Researchers from TrendForce's DRAMeXchange predict DRAM revenue will hit a new high in Q3 2018. Higher demand is expected to result in higher pricing, although the growth will be moderated:
Since the end of 2Q18, major DRAM suppliers have been negotiating over the contract prices for Q3. Despite the fact that the bit output has been increasing quarter by quarter, the average selling prices of DRAM may still see a marginal rise in 3Q18 since the buyers are eager to stock up for the upcoming traditional peak season, says DRAMeXchange, a division of TrendForce.
“As suppliers migrate to 1X or 1Y nm process one after another, the DRAM bit output increased by 3.2% in 2Q18 QoQ although some issues remain regarding the yield rate and product quality”, says Avril Wu, senior research director of DRAMeXchange. On the demand front, the market will witness steady stock up demand as the safety stock levels have not been reached, resulting in the marginal rise in DRAM ASP QoQ.
Going forward to Q3 of the year, the share of 1X or 1Y nm process will continue to increase, and DRAMeXchange estimates the bit output growth at 4.8% in 3Q18. Driven by the peak season, DRAM ASP will see a marginal rise, resulting in a new high of global DRAM revenue in 3Q18.
Mainstream demand comes from high-end smartphones and data centers; graphics DRAM products to see slashed demand
From the perspective of applications, the DRAM price rise in Q3 is attributed to demand for server DRAM and mobile DRAM. DRAMeXchange points out that the demand for server DRAM will see steady growth in Q3, so the prices of mainstream server modules to be shipped to the first-tier firms may advance by 1-2% in Q3. Meanwhile, the price rise will be limited thanks to increased shipment fulfillment rates since Q1. Consequently, the quotes offered by first-tier and second-tier firms for Q3 contract prices will not be much different.
As for mobile DRAM, increasing adoption of high-density LPDDR4 in high-end Android smartphones has contributed to the ASP rise. The DRAM capacity of newly released smartphones has been improved to 6GB or even 8GB, leading to the tighter supply of both discrete LPDDR4 products and eMCP LPDDR4 products. In this situation, DRAMeXchange expects that the prices of mobile DRAM may increase by 1-2% in 3Q18.
On the other hand, previous growth momentum for graphics DRAM and consumer DRAM products may disappear completely due to declined demand for cryptocurrency mining. Particularly, after significant price rise in 1H18, graphics DRAM may see price decline in the second half.
DRAM prices may continue to grow in 2H18, yet the growth will be moderated
Overall speaking, the bit output growth brought by migration to 10 nm process is not as much as that in previous generations of technology process migration. However, as the suppliers adopt the new process successively, the bit output will still see continuous growth in the next few quarters. For the rest of year, DRAMeXchange notes that the price growth has been increasingly marginal despite the stable demand in the peak season. Consequently, DRAMeXchange expects that the price growth may be even flat in 4Q18.