DRAM pricing may collapse up to 40 percent in second half of 2016

Pei Ing Lee, the president of Taiwanese DRAM maker Nanya Technology, said pricing of DRAM chips will likely fall significantly in the second half of this year as there's a lot of new DRAM capacity coming online on advanced nodes from Samsung, SK Hynix and Micron. Lee estimates pricing will likely drop 20-30 percent, and possibly up to 40 percent of the new capacity is ramped up quickly.

Lee stated that there will be price pressure in the second quarter of this year in the commodity DRAM market and Nanya expects the pressure to extend to other memory markets such for mobile devices, servers and consumer market applications. However, the company believes the amplitude of the drop will not be as extreme as was in the first quarter.

For the second half of the year, Lee expects demand for DRAM chips to be stronger than it was in the first half but market conditions are much less clear, with the key to pricing being how quickly Samsung, Hynix and Micron ramp up new capacity.