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DRAM Shortages Expected Next Year
Global DRAM Market
DRAM Shortages Expected Next Year
  • By matthew
  • November 20, 2013, 07:23
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Hynix's latest 44nm 1Gb DDR3 RAM chip.
Hynix's latest 44nm 1Gb DDR3 RAM chip.


Following oversupply in Q1-Q3 2013, DRAM chips are in short supply in Q4, and the trend is expected to continue in 2014. As a result, DRAM prices are likely to continue to rise, and memory manufacturers will probably record better performance next year.

According to market research firm iSuppli on November 18, in Q3 this year the demand for 1GB DDR3 RAM equaled 9.142 billion units, while the supply amounted to 9.302 billion units. The proportion of demand to supply was 102%. 

However, the fourth quarter has seen a surge in demand and a decrease in supply. So far, 11.53 billion units have been demanded, but only 9.877 billion units have been supplied to the market. The demand to supply ratio is 86%. 

In Q1 2014, it is predicted that 11.011 billion units will be requested, while 10.179 billion units will be available in the market. The ratio is estimated to be 92%. In the second quarter, the ratio is likely to reach 91% with 11.611 billion units in demand and 10.582 billion units in supply. 

Starting in Q3 next year, the gap between demand and supply is going to widen again. In Q4, demand is likely to reach 15.192 billion units, whereas supply is expected to stand at 11.926 billion units. Thus, the percentage of supply vis-à-vis demand is forecast to be 79%. It is anticipated that the market will encounter the worst supply shortages after the first quarter of 2015. 

Experts in the stock market are forecasting that the demand and supply for DRAM chips are not going to be kept in balance next year. IBK Securities is predicting a 29% increase in demand and a 26% rise in supply in 2014. Analysts in the semiconductor memory industry anticipate that DRAM prices will continue to go up next year.

In fact, the DRAM spot price has been steadily rising since the fire in SK Hynix’s Wuxi plant on September 4. According to semiconductor e-commerce site DRAMeXchange, the price for 1GB DDR3 RAMs hit US$1.396 on November 18, up 24% compared to September 4. The price for 2GB DDR3 1600MHz RAM recorded US$1.997, a 27% increase.

Kim Sung-in, a senior analyst at Kium Securities, said, “DRAM prices are likely to continue to rise in Q4 2013 and Q1 2014,” adding, “Memory manufactures such as Samsung Electronics, SK Hynix, Micron, and Toshiba are expected to post the best performance next year.”