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Guru3D.com » News » Demand for DRAM is increasing again - which will drive prices up

Demand for DRAM is increasing again - which will drive prices up

by Hilbert Hagedoorn on: 11/21/2019 07:44 AM | source: trendforce | 19 comment(s)
Demand for DRAM is increasing again - which will drive prices up

If you are in the market for some DDR4 memory for your PC, now might be a good time to pick up some DIMMs. Proces are historically low and projections show an increase in demand, thus prices will rise again.

Trendforce's DRAMeXchange, predicts that demand for dram is starting to pick up again. The result can be seen and monitored in an increase in the turnover of the memory manufacturers. Sales for the entire market would have grown by 4% in the third quarter compared to the previous quarter.

According to the DRAMeXchange research division of TrendForce, demand-side inventory in 2H19 has returned to relatively healthy levels. Furthermore, some vendors pulled their quarterly product shipment forward in an effort to avoid potential negative impacts from Trump’s impending tariffs; this shift skyrocketed DRAM suppliers’ sales bits in 3Q19, driving total DRAM revenue up by 4% and ending the QoQ decline which lasted over three consecutive quarters. Despite an already strong-performing base period in 3Q19, the three major DRAM manufacturers are projected to increase their shipments even further in 4Q19, propelled by demands from the server and smartphone markets.

 

 

Regarding the performance of 3Q19 revenues, Samsung increased its sales bits by 30% and quarterly revenue by 5% QoQ to $7.12 billion because Chinese smartphone vendors aggressively pulled their quarterly shipment forward and because demand in the server market has gradually recovered. Likewise, SK Hynix grew its sales bits by 20% and quarterly revenue by 3.5% to $4.41 billion. On the other hand, because of Micron’s relatively weaker base period in 2Q19, it increased its sales bits by almost 30%, and its revenue reached $3.07 billion. However, Micron’s market share dropped below 20%. TrendForce believes that Micron’s lack of greenfield fabs – and the corresponding lack of wafer inputs – will lead to a continued reduction in market shares.

Suppliers See Diminished Profitability under the Influence of a Decline in 3Q19 DRAM ASP

In spite of positive movements in shipment numbers, DRAM suppliers saw diminished operating profit margins due to a 20% industry-wide decline in ASP. Samsung’s quarterly operating profit margin fell to 33%, from 41% the previous quarter. This decline is close to the company’s typical medium-to long-term threshold of 30%. Therefore, TrendForce expects Samsung to be relatively unwilling to commit to future price cuts. On the other hand, SK Hynix engaged in a comparatively aggressive cost reduction initiative by transforming part of its server DRAM production capacity into mobile DRAM production capacity in 3Q19. This cost reduction, combined with a weak base period in 2Q19, resulted in a relatively modest dip in operating profit margin from 28% to 24% in 3Q19.

Micron had a slightly higher ASP decline during the June-to-August fiscal quarter compared to Korean manufacturers, whose corresponding fiscal quarter ran from July to September. As a result, its drop in operating profit margins was more drastic as well, from 35% in 2Q19 to 24% in 3Q19. If the decline in ASP remains minimal, and cost reductions continue, then manufacturers can maintain their current levels of profitability well into 4Q19 without any significant downturn.

From a technological perspective, Samsung has maintained a consistent level of wafer input this year, but it will gradually convert the production capacity of Line 13 at its Hwasung factory from DRAM to CMOS image sensors. However, the reduction in wafer input at Line 13 will be partially offset by Samsung’s second memory fab in Pyeongtaek, which is expected to begin mass production, including 1Znm process technology, in the near future. Overall, Samsung will neither make substantial changes to its wafer input next year, nor have 1Znm process occupy a large share of its process nodes. The company is expected to remain cautious in raising its output.

Similarly, SK Hynix next year will both convert its M10 wafer input from DRAM into CMOS image sensors and increase the output of its M14 fab. Regarding its two recently constructed Wuxi-based fabs, because of the influence of the China-U.S. trade war, their wafer input will follow a relatively conservative plan. Finally, Micron Memory Taiwan (formerly Rexchip) has completely adopted the 1Xnm process while aiming for 1Znm as its next target, with actual output planned for 2020. Over half of the process nodes at Micron Technology Taiwan (formerly Inotera) are now 1Xnm, with 30% of total process nodes being 1Ynm.

In terms of Taiwanese manufacturers, owing to the over 35% increase of its sales bits, Nanya was able to grow its revenue by 18.7% QoQ in spite of a double-digit drop in ASP. However, its gross profit margin and operating profit margin both saw ongoing decline. In light of the comparably strong 3Q19 base period, it is likely that Nanya will have weaker 4Q19 shipment numbers, and it will require more time for the company’s profitability to bounce back. On the other hand, Winbond showed consistently robust performance, with a 5% QoQ growth in DRAM revenue. Lastly, Powerchip suffered from its clients’ high inventory levels and reduced its shipment, causing a 6% decline in revenue (note: this calculation pertains only to Powership’s own DRAM products and does not include its DRAM foundry service).



Demand for DRAM is increasing again - which will drive prices up




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anticupidon



Posts: 5507
Joined: 2008-03-06

#5733635 Posted on: 11/21/2019 07:51 AM
Wait, what?
Did some factory got flooded again, or what is this time?
Ah, the same old, same old. Greed, the game played by everyone worldwide.
Will buy 16 GB RAM ASAP

sverek



Posts: 6097
Joined: 2011-01-02

#5733637 Posted on: 11/21/2019 07:58 AM
Wait, what?
Did some factory got flooded again, or what is this time?
Ah, the same old, same old. Greed, the game played by everyone worldwide.
Will buy 16 GB RAM ASAP
https://forums.guru3d.com/threads/samsung-fights-off-damage-from-contaminated-dram-semiconductor-devices.429366/ ?

Akumu
Member



Posts: 49
Joined: 2016-12-17

#5733648 Posted on: 11/21/2019 08:29 AM
The last time this happened a kit I bought just before the price increases pretty much doubled in cost.

anticupidon
Member



Posts: 5507
Joined: 2008-03-06

#5733652 Posted on: 11/21/2019 08:31 AM
Got myself some 16 GB 3200 CL16 for 73€...
Quick, mash the Buy button!!

sverek
Member



Posts: 6097
Joined: 2011-01-02

#5733655 Posted on: 11/21/2019 08:55 AM
Plot twist: Amazon manufactured propaganda of increased DRAM demand to sell more DRAM.

wraps ass with tin foil

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