DRAM ASP Decline Shrinks in Q3, Due to Seasonal Demand – EE Times Asia

According to TrendForce, the overall DRAM supply is gradually declining quarter by quarter due to continued production cuts by DRAM suppliers. Seasonal demand, on the other hand, has helped reduce inventory pressure on suppliers.

In line with this trend, TrendForce expects DRAM Average Selling Price (ASP) to converge to a 0-5% decline in the third quarter. Inventory levels remain high and prices remain low despite concerted efforts by suppliers. Production cuts may help contain quarterly price declines, but a visible price recovery may not be seen until 2024.

PC-DRAM

The benefits of DDR4 consolidation production reductions by the top three suppliers are expected to become apparent in the third quarter. In addition, several OEMs aggressively purchased at lower prices during the second quarter (Q2 2023), partially easing inventory pressure on suppliers.

An assessment of the average price trend of PC DRAM products in Q3 2023 shows that DDR4 will continue to be in oversupply, with price declines of 3-8% expected in the quarter. DDR5 prices are projected to fall 0-5% in the quarter, driven by supplier pricing efforts and unmet buyer demand. Overall ASP for PC DRAM is expected to decline 0-5% quarter-over-quarter (QoQ) in the third quarter.

Server DRAM

Buyer inventories remain high and migration to new platforms has fallen short of expectations. Recently, CSPs have focused their investment on AI server equipment, accelerating the procurement of high-capacity server DRAM such as DDR5 128G and HBM, but the inventory of server DRAM has not decreased significantly.

DDR4 and DDR5 price declines are about 3-8% and 0-5%, respectively, indicating the continued downward trend in prices of server DRAM products. As a result, the average price of server DRAM is projected to drop about 0-5% in Q3 2023.

Mobile DRAM

Although demand for smartphones has been sluggish in the first half of 2023, demand for mobile DRAM is expected to rise due to the traditional busy season and simultaneous production cuts by suppliers. However, these measures offer only limited assistance in significantly reducing supplier inventory levels.

After successive quarters of price drops, Korean companies are leading the rise in mobile DRAM prices, now reaching supplier benchmark prices. But oversupply is rampant, creating conflicts between buyers and sellers. Mobile DRAM ASP is expected to decline by 0-5% in Q3 2023, but strategic moves by suppliers may result in sporadic price increases.

Graphics DRAM

The NVIDIA RTX 40 series is expected to see a significant increase in demand for graphics DRAM (especially GDDR6 16Gb) in Q3 on top of the traditional peak season. However, given that buyers have pre-stocked inventory in Q2 and are now holding large amounts of inventory, suppliers may not be able to raise prices in a market that continues to be oversupplied.

Therefore, the market price of mainstream GDDR6 16Gb is projected to decline by 0-5% quarter-on-quarter in Q3, reflecting a roughly 0-5% drop in ASP for graphics DRAM.

Consumer DRAM

Currently, the pace of trading has slowed in the market. SK hynix plans to expand the supply of DDR3 and DDR4 4Gb at its Wuxi factory and gradually expand production capacity. At the same time, Winbond is moving into volume production and expects an increase in wafer input on a quarterly basis. As a result, the consumer DRAM market continues to suffer from oversupply.

Nevertheless, suppliers are gradually reducing production and the effects are expected to materialize in the third quarter. Given that these suppliers have suffered significant operating losses, these factors should limit the decline in consumer DRAM ASP to 0-5% in Q3 2023.