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Average Contract Price of PC DRAM to Go Up 15% Sequentially in Q1 2017
November 23, 2016 | TrendForceEstimated reading time: 1 minute
The latest research from DRAMeXchange, a division of TrendForce, finds that the global DRAM market in the first quarter of 2017 will benefit from the stock-up activities ahead of the Chinese New Year holidays and the widespread expectations of tight supply. The average contract price of PC DRAM 4GB modules is estimated to rise by around 15% sequentially in next year’s first quarter to reach US$20. At the same time, the global DRAM market will see an across-the-board price hike that encompass DRAM for server, mobile and specialty applications. Despite off-season effect, the DRAM market will still be booming in the first quarter of 2017.
DRAM market now belongs to sellers as bit supply growth is constrained
“The oligopoly of the three major suppliers is firmly established, and upgrading the manufacturing technology beyond 20nm have yielded fairly limited increases in bit supply,” said Avirl Wu, research director of DRAMeXchange. “Also, the major suppliers are not planning to expand their capacities in the near future and are actually slowing down in the development of their respective leading edge technologies. Therefore, the undersupply situation will persist into 2017.”
As for demand, the main growth driver for next year will be the expansion of memory content per box for various devices, including PCs, servers and smartphones. With the LPDDR4 becoming mainstream in the smartphone market, 4GB of memory will also gradually become the standard in mid-range and high-end device categories. Next year may also see market releases of smartphones furnished with 8GB of memory. On the whole, rising memory density in devices will contribute to bit demand growth in the mobile DRAM market during 2017.
Wu pointed out the prices will definitely be going up in the first quarter of 2017, based on the survey of contract negotiations that are taking place right now. “The average contract price of PC DRAM 4GB modules is estimated to arrive at US$20 in next year’s first quarter, and the price gap between the contract market and the spot market is going to shrink further. Since suppliers do not have capacity expansion plans in the short term, the average selling prices of DRAM for all applications are expected to rise significantly in 2017 compared with 2016 on account of the tight supply situation.”
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