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A power outage at samsung's fabs won't affect DRAM prices in the first quarter

Published :1/13/2020 3:13:31 AM

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As early as Dec. 31, 2019, after a power outage at samsung's Line 13 plant in hwaseong, South Korea, led to production disruptions, there were concerns about the impact of such outages on the broader DRAM market.But the industry seems to have completely ignored the incident.Samsung's outage won't have a significant impact on commodity DRAM prices, according to analysts at TrendForce DRAMeXchange.Overall, though, DDR4 prices are still gradually rising as part of cyclical market volatility

The power outages themselves and the subsequent disruption at samsung's line 13 plant have not significantly affected global DRAM supply, so DRAMeXchange does not expect DRAM makers to raise their prices as a result.Indeed, to avoid a potential hit from U.S. tariffs on Chinese imports, PC makers produced more computers than they needed in the fourth quarter and shipped them to the United States.As a result, their output will be lower than seasonal forecasts for the first quarter of 2020.

But with memory makers planning to limit DRAM bit production growth this year, which could mean supply-driven price increases, PC makers may be inclined to increase their purchases of memory in the first quarter to boost DRAM stocks (or at least be predictable) when prices are low.Due to this behavior, commodity DRAM prices will remain flat or even rise compared to the fourth quarter of 2019.In part, the samsung factory incident may make PC makers more willing to get the DRAM they need as soon as possible.

Samsung makes special DRAM chips using 20 nm and 25 nm processes at its Line 13 fabs in huacheng, South Korea.Dedicated memory is acquired through quarterly lock trades, rather than commodity DRAM for larger, smoother trades.Notably, because of these differences, companies that use special DRAM products do not actively store such devices, which means they are somewhat more susceptible to interference and generally have to accept the price offered.To that end, DRAMeXchange expects monthly contract prices for specialty DRAM to start rising this month.

Analysts also predict that average selling prices for server DRAM and graphics DRAM will rise as demand for such storage devices has been increasing since mid-December. At the same time, market observers expect mobile DRAM prices to remain unchanged in the first quarter, despite the upcoming next-generation handsets from various vendors in the first and second quarters.