TAIPEI – Consumer DRAM has the strongest demand momentum, as its sequential price decline in the fourth quarter this year is expected to narrow to within 5%, says TrendForce.
Consumer DRAM currently accounts for 8% of the overall DRAM market’s bit consumption. As such, even though consumer DRAM prices have been fluctuating, movements in contract prices of DRAM products will generally be dictated by changes in the inventory levels of suppliers and buyers and by the recovery of purchasing momentum for mainstream server DRAMs.
DRAM prices will be under downward pressure until data centers and buyers of enterprise servers restart their inventory-building procurement. Hence, the recent rebound in spot prices is likely a temporary phenomenon, the research firm says.
Driven by expanded sanctions from the US, Huawei has recently intensified its procurement for DRAM products in anticipation of potential shortages after the grace period deadline. Under these circumstances, 16 mainstream chips will be sought after because of the demand coming from 5G infrastructure, networking devices, and other related end products.
TrendForce has therefore narrowed its forecasted sequential decline in consumer DRAM prices for the fourth quarter from the previous range of 10% to 15% to the current 0% to 5%. As for mobile DRAM and server DRAM, although procurement activities for these product categories have risen to some degree, this increased procurement is inadequate to change their current oversupply situations.
On the other hand, in spite of the marginal recovery in the quantity of NAND flash spot trading transactions because some countries have begun to ease the emergency measures for containing the spread of the Covid-19 pandemic, TrendForce maintains the NAND flash market will remain fairly weak over the long term. A price rally will unlikely happen in the near future, especially as the competition intensifies in the upstream part of the NAND Flash supply chain.