Media Contact

Ms. Lindsay Hou

Tel: +886-2-8978-6488 ext.667

RSS Subscription
  DRAM  
  NAND Flash  
  Storage  
  Display  
  Consumer Electronics  
  LED  
  Green Energy  
  Internet of Things  
  Semiconductors  
  Automotive Electronics  
  Innovative Technological Applications  
       

Press Release


Decline in Q4 DRAM Contract Prices Lessens as Buying Momentum Recovers, Says TrendForce

Monday , 11 / 11 / 2019 [ Analysts: TrendForce ]

According to the latest analysis from the DRAMeXchange research division of TrendForce, Q4 DRAM ASP is as of yet undergoing a slight QoQ decline, but this decline has shrunk down to 5%. In contrast, the total trading volume in October has seen considerable QoQ growth, which demonstrates an increased willingness to pay on the purchasers’ part. Once suppliers’ inventory levels have sufficiently lowered, they will no longer need to cut prices to encourage further sales. These factors have the potential to help DRAM prices stabilize and recover in 2020.

Samsung’s plan to expand its production capacity and Chinese DRAM manufacturers’ wafer start in 2020 are both factors that may impact DRAM market supply. However, TrendForce believes that Samsung will not increase its wafer capacity in 1H20, since the majority of its capital will be invested in new, 1Znm process-capable equipment. On the other hand, SK Hynix recently reiterated a reduction in capital spending next year, which will directly result in the relative slowdown of bit supply growth in 2020 compared to 2019. As well, Micron Technology is projected to have a comparatively moderate expense model next year, although it has yet to make any official announcements.

In relation to the continuing development of the Chinese DRAM industry, we hold a conservative outlook toward its initial production capacity planning, despite the year-end mass production announced by Hefei-based CXMT. Furthermore, the Chinese DRAM industry needs time to acclimatize itself to the learning curve involved in optimizing production. As a result, Chinese vendors will not significantly contribute to the global bit supply in 2020.

Spot market has slackened recently and seen prices reach new lows this year

Contrary to the contract market, the spot market is exhibiting a sluggish forward momentum, thanks to the drastic reduction in its trading volume. Because of this, spot prices are easily – and substantially – swayed by market news, case in point, the sustained DRAM price hike caused by the Japan-South Korea trade dispute. As the Japanese government gave formal approval to export chemical materials to Korea, this eliminated the market uncertainty regarding DRAM supply and subsequently induced a gradual, but daily, drop in spot prices, which reached a new low at the end of October since the July price hike.

TrendForce believes that the current pricing trajectory of spot markets is well within the projected range. If contract prices remain stable, and the demand side manages to avoid drastic cuts, then the stagnant spot price trajectory in the short term will have no impact on the development of DRAM market in the foreseeable future.

To keep updated with our press releases, please follow our social media pages. facebookGoogle+TwitterLinkin

TrendForce Press Center Copyright Notice
TrendForce grants you a limited license to use and/or republish any of the press releases on TrendForce Press Center for any legitimate media purpose (including copying and redistributing the content of press releases in any format and via any outlets), provided that you follow these license terms:

1. Reference TrendForce as the source on your works, or include a hyperlink to the original release on the TrendForce site.
2. Do not modify any press release wording, or maliciously alter its related information. Users are subject to any civil or criminal liabilities if the information displayed in the copy or redistribution of press releases is inconsistent with the original materials on TrendForce Press Center.
3. Do not modify or add hyperlinks, including but not limited to adlinks, within the press release. The authorization of press releases on TrendForce Press Center does not grant users the right to suggest, approve or endorse their value-added derivatives on behalf of this body.

If your citations of press releases contain mistakes and/or have information missing, TrendForce may, in its sole discretion, direct you to remove the content distributed via TrendForce from your site at any time and for any reason, and you agree to comply with such request.