Buyers of server DRAM modules will likely face price hikes of three to eight percent in the third quarter of 2017, according to the latest data from DRAMeXchange, a division of TrendForce. The good news is the contract price increase won’t be nearly as high as in the first and second quarters of 2017, when tags rose by 40 percent and 10 percent, respectively, due to tight supply.
DRAMeXchange forecasts an average contract price of about $260 for 32-GB server DRAM modules in the third quarter for tier-one customers. However, second-tier customers should expect to pay more, according to the market research firm.
Mainstream modules have expanded into 32 GB, and they are supporting higher data transfer bandwidths from 2133 MHz and 2400 MHz to 2666 MHz, according to DRAMeXchange.
“Going into the second half of 2017, the growth in the memory content per box for servers and the increase in the market penetration of 32GB product lines are expected to be the main demand drivers,” said DRAMeXchange analyst Mark Liu in a statement. “DRAMeXchange projects that the penetration of 32-GB capacity option in the total server DRAM module shipments will surpass 60 percent by the end of 2017.”
In addition to price increases, buyers also need to prepare for continued shortages. Despite industry reports of declining global server shipments in the first quarter of 2017, Liu expects the server market to heat up in the second half of the year.
Shortages of server DRAM modules will not ease any time soon, said Liu, primarily due to orders placed in the first half of 2017 and new Purley-based servers. Server orders in the second half of 2017 will be related to procurement contracts signed in the first half of the year by data center operators, enterprises and government organizations, according to Liu.
He believes “a sizable part of this demand will be for servers based on Intel’s Purley platform. The initial shipments of Purley-based servers are expected to mostly go to data centers that will be replacing outdated hardware.”
However, Liu doesn’t expect new enterprise servers with Purley solutions to reach the market until the first quarter of 2018. “The market penetration of high-capacity modules such as 32-GB RDIMMs and 64-GB LRDIMMs is expected to accelerate with the arrival of Intel’s new platform,” he said.
The current challenge in the server DRAM market is undersupply. Shipment fulfillment rates for server DRAMs at memory suppliers have hovered around 60 to 70 percent since the beginning of 2017, according to Liu.
Couple server DRAM undersupply with fulfillment of Q1 procurement contracts and new Purley-based servers, demand will continue to increase for server DRAM products particularly high-capacity modules until the end of the year, resulting in supply issues for buyers.
Global server shipments in the latter half of 2017 will grow by around 10 percent compared with the first half of the year, forecasts DRAMeXchange. The top three server vendors by shipment market share in 2017 will be HPE, Dell and Lenovo, which account for about 40 percent of the market. However, DRAMeXchange reports that Huawei will have the highest estimated year-on-year shipment growth at nearly 30 percent, followed by Sugon and Inspur, both with estimated growth rates of 15 percent.