DRAM Contract Prices Expected to Rise from 2Q21
The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed.
DRAMeXchange announced memory contract prices for October, with DRAM and NAND prices sliding 8% m-m and 3% m-m, respectively. Memory prices are expected to weaken in 4Q20 due to slow data center investment. DRAM contract prices should come in flat q-q in 1Q21 and rise in 2Q21.
DRAM contract price declines 8% m-m in October
On Oct 30, DRAMeXchange announced memory contract prices for October, with the server DRAM 32GB price coming in at US$112 (-8% m-m), PC DRAM 8GB at US$24.8 (-8% q-q), and NAND MLC 64Gb at US$2.94 (-3% m-m). Slowing data center investment in 4Q20 has inevitably weakened memory prices.
DRAM oversupply should continue until end-2020. DRAM makers are increasing the portion of 1znm and accelerating the transition from the 8Gb die to the 16Gb die. In terms of production portion, DRAM makers cut server DRAM output and increased mobile DRAM production, demand for which has recently been booming. DRAM supply should begin falling from 1Q21 as makers delayed investment in new capacity from 3Q20.
DRAM contract prices to rise from 2Q21
Notebook PC sales remain solid thanks to non-face-to-face demand. Global notebook production is likely to increase 17% y-y in 2020. In the data center sector, companies such as AWS recently placed memory orders. Orders from major hyperscalers should start in December.
In 2021, no large-scale capacity investments are expected for DRAM or NAND. Samsung Electronics plans to reduce DRAM investment and increase NAND and foundry investment. SK Hynix acquired Intel’s NAND division, so the need to aggressively increase NAND capacity is low. SK Hynix’s DRAM investment is expected to be executed as planned. DRAM contract prices should fall 7% q-q in 4Q20, remain flat q-q in 1Q21, and rise again from 2Q21.