Micron Fab Interruption May Lead to Tighter DRAM Supply in Q2
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Buyers of memory devices will face DRAM shortages and price hikes in the first half of 2017 until capacity expansion plans kick in during the second half of the year. Buyers should continue to monitor the DRAM market closely and work with their supplier partners to ensure supply and stable pricing. The latest analysis indicates the global average sale price (ASP) of DDR4 16-GB server DRAM, for example, is heading towards $130 in the second quarter of 2017, according to DRAMeXchange, a division of TrendForce.
The market research firm’s latest report also finds that demand continues to outpace supply and contract prices of server DRAM modules will increase by nearly 40 percent sequentially in the first quarter, followed by a 10 percent price hike in the second quarter.
It’s a similar scenario in the PC DRAM market. The contract price of PC DRAM modules is forecast to increase by nearly 40 percent on average in the first quarter. Prices also are expected to rise in the second quarter.
While this is good news for memory device manufacturers, buyers will need to remain in close communications with their suppliers to deal with potential DRAM shortages. “All types of DRAM will remain in short supply as major DRAM suppliers proceed with more conservative capacity expansion plans,” according to DRAMeXchange. “Prices of server DRAM therefore are expected to rise through the first half of 2017.”
Tight supply and rising prices in the PC DRAM market have been pulling up server DRAM prices since the fourth quarter of 2016, said DRAMeXchange. This was coupled with higher than expected demand for server DRAM in the second half of 2016 driven by server vendors who “stocked up to fulfill large orders related to data center projects.”
DrameXchange expects the primary demand driver for server DRAM will continue to be increased content per box.
"Rising demand for mobile DRAM kept squeezing the industry's production capacity for PC DRAM," said Avril Wu, research director of DRAMeXchange, in a in a previous statement.
“The current capacity expansion efforts undertaken by suppliers will not have significant effects on the market until the second half of 2017,” according to DRAMeXchange. This means buyers should expect tight supply and higher tags throughout the first half of the year.
DRAMeXchange noted that the transition of server DRAM production to 20-nm processes will make 8-Gb mono-die chips mainstream this year, thus increasing the availability of 16-GB and 32-GB modules. In addition, Intel and AMD will release server processors based on their latest platforms during the second half of 2017. This will likely drive first-tier ODMs to upgrade their products with high-density DRAM modules, according to DRAMeXchange.
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