In response, the overall average selling price of DRAM will stabilize, and may even rise slightly...

DRAM

The Semiconductor Research Office of Trend Force, a market research organization, said that it includes PC DRAM (13% of the total number of bits supplied), Server DRAM (34%), Mobile DRAM (40%), Graphics DRAM (5%) and Consumer DRAM (8 In the DRAM field including %), because the overall market is oligopolistic, the momentum of supply and demand is significantly healthier than that of NAND Flash. After more than two seasons of inventory corrections, in order to slow down the cost increase caused by expected subsequent price increases, in the first quarter of 2021, it is expected that buyers will begin to increase the inventory level to respond, so that prices will be supported. Therefore, the overall average sales price of DRAM will stabilize, and may even rise slightly.

In terms of PC DRAM, from the perspective of demand, the production of notebook computers in the first quarter of 2021 is estimated to be approximately 52.7 million, except for the traditional off-season effect and the reduction in the number of working days during the Chinese New Year, and the base period for the fourth quarter of 2020 On the high side. Therefore, the estimated quarterly reduction is about 9%. However, most of the PC OEM brand manufacturers benefited from the robust notebook shipments this year (a 20% annual growth), and the PC DRAM inventory level is only 4 to 5 weeks. Therefore, it is estimated that manufacturers' intention to increase inventory in the short term will continue to boost demand momentum.

From the perspective of supply, the overall supply bit growth of the three major DRAM makers Samsung, SK Hynix, and Micron has not increased significantly in the past two quarters. In addition, benefiting from the booming momentum of mobile DRAM, various factories have planned to continue to shift their production capacity to this area from the end of the third quarter, resulting in PC and server DRAM capacity being crowded out. Therefore, in the first quarter of 2021, the demand is strong and the supply does not increase significantly, the average price of PC DRAM is not easy to fall.

In terms of server DRAM, from the perspective of demand, the first quarter of each year is the off-season cycle of brand manufacturers, and the purchasing power of server DRAM in the first quarter of each year is generally lower than that of the whole year. However, it is only necessary to pay attention to the data center's early replenishment orders on the eve of the upcoming DRAM price increase.

DRAM Price Prediction Table

 

From the perspective of supply, the three original DRAM manufacturers have recently been affected by the recovery of mobile DRAM purchase momentum. Since September 2020, they have gradually transferred server DRAM production capacity to mobile DRAM, which is similar to the supply situation of PC DRAM. Under the effect of capacity crowding, 2021 Server DRAM supply bit growth was very limited in the first quarter of this year.

Overall, Trend Force believes that factors such as lower prices and tighter production capacity have led to a significant increase in the market’s consensus on early stocking. Looking forward to 2021, although the first quarter of each year is the off-season cycle for brand factory shipments, under the influence of anticipatory psychology on the eve of the price reversal and the Micron jump event, buyers will be stimulated to make up orders in advance.

At this stage, as the market has recently led the rise by some product lines, and with the booming demand for mobile DRAM and PC DRAM, the downward price range of server DRAM has the opportunity to end early, and the price will officially increase in the first quarter of next year.

In terms of mobile DRAM, from the demand side, the market will continue to be affected by Huawei's ban in the first quarter of 2021, and other brands that will benefit from it are expected to maintain an active production preparation model. Therefore, it is different from the past from the peak season to the off-season, which often tends to decline by more than 10%. It is expected that the total production in the first quarter of next year is expected to be close to 330 million, a seasonal decrease of 6%.

From the perspective of supply, as mentioned earlier, the three major DRAM manufacturers did not significantly increase their supply bit growth in the first quarter of next year. In addition, the demand for mobile DRAM in the fourth quarter of this year has not yet been delivered and has been delayed. Therefore, the supply in this field is still tight.

Overall, Trend Force predicts that the mobile DRAM contract price in the first quarter of next year will be roughly the same as the fourth quarter of this year. For brand factories with large demand, under the support of the previously agreed special deal and large demand, the price change will not be too large. In contrast to other small-scale brand factories, due to the crowding-out effect, coupled with factors such as small demand capacity and low original factory supply willingness, the contract price in the first quarter of next year does not rule out the possibility of a slight increase, which is within about 3%..

For Graphics DRAM, from the perspective of demand, new graphics cards, new game consoles, and mining machines continue to play the three major supporting forces of graphics DRAM demand, driving graphics DRAM to become the first to increase prices among all DRAM products. Trend Force estimates that, driven by strong demand, the price of mainstream GDDR6 products will increase by about 5-10% in the first quarter of 2021.

From the supply side, the existing graphics DRAM OEMs mostly use the more mature 20nm or 1Xnm production. However, the improvement in demand for mobile DRAM, which also uses a large number of 1Xnm processes, has crowded out graphics DRAM production capacity. Even if this phenomenon enters the first quarter of next year, the original factory's delivery rate is still not good. Therefore, the price increase trend is very clear.

For Consumer DRAM, from the demand side, DDR3 is driven by TVs, set-top boxes and Netcom related products, and the demand is gradually warming up, driving the demand for small-capacity (DDR3 1/2/4Gb and below) products to gradually increase. Many small and medium-sized customers who adopt short-term contracts have already faced price increases earlier, but first-line customers have remained roughly flat. From the supply side, SK Hynix has officially discontinued DDR3 2Gb production, and Samsung has gradually transferred the old DRAM process of Line 13 to CIS production. The price of DDR3 products has been the first to be lifted when Korean manufacturers have gradually reduced output.

The DDR4 category products are highly related to mainstream PC and server products, so the price performance is more consistent with the two, and they are not easy to fall.

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