Previously, TrendForce analysts estimated a 2 percent quarter-over-quarter drop in the contract prices of DRAM in Q4 2018. Now they foresee a larger price decline for DRAM, as well as a steeper decline for NAND flash memory.
Overall a mixed bag of news for consumers. Lower DRAM pricing and NAND pricing is very welcome after the big price hikes in recent history, but CPU/chipset availability issues and thus higher pricing are the flip side of the coin here.
TrendForce has adjusted its 2018 global notebook shipments projection downwards due to the worsening shortage of Intel CPUs. Intel originally planned to begin mass production of CPUs based on its latest Whiskey Lake platform in 3Q18, when the notebook market would be in the busy sales season. However, PC-OEMs are now finding an insufficient supply of Whiskey Lake CPUs, which has disrupted vendors’ notebook shipment plans for this year’s second half. Therefore, TrendForce now estimates that this year’s total notebook shipments will drop by 0.2% YoY, and the CPU shortage may further impact the entire memory market as well.
The precise reason behind the shortage of Intel CPUs is currently unclear because the problem simultaneously affects the newly arrived CPU product lines and product lines that have been in the market for some time. The affected products include the improved version of 14nm++ and product lines based on the 14nm+ Coffee Lake platform, which has been in mass production for half a year and is one of the solutions for mainstream models in the notebook market. The lack of supply for existing CPU product lines is having a significant impact on the notebook market as a whole. TrendForce estimates that the CPU supply gap in the notebook market has increased from around 5% in August to 5-10% in September. There is a possibility that the supply gap may extend to over 10% in 4Q18, and the shortage is expected to be resolved rather later in 1H19.
DRAM prices to slide, with PC DRAM anticipating larger price decline due to the CPU shortage
TrendForce notes that the CPU shortage is expected to impact the entire memory market as well. DRAM prices are now approaching an inflection point after climbing for nine successive quarters. DRAMeXchange, a division of TrendForce, previously estimated that the contract prices of PC DRAM products will drop by around 2% QoQ in 4Q18 as the market gradually shifts into oversupply. However, it is now possible that the price decline will become larger due the shortage of Intel CPUs and lower demand for notebooks and PC DRAM in a row.
On the other hand, the impact of the CPU shortage may also expand to the NAND Flash market. The insufficient supply would cause PC OEMs’ lower expectations of notebooks demand in the upcoming busy season, thus affecting the demand for SSD in the second half of the year. Therefore, TrendForce expects the SSD price decline to be steeper in 4Q18 than in this quarter.
With regard to the server market, the migration from the Grantley to the Purley platform is currently taking place. According to TrendForce’s survey, a minority of server OEMs are experiencing longer lead time in the deliveries of Purley processors. This issue will be followed up because it will affect future server shipments if it becomes more widespread. Moreover, both the NAND Flash and DRAM markets are much more vulnerable to the falling demand from the server application than from the PC or notebook application. Therefore, downward corrections of demand for server memory products will cause a steeper drop in quotations of memory products as a whole.