Contract Prices Have Started to Drop in <span style='color:red'>PC DRA</span>M Market
Contract prices of PC DRAM products have started to turn downward sharply this October as major suppliers have completed most contract negotiations, reports DRAMeXchange, a division of TrendForce. The average price of 4GB PC DRAM modules for 4Q18 contracts has dropped by 10.14% QoQ from US$34.5 in 3Q18 to the current US$31. As for the average contract price of 8GB PC DRAM modules, it has dropped by 10.29% QoQ from US$68 in 3Q18 to the current US$61. Since the DRAM market has just entered oversupply, DRAMeXchange does not discount the possibility of further price declines in November and December. Also, the price decline of 8GB solutions will continue to surpass that of 4GB solutions because DRAM suppliers are now eager to sell off their inventory.“As the indicator of the price trend in the contract market, spot prices have kept falling since the early 2018 and continued their downtrend from September”, says Avril Wu, senior research director of DRAMeXchange. The latest update reports that the average spot price of 1G*8 chips has dropped to US$6.946, showing a difference of 5% with the average contract price of US$7.31. While the oversupply situation and the falling spot prices pull contract prices of PC DRAM modules downward, the market penetration of 8GB modules is starting to increase very rapidly because suppliers have aggressively expanded shipments of the higher-density products. DRAMeXchange furthermore believes that 8GB modules will surpass 4GB counterparts in shipment volume much sooner than originally anticipated and become the market mainstream. It should also be noted that DRAMeXchange will be using prices of 8GB modules as the base for determining the contract price trend in the PC DRAM market starting in 2019.Seasonal headwinds expected to aggravate price decline in the PC DRAM market during 1Q19PC-OEMs have not been able to step up their product shipments in 2H18 due to the shortage of Intel CPUs. Going forward, the pressure of rising component costs will only mount as the shipment season transitions from the peak period to the slow period. Since DRAM prices had risen for nine consecutive quarters, they are expected to take a plunge as they move past the inflection point. The sliding ASP in the PC DRAM market will also add to the downward pressure on prices of PC DRAM modules, leading to large and sudden drops.Looking ahead to 1Q19, seasonal headwinds will affect shipments of end products not only in the PC market but also in the server and smartphone markets. Furthermore, the quarter will be the period for the channel market and OEMs to eliminate excess inventory. Thus, negotiating contracts will be very challenging for the DRAM suppliers. The ASP in the whole DRAM market is forecast to fall by as much as around 20% YoY in 2019, according to DRAMeXchange’s latest analysis. After reaching peak profit in 3Q18, DRAM suppliers are now optimizing their costs so that they will have a soft landing in 2019 as prices are marked down every quarter.
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Release time:2018-11-06 00:00 reading:1021 Continue reading>>
Stagnant <span style='color:red'>PC DRA</span>M Contract Prices in August; TrendForce Anticipates Sliding Prices for 4Q18 Contracts
DRAMeXchange, a division of TrendForce, reports that most 3Q18 contracts in the PC DRAM market were completed in July. With contracts being mainly quarterly deals, the agreed prices for 3Q18 are generally slightly higher than those for 2Q18. Therefore, the overall trajectory of contract prices in the PC DRAM market has been relatively stable in August and is expected to remain so in September. The average contract price of mainstream 4GB PC DRAM modules has stayed at US$34.5 in August, while the average contract price of 8GB PC DRAM modules has also stayed at US$68. DRAMeXchange maintains its forecast that the average QoQ price increase for PC DRAM products in 3Q18 will be around 2%.The spot market, where developments are an early indicator of the contract price trend, shows that prices of mainstream chips have kept falling in August, and their general difference with contract prices continues to widen, says Avril Wu, senior research director of DRAMeXchange. Currently, DRAM suppliers are heading into negotiations with their clients to arrange the contracts for 4Q18. However, they will have more difficulties in maintaining their prices going forward. After examining the latest changes in bit supply and demand, DRAMeXchange anticipates sliding prices for 4Q18 contracts.In anticipation of falling ASPs during 2019, clients for now are reluctant to stock upAlthough 3Q18 is part of the traditional busy season, the demand growths of various end products are limited and not up to their usual seasonal levels. For instance, some smartphone brands and a few server manufacturers have marked down their shipment projections. Although end-product manufacturers as a whole are seeing a gradual drop in their DRAM inventories after posting shipment growths in this year’s first half, they are also noticing that the supply situation in the DRAM market is shifting from tight to loose. At the same time, most end-product manufacturers are highly uncertain about their own demand situations in 2H18 and the later period. As the DRAM supply expands, clients in the end market are actually hesitant to stock up and if the prices of DRAM products are likely to go down. If so, there is no urgency to replenish the DRAM inventory despite the seasonal influence.In the case of the server DRAM market, where demand has been fairly strong, impasse on prices is now appearing in the latest rounds of contract negotiations. This is an indication that DRAM suppliers may have to lower prices to maintain or increase sales volumes for their fourth-quarter deals. Also, there are now more discounts on high-density memory modules (high-density here is defined as 8GB or above for PC DRAM modules and 32GB or above for server DRAM modules). On the whole, suppliers are showing greater flexibility in their pricing strategies because they want to lock in the shipment volumes going into 2019 and capture more market share.
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Release time:2018-09-04 00:00 reading:1033 Continue reading>>

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