DRAM market will push pricing down 42.1% in 2019

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We've reported numerous times and quite repeatedly on what is happening in the DRAM market and the drop in prices. A new report now claims that your DDR4 modules might drop 40% in just this year. 

The new report comes from Gartner who claimes prices of dram modules will fall sharply in the long term as a result of too large a stock. Demand is decreasing for several reasons. Prices would fall by no less than 42% this year compared to the beginning of 2019. The situation would last until mid-2020. As it seems, prediction for the demand was incorrect, which means that too much has now been produced and there are large stocks. According to Gartner, this is due to a number of unforeseen factors, including the trade was between China and the US and less than expected sale of smartphones, servers and PCs.

-- Gartner -- 

A demand-driven oversupply in the DRAM market will push pricing down 42.1% in 2019 and the oversupply is expected to extend through the second quarter of 2020. The decline is due to signs of a slower demand recovery at the hyperscale vendors and the increasing inventory levels of DRAM vendors. This ends the longest period of undersupply seen in the DRAM industry.

The ongoing dispute between the U.S. and China is causing uncertainty over trade rates. U.S.-imposed restrictions on Chinese businesses are based on security concerns and will have a longer-term impact on semiconductor supply and demand. These combined issues will accelerate China’s domestic semiconductor production, as well as create local forks of technologies such as ARM processors. Some manufacturing will relocate outside China during the dispute and many companies will seek to diversify their manufacturing base to reduce any further disruption.

The global NAND market has been in oversupply since the first quarter of 2018 and is now more pronounced as the near-term demand for NAND is weaker than expected.

“We expect that high smartphone inventory and sluggish solid-state array demand will last for a few more quarters,” said Mr. Lee. “Given the aggressive price declines for NAND, it is possible to see a more balanced supply/demand outlook in 2020. However, looking further out is concerning given slowing demand drivers, such as PCs and smartphones, and more capacity as new fabs in China impact the market.” 

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DRAM market will push pricing down 42.1% in 2019

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