Contract prices for server DRAM memory are expected to hit bottom between the fourth quarter of 2022 and first-quarter 2023 and then start recovering, according to industry sources.
Order pull-ins from cloud server vendors and other server companies have been slow amid lackluster end-market demand, the sources indicated. Server DRAM contract prices, which fell as high as 10% in November alone, are poised to fall 20-30% in the fourth quarter.
Another factor behind the anticipated 20-30% price fall is that chipmakers offer low prices for one-year contracts to attract orders from cloud server customers, the sources noted. The chip suppliers have also proposed low prices for enterprise SSDs to simulate shipment pull-ins, which also will likely result in a more than 20% fall in enterprise SSD contract prices in the fourth quarter, the sources said.
On the other hand, falls in PC DRAM contract prices started decelerating in November, the sources said. Major DRAM suppliers, such as Micron Technology, intend to scale down their output to stop prices from falling further. Those DRAM suppliers' output cutbacks may begin to reflect on the overall contract market prices in the first half of next year, the sources noted.
Micron disclosed previously an approximately 20% cut each in its DRAM and NAND flash wafer starts, with plans to make another downward adjustment to its capex outlook for fiscal 2023. The US vendor is scheduled to hold its fiscal first quarter earnings conference call on December 21.
Taiwan-based DRAM maker Nanya Technology has reported November revenue slipped 0.4% sequentially to NT$2.77 billion (US$90.73 million). Nanya's revenue for the first 11 months of this year totaled NT$54.55 billion, down 30.7% from the same period in 2021.
Nanya slashed its capex target this year to NT$22 billion from the NT$28.4 billion set previously, after posting a nearly 60% sequential drop in net profits for the third quarter. The firm also expects its capex for 2023 to be no more than NT$22 billion, with spending on manufacturing equipment o be over 20% below the year-ago level.
Article translated by Jessie Shen
