Commodity DRAM capacity is expected to be tight in the short term as a result of overall growth in the memory storage industry in the second half of 2014, driven by smartphone demand, according to TrendForce. Analysts also expect increased demand for server and mobile DRAM during the second half of the year, which will drive record-high profits for DRAM vendors.
In comparison, the NAND Flash market is expected to transition from oversupply in the first half of the year to balanced supply during the second half of 2014 thanks to strengthening demand from OEM and module customers. All of these factors will drive up pricing during the second half, according to DRAMeXchange, a subsidiary of TrendForce.
Smartphone shipments in 2014 are expected to grow 29 percent to 1.196 billion units due to increased demand in China as a result of 4G TD-LTE developments, according to DRAMeXchange. Other growth contributors cited include the release of the new iPhone, global economic recovery, and increased demand for entry-level and mid-range smartphones.
Chinese vendors hold about a 37 percent market share in smartphone shipments, said DRAMeXchange. These vendors are said to primarily use eMCP technology in their smartphones while the new iPhone will use LPDDR3 1GB technology. “This will lead to a slight increase in mobile DRAM prices during the third quarter and will quicken the exchange of LPDDR2 technology to LPDDR3,” according to Avril Wu, DRAMeXchange assistant vice president, in a statement.
In addition, PC DRAM supply will remain tight into the third quarter. The tight supply comes on the heels of improvements in notebook shipments, particularly following the suspension of Windows XP services, coupled with new notebook sales, according to Wu.
PC DRAM supply has been tight due to increased demand for big data, and because commodity DRAM and mobile DRAM have been in tight supply, stated Wu. “This has led to a slight increase in pricing for PC DRAM as well as an increase in the proportion of NAND Flash SSD used.”
Smartphone shipments also will play a big role in the NAND Flash market during the second half of 2014, according to DRAMeXchange. “Most new smartphones from major smartphone vendors will be released after mid-3Q 2014. OEM manufacturers meanwhile have been gathering reserves since June and NAND flash capacity is being shifted to system products, which is putting a strain on channel customer supply,” said Sean Yang, assistant vice president, DRAMeXchange, in a statement. “This has led to an increase in NAND Flash pricing as a result.”
Other factors impacting the memory market in the second half of the year is growing enterprise SSD demand due to increased demand for server and cloud storage along with mobile devices, said DRAMeXchange. If vendors cannot meet the increased demand this could result in tight supply for NAND Flash. “NAND Flash manufacturers have also been shifting capacity to high profit products, which should increase performances in the second half of the year,” noted Yang.