Trendforce Expects Drams Prices to Rise in 2020

DRR4 memory prices have been falling for a long time. But there are signs that DRAM prices will rise again soon, and Trendforce is now confirming that trend as well.

Trendforce warns that DRAM memory prices will start to rise in the second half of 2020

In 2020 prices will stabilize, and then increase from the second quarter onwards. TrendForce indicates that there has been an influx of degraded 1Xnm chips in the spot market at minimal prices due to product returns. Although the degraded chips are still being returned, memory module manufacturers and channel brokers are more willing to increase their inventories. With the rapid digestion of the stock of degraded 1Xnm chips, spot prices have also started to rise.

In terms of supply and demand, the DRAM market in the fourth quarter of the year is still slightly biased towards excess supply despite the five quarters of inventory adjustment. In addition, although the global demand for DRAM memories in the first quarter of 2020 will be higher than usual despite seasonality, the reversal of excess supply will not occur before mid-2020. However, the price increases of DRAMs historically tend to precede setbacks in supply / demand dynamics; As a result, TrendForce previously stated that DRAM ASP could start to recover in the early second quarter of 2020, unfortunately for users who will see memory prices rise.

TrendForce's latest updates to its 1Q20 price forecast are as follows: prices for DRAM contracts for PC, specialized DRAM and mobile DRAM will experience small QoQ declines, while contract prices for DRAM products for Servers will record an increase in QoQ. With the expected cyclical price spike that first occurred in the server DRAM segment, the DRAM ASP overall could also remain stable at approximately the same level as in the fourth quarter of 19.

The range of this increase in the second quarter of 2020 is not exactly known, it could be a couple of dollars or more, but it is an important warning regarding what may happen next year.

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