Third Quarter DRAM Price Hikes May Be Smaller Than Expected
Good news for anyone considering purchasing DRAM in the coming months. As DRAM prices skyrocketed in the second quarter of 2021 thanks to high demand and limited supply, most of the price increase would be behind us. While Trendforce expects prices to rise in Q3 2021, the jump is expected to be below normal.
Trendforce predict now DRAM contract prices will rise 3-8% in Q3, compared to 18-23% in Q2 2021. The company also believes DRAM supply will continue to grow in Q3 and Q4 of this year, which is expected to increase. limit further price increases.
While mobile demand has been aggressive, PC makers are holding a steady 8-10 week inventory. Trendforce notes that this figure is quite high and therefore believes that manufacturers will be relatively cautious in their DRAM purchases. The reason we are still seeing a global supply crisis is that the demand for server DRAM is increasing, but not enough to offset the relatively high inventory levels carried by server manufacturers as well. As a result, DRAM server prices are expected to increase 5-10% in the third quarter, according to PC DRAM estimates.
The market for mobile DRAM (it seems to mean mainly smartphones) comes in a different form. The company notes that pricing for mobile DRAM “will defy market realities and increase 5-15% in QoQ, with potential risks of high price and low demand.”
GDDR6 prices are still expected to rise 8-13% in the next quarter, according to reports in early June. Trendforce notes that the demand for GDDR6 still far exceeds supply and that 90% of DRAM graphics products have migrated to the new memory standard. Memory manufacturers should prioritize server DRAM needs first, so graphics DRAM prices will rise as well.
News of modest GPU VRAM price increases will be welcomed – or at least something close to that – provided GPU prices drop overall. The price of new GPUs has been up to 300% above MSRP in recent months. China’s crackdown on cryptocurrencies has driven demand for new GPUs down and we hope to see evidence of cheaper GPU prices in the coming weeks. An 8-13% increase in the price of VRAM is literally a small price to pay compared to the sky-high cost of new cards since last fall.
The implication of these trends, taken together, is that hardware prices should start to stabilize over the next six months. We are still in a situation where demand is likely to exceed supply, but no one is forecasting further surges in demand at this time. Chip production is slowly increasing quarter over quarter as manufacturers bring more capacity online, which will help cushion the seasonal increases in demand that normally occur in the second half of the year. Trendforce doesn’t mention DDR5 at all in its statements, but we should see the first DDR5 shipments by the end of the year. It may not have much of an impact on the total market, but it may alleviate the demand for DDR4, depending on the popularity of these systems.
Featured Image By Pete, Flickr, CC BY-SA 2.0