Posted by alphaatlas 11:58 AM (CST)
Wednesday November 07, 2018
According to a recent report by DRAMeXchange, DDR4 prices are starting to fall. They say the average price of a 8GB DRAM module dropped just over 10% QoQ, from $68 to $61. The research firm "does not discount the possibility of further price declines in November and December. Also, the price decline of 8GB solutions will continue to surpass that of 4GB solutions because DRAM suppliers are now eager to sell off their inventory." Trendforce's analysis focuses on bulk shipments, not low-volume, high-speed, high margin DDR4 kits for custom PCs, but the IC price reductions should eventually trickle down to everyone.
PC-OEMs have not been able to step up their product shipments in 2H18 due to the shortage of Intel CPUs. Going forward, the pressure of rising component costs will only mount as the shipment season transitions from the peak period to the slow period. Since DRAM prices had risen for nine consecutive quarters, they are expected to take a plunge as they move past the inflection point. The sliding ASP in the PC DRAM market will also add to the downward pressure on prices of PC DRAM modules, leading to large and sudden drops. Looking ahead to 1Q19, seasonal headwinds will affect shipments of end products not only in the PC market but also in the server and smartphone markets. Furthermore, the quarter will be the period for the channel market and OEMs to eliminate excess inventory. Thus, negotiating contracts will be very challenging for the DRAM suppliers. The ASP in the whole DRAM market is forecast to fall by as much as around 20% YoY in 2019, according to DRAMeXchange's latest analysis. After reaching peak profit in 3Q18, DRAM suppliers are now optimizing their costs so that they will have a soft landing in 2019 as prices are marked down every quarter.