Endless Chicken Game

With the DRAM chip suppliers trying to reduce their inventories, the chip prices are being affected by the resulting increase in supply.
With the DRAM chip suppliers trying to reduce their inventories, the chip prices are being affected by the resulting increase in supply.

 

According to market research firms DRAMeXchange and IDC, the global DRAM market is forecast to record a bit growth of 3% to 4% in the second quarter of this year. The bit growth refers to an increase in the amount of DRAM production on a bit basis.

In the meantime, the Q2 bit growth estimates recently provided by major DRAM chip suppliers are double-digit without exception. For example, the increment is expected to be at least 10% for Samsung Electronics while those of SK Hynix and Micron Technology are estimated at 15% and at least 20%, respectively. “Such high estimates imply that the DRAM chip manufacturers are intending to reduce their inventories in the second quarter,” said KTB Investment & Securities analyst Jin Sung-hye.

These days, the shares of Samsung Electronics in the mobile and server DRAM markets are continuing to go up. In the first quarter of this year, Samsung Electronics succeeded in doing so by making use of its advanced 20 nm technology while both SK Hynix and Micron Technology regulated their shipments to protect the prices of their products. However, Micron Technology and SK Hynix are predicted to focus on their markets shares, rather than prices, in the following quarter as any additional drop in market share is likely to be a discomfort.

With the DRAM chip suppliers trying to reduce their inventories, the chip prices are being affected by the resulting increase in supply. Last month, the 16 GB server DRAM price fell 9% whereas the rate of decrease had been 4% in the previous month. 

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