DRAM Contract Prices to Rise in Q4 with Estimated 3-8% Quarterly Increase

October 13, 2023 by our News Team

DRAM and NAND Flash markets are expected to experience a quarterly surge of 3-8% in the fourth quarter, with PC DRAM, server DRAM, mobile DRAM, graphics DRAM, and consumer DRAM all projected to increase in price.

  • DRAM prices are projected to experience a quarterly surge of approximately 3-8%
  • PC DRAM segment prices are expected to continue their upward trajectory due to the stocking of new CPU models
  • Consumer DRAM contract prices are expected to increase by more than 10%

According to TrendForce reports, there is a notable trend of price increases in the DRAM and NAND Flash markets expected to begin in the fourth quarter. The prices of DRAM, in particular, are projected to experience a quarterly surge of approximately 3-8%. The sustainability of this upward momentum will depend on the suppliers’ commitment to production cuts and the level of resurgence in actual demand, with the general-purpose server market playing a crucial role.

In the PC DRAM segment, DDR5 prices have already witnessed a surge in the third quarter and are expected to continue their upward trajectory due to the stocking of new CPU models. This price hike cycle for both DDR4 and DDR5 is incentivizing PC original equipment manufacturers (OEMs) to proceed with their purchases. While manufacturers still have substantial inventory and there is no immediate shortage, Samsung has been compelled to further reduce its production. However, most manufacturers are resistant to further price reductions due to negative gross margins on DRAM products, instead pushing for aggressive price increases. As a result, DDR4 prices are anticipated to rise by 0-5% and DDR5 prices by around 3-8% in the fourth quarter. Overall, as DDR5 adoption accelerates, a quarterly increase of approximately 3-8% is projected for PC DRAM contract prices during this period.

In the server DRAM segment, buyer inventory of DDR5 has increased from 20% in Q2 to 30-35% recently. However, only 15% of this inventory has been utilized in servers in Q3, indicating slower-than-expected market uptake. Meanwhile, Samsung’s intensified production cutbacks have significantly reduced DDR4 wafer inputs, leading to a supply crunch in server DDR4 stocks. Consequently, there is no room for further server DDR4 price reductions. In response, manufacturers are ramping up DDR5 output to enhance profits. Looking ahead, Q4 forecasts suggest stable server DDR4 average prices, while server DDR5 prices are expected to continue declining. With the rising shipments of DDR5 and a notable 50-60% price disparity with DDR4, the blended average selling price (ASP) for the range is poised for an upswing. This indicates an estimated 3-8% quarterly hike in Q4 server DRAM contract prices.

In the mobile DRAM segment, inventories have rebounded to healthy levels earlier than other sectors due to price elasticity driving an increase in per-device capacity. This has revitalized purchasing enthusiasm in the second half of 2023. Although Q4 smartphone production has not reached the levels of the previous year for the same period, a seasonal increase of over 10% is still supporting demand for mobile DRAM. However, it is important to note that current manufacturer inventories remain high, and production cuts have not yet alleviated the oversupply situation in the short term. Nevertheless, manufacturers, facing profit margin pressures, are determined to raise prices. For products with more abundant inventory, such as LPDDR4X or those from older manufacturing processes, the estimated contract price increase for the quarter will be around 3-8%. On the other hand, LPDDR5(X) appears to be in tighter supply, with projected contract price increases of 5-10%.

In the graphics DRAM market, a niche market dynamic and buyers’ acceptance of price hikes indicate sustained procurement of mainstream GDDR6 16Gb chips in preparation for expected price increases in 2024. The launch of nVidia’s new Server GPU L40s in the third quarter has facilitated the depletion of existing manufacturer inventories. Additionally, gaming notebooks have outperformed the general notebook market this year, resulting in less inventory stress for graphics DRAM manufacturers compared to commodity DRAM manufacturers. This scenario sets the stage for an anticipated 3-8% hike in graphics DRAM contract prices for the fourth quarter.

In the consumer DRAM segment, Samsung has implemented significant production reductions since September to reduce its surplus of older inventory. These cuts are expected to reach 30% by the fourth quarter. With the expectation of declining inventories, manufacturers are looking to increase consumer DRAM contract prices by more than 10% to avoid losses. However, despite some producers raising their prices at the end of September, demand has been lackluster, with purchasing and stock-up efforts not meeting expectations. This deviation in pricing goes against the anticipated supply-demand balance, suggesting a more modest estimated rise of 3-8% in consumer DRAM contract prices for the fourth quarter, which is below manufacturers’ initial targets.

DRAM Contract Prices to Rise in Q4 with Estimated 3-8% Quarterly Increase

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Background Information

About nVidia: NVIDIA has firmly established itself as a leader in the realm of client computing, continuously pushing the boundaries of innovation in graphics and AI technologies. With a deep commitment to enhancing user experiences, NVIDIA's client computing business focuses on delivering solutions that power everything from gaming and creative workloads to enterprise applications. for its GeForce graphics cards, the company has redefined high-performance gaming, setting industry standards for realistic visuals, fluid frame rates, and immersive experiences. Complementing its gaming expertise, NVIDIA's Quadro and NVIDIA RTX graphics cards cater to professionals in design, content creation, and scientific fields, enabling real-time ray tracing and AI-driven workflows that elevate productivity and creativity to unprecedented heights. By seamlessly integrating graphics, AI, and software, NVIDIA continues to shape the landscape of client computing, fostering innovation and immersive interactions in a rapidly evolving digital world.

nVidia website  nVidia LinkedIn

About Samsung: Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

Samsung website  Samsung LinkedIn

Technology Explained

CPU: The Central Processing Unit (CPU) is the brain of a computer, responsible for executing instructions and performing calculations. It is the most important component of a computer system, as it is responsible for controlling all other components. CPUs are used in a wide range of applications, from desktop computers to mobile devices, gaming consoles, and even supercomputers. CPUs are used to process data, execute instructions, and control the flow of information within a computer system. They are also used to control the input and output of data, as well as to store and retrieve data from memory. CPUs are essential for the functioning of any computer system, and their applications in the computer industry are vast.

DDR4: DDR4 is a generation of Double Data Rate (DDR) dynamic random access memory (RAM) technology. It is a type of RAM that utilizes a higher clock frequency and is more power-efficient than its predecessors. As a result, it is capable of processing data more quickly than other RAM in the computer industry. Its increased speed and power efficiency are beneficial for applications such as gaming, rendering, and machine learning. It is designed for high-performance computing and enables faster access to stored information, resulting in better overall performance for the user. Furthermore, because of its low voltage requirements it requires less power consumption, making it an attractive option for many computer systems. DDR4 is set to become the primary RAM in most computer systems as the industry transitions away from its predecessors.

DDR5: DDR5 (Double Data Rate 5) is the next generation of memory technology for the computer industry. It is a modern day improvement on earlier DDR technologies, with faster speeds, greater bandwidth and higher capacities. DDR5 enables higher resolution, seamless gaming experiences and faster data transfer rates, making it an ideal choice for high-performance computing and 4K gaming. With its greater RAM compatibility, DDR5 provides faster buffering times and raised clock speeds, giving users an improved overall work system. DDR5 is also optimized for multi-tasking, allowing users to multitask without experiencing a significant drop in performance, increasing the productivity of digital tasks. As an ever-evolving technology, DDR5 is paving the way for the computer industry into a new and powerful era.

GDDR6: GDDR6 stands for Graphics Double Data Rate 6th generation memory. It is a high performance memory used in graphics cards and graphics processing units (GPUs), specifically targeting gaming, AI and deep learning-related applications. GDDR6 achieves higher bandwidth than previous generations, allowing faster and smoother gaming experience for users. It is also more power efficient, resulting in lower energy consumption overall. The improved power efficiency makes it adaptable to today's needs of thinner laptops and ultra-high definition gaming laptops. Additionally, GDDR6 is used in storage solutions and advanced data center applications to help streamline large amounts of data at lightning-fast speeds.

GPU: GPU stands for Graphics Processing Unit and is a specialized type of processor designed to handle graphics-intensive tasks. It is used in the computer industry to render images, videos, and 3D graphics. GPUs are used in gaming consoles, PCs, and mobile devices to provide a smooth and immersive gaming experience. They are also used in the medical field to create 3D models of organs and tissues, and in the automotive industry to create virtual prototypes of cars. GPUs are also used in the field of artificial intelligence to process large amounts of data and create complex models. GPUs are becoming increasingly important in the computer industry as they are able to process large amounts of data quickly and efficiently.

LPDDR5: LPDDR5 is a type of computer memory technology that is used in many modern computers. It stands for Low Power Double Data Rate 5 and is the latest version of the LPDDR memory standard. It is a type of dynamic random access memory (DRAM) that is designed to be more power efficient than its predecessors. It is used in many modern laptops, tablets, and smartphones to provide faster performance and longer battery life. LPDDR5 is also used in some high-end gaming PCs and workstations to provide faster loading times and smoother gaming experiences. It is also used in some servers and data centers to provide faster data processing and storage.

NAND: NAND technology is a type of non-volatile memory that is used in many computer applications. It is a type of flash memory that is used to store data in a non-volatile manner, meaning that the data is not lost when the power is turned off. NAND technology is used in many computer applications, such as solid-state drives, USB flash drives, digital cameras, and memory cards. It is also used in many embedded systems, such as cell phones, tablets, and other consumer electronics. NAND technology is a reliable and cost-effective way to store data, making it a popular choice for many computer applications.

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