Mobile DRAM Price to Rise in 4Q21
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
Expected to exceed consensus, 4Q21 DRAM contract prices should remain flat q-q thanks to a rise in mobile DRAM ASP. The DRAM market is forecast to shift to a supply glut from 1Q22, when the tug of war between manufacturers and customers should be resolved.
Mobile DRAM price to rise in 4Q21
DRAM contract prices are expected to remain flat q-q in 4Q21. We leave our previous forecast unchanged. In contrast, market consensus predicts a roughly 5% q-q drop. Among products, the mobile segment looks particularly solid. Mobile DRAM prices are predicted to climb in the mid-single digits q-q in 4Q21. Recently, mobile DRAM inventories held by Chinese smartphone makers are shrinking. The iPhone 13, which is scheduled to be unveiled in September, is projected to sell very well at 100mn units.
In 4Q21, server DRAM prices should remain flat q-q. Of note, one North American hyperscaler who showed minimal order volume in 3Q21 has recently started placing orders, indicating that their inventory has been somewhat reduced. Although such orders are unlikely to be large enough to determine the direction of 4Q21 DRAM prices, we believe that they should be sufficient to digest the supply volume of chipmakers. Meanwhile, PC DRAM prices are expected to decline. PC sales have slowed since June due to reduced non-face-to-face demand. In addition, PC production has recently been challenged by parts supply issues.
DRAM oversupply expected from 1Q22
DRAM supply and demand are to remain matched in 4Q21 before turning to oversupply from 1Q22. DRAM makers are still adhering to their aggressive capacity investment strategies in light of expected 4Q21 supply-demand dynamics. DRAM shipments are forecast to increase 21% y-y in 2022 thanks to capacity expansion and transition to the 1anm process. Despite off-seasonality, 1Q22 shipments are to climb 3% q-q.
Meanwhile, DRAMeXchange has recently announced the August memory contract prices, with both PC DRAM and NAND coming in flat m-m. As most quarterly contracts were signed in July, there was no significant change in August transaction prices. The PC DRAM spot price stands at US$8.1 for 16Gb, having followed a continuing downtrend since June.