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Server DRAM prices are expected to rise by 10-15% in the second quarter.

Published :3/1/2021 4:24:37 AM

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There is a huge shortage of global chips, and memory giants Samsung Electronics and SK Hynix have fully opened up production capacity, and the supply is still in short supply. Analysts said that DRAM may enter the seller's market, and there may be a supercycle that lasts for several years.


The Korea Economic Daily reported on the 25th that data from the Korea Customs Service (KoreaCustomsService) and MiraeAssetDaewoo showed that from February 1 to 20, Korean memory exports increased by 15% to 1.07 billion U.S. dollars per month. February is the traditional off-season, and such enthusiastic buying is extremely rare.

The industry is desperate to produce, and the supply is still tight, making the memory a seller's market, and the supplier has regained the right to speak in pricing. According to data from DRAMeXchange, on February 22, the spot price of DRAM benchmark product ---DDR48G2400Mbps rose above US$4, the first time in 22 months. The current price of the product is 4.2 US dollars, a 14% increase compared with the end of January; a 21.4% increase compared with the end of last year.

According to industry sources, buyers are eager to buy chips and build inventories, but sellers in the market have responded coldly. This is a typical situation when there is a shortage of chips. Storage exports are booming, prices are rising, and there is a super cycle. Analysts and observers predict that this boom may last for several years.

The rise in spot prices will push up the contract price. TrendForce has revised the price outlook of server DRAM. It is estimated that the price increase in the second quarter will increase from 8% to 13% to 10% to 15%. Samsung Electronics quoted IDC's forecast and estimated that global DRAM demand will rise by 15% this year.

Barron`s previously reported that MehdiHosseini, an analyst at Susquehanna International Group, issued a report on 24. The most important finding is that although cloud and enterprise customers want to lock in the second half of the year's shipment prices, memory manufacturers are expected to have a significant increase and have not retreated. This shows that pricing power begins to shift from buyer to seller, which will bring meaningful profit expansion. Prior to this, the gross profit of the memory industry continued to be under pressure from 2018.

Hosseini pointed out that DRAM quotations in the first quarter increased by 5% to 10%, and the second quarter is expected to continue to increase by 10% or more. In terms of NAND flash, the first quarter quotations were flat or down 1% to 3%, which was better than the market's expected decrease of 5%. He estimated that NAND prices will rise by 5% or more in the second quarter. This situation is beneficial to major memory manufacturers Western Digital (WDC), Micron (Micron) and so on.

Market research firm TrendForce predicts that server demand will rise in the second quarter and shipments will continue to grow. In the second half of last year, due to the weak server DRAM market and increased demand for DRAM in smartphones, computers, and game consoles, suppliers increased the production of these products and reduced server DRAM production to about 30% of the total output. As server DRAM prices bottomed out at the end of last year, and shipments rebounded, server DRAM prices are expected to increase by 10%-15% in the second quarter of this year, and some transactions will increase by up to 20%.

The agency predicts that DRAM suppliers this year will be conservative in increasing production. Server DRAM shipments will maintain high demand until the fourth quarter, and the annual server DRAM price will increase by more than 40%.