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DRAM Market May Suffer Short Supply in 2017 in Case of No New Investments
Possible Short Supply
DRAM Market May Suffer Short Supply in 2017 in Case of No New Investments
  • By Cho Jin-young
  • September 12, 2016, 01:30
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The DRAM market in 2017 is expected to see a minus 1.2 percent in short supply on an annualized basis as DRAM manufacturers are reducing the excessive investment.
The DRAM market in 2017 is expected to see a minus 1.2 percent in short supply on an annualized basis as DRAM manufacturers are reducing the excessive investment.

 

The DRAM market in 2017 is expected to see a minus 1.2 percent in short supply on an annualized basis. By half-yearly settlement, the market will experience a slight supply excess in the first half of the year while it will be in short supply in the second half. This is largely due to the fact that DRAM manufacturers are reducing the excessive investment.

According to semiconductor and investment banking industry sources on September 9, the demand of DRAM products will grow by 19.3 percent in 2017 from a year earlier. By sector, the personal computer (PC) market is expected to show a minus 3.7 percent growth, while the server and smartphone markets will increase 5 percent to 17 million units and 6 percent, respectively.

The loads of PCs will exceed that of mobile devices, in particular, servers. For smartphones, the average load capacity of DRAMs will grow from 2.1 GB this year to 2.5 GB next year.

On the other hand, the monthly production of DRAM products is expected to decrease by 20,000 units from 1.05 million units in 2016 to 1.03 million in 2017. The figure reflects output losses caused by process conversion.

However, the growth rate of supply due to process conversion was used to stand at about 30 percent. Now, the figure has lowered from some 20 percent to 10 percent as the level of technical level for fine process has improved.

By half-yearly, a slight oversupply is expected in the first half of next year on account of the slow season, which will start in the first quarter, Micron’s conversion to 20-nanometer process and SK Hynix’s conversion to some 20-nm process. However, a short supply will occur in the second half of the year when the seasonal peak season begins and there are no additional investments made.

The price of overall DRAM products will drop 9.8 percent next year, lower than the falling production costs of 18 percent, according to market watchers. 

Meanwhile, DRAMeXchange said that the price of DRAM – DDR3 4GB – was on the decrease to US$1.25 (1,383 won) until the end of May this year and it stopped falling in June. Then, it has been on the increase to US$1.38 (1,526 won) in July and August.