According to the Macleans Report updated by IC Insights, a world-renowned semiconductor analysis organization, DRAM prices have soared 41% in the first eight months of this year, from an average selling price (ASP) of US$3.37 in January to US$4.77 in August. In September, DRAM ASP fell 3% to US$4.62, still an increase of 37% from the beginning of the year (as shown in the figure below). 2019 is a relatively difficult year for DRAM, with ASP falling 44%, but there has been a strong price increase and market rebound in 2020. However, the epidemic that broke out this year cast a shadow over the development of this market segment.
Since the beginning of this year, vaccines have been gradually approved in various countries, and the economy has gradually recovered. In the first three quarters of this year, DRAM suppliers are scrambling to meet the pent-up demand of all end-use market segments. Because buyers are eager to provide enough chip inventory for their systems, they buy in advance and order additional, which adds more momentum to price increases.
Specifically, PC and server manufacturers purchased a large amount of DRAM in the first half of this year to help ease potential manufacturing and shipping delays later this year. They are expected to reduce a large number of DRAM purchases in the fourth quarter of 2021 to consume existing inventory. PC and server DRAM prices are expected to fall by 0-5% in the fourth quarter of this year.
IC Insights also predicts that global shipments of next-generation 5G smartphones will grow to 575 million units in 2021. However, in view of the uncertainty of the holiday buying season and the expected low mobile DRAM prices next year, smartphone manufacturers are still cautious about buying too much DRAM and are expected to still choose to focus on reducing inventory supply in the fourth quarter of this year. IC Insights believes that this will keep the price of mobile DRAM flat in the fourth quarter of this year.
In some cases, the shortage of other semiconductor components has affected the pricing of DRAM. For example, some of the strongest demand for graphics DRAM comes from the graphics cards (graphics cards) used in notebook computers. In the last quarter of this year, a severe shortage of driver chips, power management chips and other peripheral circuits is expected to limit the production of graphics cards, thereby reducing the purchase of graphics DRAM. Therefore, the price of graphics DRAM is expected to drop by 0-5% in the fourth quarter.
The chart below shows the quarterly situation of the DRAM market and the substantial growth in the first three quarters of 2021. It is worth noting that after falling to a three-year low of $14.8 billion in the first quarter of 2020, the DRAM market has since rebounded significantly. DRAM sales in the third quarter of this year set the highest quarterly sales (US$26 billion) since the third quarter of 2018, and DRAM sales in the third quarter of 2018 reached a record high of US$28.2 billion.