Anticipated Q3 Surge: DRAM Prices Projected to Rise by 8-13%

If you’re in the market for a new server, PC, or mobile device, you might want to brace yourself for some price hikes. According to a recent report by TrendForce, the average selling price (ASP) of DRAM is expected to continue rising in the third quarter, with an anticipated increase of 8-13%. But what’s behind this upward trend?

Well, it seems that a recovery in demand for general servers and an increased production share of High Bandwidth Memory (HBM) by DRAM suppliers are the main culprits. As a result, suppliers are maintaining their stance on hiking prices. The price of conventional DRAM is also expected to rise, albeit at a slightly lower rate of 5-10%.

But why are prices going up? TrendForce explains that buyers were more conservative about restocking in the second quarter, leading to stable inventory levels on both the supplier and buyer sides. However, looking ahead to the third quarter, there is still room for inventory replenishment for smartphones and cloud service providers (CSPs). Plus, the peak season for production is just around the corner. So, it’s no surprise that smartphones and servers are expected to drive an increase in memory shipments during this period.

When it comes to PC DRAM prices, they are projected to increase by 3-8% in the third quarter. This is due to the recovery in demand for general servers and the increased production share of HBM by suppliers. However, the increase is lower compared to server DRAM prices and shows a contraction compared to the second quarter. This can be attributed to the high inventory levels of PC DRAM and the lack of significant improvement in consumer demand.

Speaking of server DRAM, TrendForce estimates that its prices will increase by 8-13% in the third quarter. This is mainly thanks to seasonal stocking demand for general servers during this period. Additionally, due to high average inventory levels of DDR4 among buyers, purchasing momentum will be focused on DDR5, leading to a higher price increase for DDR5 compared to DDR4. So, if you’re planning to invest in server memory, be prepared to pay a bit more.

The mobile DRAM market is facing its own set of challenges. Continuous price increases in the fourth quarter of 2023 have affected the profitability of brands. However, brands are not rushing into price negotiations for the third quarter, as current inventories are quite sufficient. Manufacturers aim to fill the profit gaps from previous quarters and anticipate a tightening supply-demand balance next year. As a result, they are maintaining their intention to raise contract prices. Nonetheless, due to the passive negotiation stance of buyers and high inventory levels, the price increase in the third quarter may be limited. TrendForce estimates that the quarterly price increase will be between 3-8%, with LPDDR4(x) experiencing the smallest increase, and possibly even further contraction.

When it comes to graphics DRAM, overall demand remains relatively flat in the third quarter. Price trends are mainly influenced by the interconnected effects of other DRAM products. Manufacturers are firmly in an upward pricing cycle, and buyers are more open to price hikes proposed by sellers. On the supply side, as new GPUs enter the verification stage, manufacturers are gradually increasing the production of GDDR7, which currently carries a 20-30% premium over GDDR6. The shipment of GDDR7 samples in the third quarter is expected to slightly push up the average selling price. As a result, graphics DRAM prices are anticipated to increase by 3-8% compared to the previous quarter.

Lastly, let’s talk about DDR3 and DDR4 prices. The overall consumer DRAM market is experiencing oversupply. However, the three major suppliers are determined to raise prices due to the capacity squeeze from HBM production. Additionally, Taiwanese manufacturers have yet to return to profitability, adding further upward pressure on prices. Therefore, prices are expected to maintain a slight upward trend.

Looking ahead to the fourth quarter, the need for inventory replenishment by smartphone manufacturers and CSPs, along with an increased production share of HBM by suppliers, will support the continuation of rising prices. As the end of the year approaches, both buyers and sellers will formulate procurement strategies based on the supply and demand outlook for 2025. So, don’t be surprised if buyers start hoarding inventory in anticipation of potential shortages caused by the increased share of HBM production next year.

In conclusion, if you’re planning to purchase any devices that rely on DRAM, be prepared to dig a little deeper into your pockets. The demand for servers, PCs, mobile devices, and Graphics Cards is driving an upward trend in DRAM prices. While this might not be the news we were hoping for, it’s important to stay informed about these market trends. After all, knowledge is power when it comes to making purchasing decisions in the ever-changing world of technology.

Technology Explained

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DDR3: DDR3 (double data rate 3) is a type of computer transfer technology that is commonly used in modern computers. It is the successor to the original DDR and DDR2 technologies used to communicate data between the main memory and the CPU (central processing unit). It works by allowing two sets of information to be sent per clock 'tick', which helps to boost overall speed and efficiency. With DDR3, the computer industry has seen a significant increase in speed and performance. DDR3 is used in a variety of computer applications, from gaming to intense data processing and artificial intelligence tasks. It is used in PCs, laptops, and Macs, as well as in tablet technologies like the iPad. It also helps to provide better video streaming and signal data processing in networking. DDR3 is an essential and versatile technology in the modern computer industry.

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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.

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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.

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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.

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GDDR7: GDDR7 (Graphics Double Data Rate 7) is the seventh generation of graphics double data rate (GDDR) memory. It is a type of dynamic random-access memory (DRAM) that is specifically designed for use in graphics cards. GDDR7 memory offers a number of advantages over previous generations of GDDR memory. GDDR7 is a significant improvement over previous generations of GDDR memory. It offers faster speeds up to 32 gigabits per second (Gbps) per pin, lower power consumption, and improved error correction. This makes it ideal for use in high-performance graphics cards and other applications that require high bandwidth and low latency.