According to TrendForce, DRAM and NAND Flash prices are expected to fall further in the second quarter of 2023 due to weak server shipments and high inventory levels.
As DRAM and NAND flash production cuts have not kept pace with decreasing demand, TrendForce predicts that average selling prices (ASP) for a variety of products will decrease further in the second quarter. DRAM prices are anticipated to decrease by 13-18%, while NAND flash memory prices are predicted to fall by 8–13%.
As PC DRAM, server DRAM, and mobile DRAM account for over 85% of DRAM usage, high DDR4 and LPDDR5 inventory levels were primarily responsible for the significant decline in DRAM pricing, TrendForce indicated. DDR5's market share also remains quite low.
DDR4 is abundant, so transaction volume has not increased despite suppliers' urgent efforts to reduce inventory. DDR5 prices, on the other hand, are decreasing at a much slower rate than DDR4 prices due to more limited supply, TrendForce said. In the second quarter, the ASP for PC DRAM is anticipated to decrease by 15% to 20%.
Weaker server demand has raised DDR4 inventory pressure on suppliers, with quarterly price decreases reaching 18–23%. DDR5 supply has also been constrained due to PMIC compatibility issues, limiting the price decrease for server DRAM to 13-18% in the second quarter. However, because DDR5's market share remains low, its impact on price changes is limited, implying that the overall price drop for server DRAM in the second quarter will remain between 15–20%, TrendForce said.
Smartphone manufacturers have now completed inventory adjustments, indicating a stronger purchasing impulse than last year. However, inventory pressure on suppliers remains high, increasing the likelihood of discounts. Buyers have been combining their third-quarter and second-quarter demand to boost bargaining power, resulting in a 13-18% decline in mobile DRAM ASP in the second quarter, according to TrendForce.
NAND flash is primarily affected by enterprise SSD and UFS price declines, and the market's oversupply situation remains unresolved. These two product categories consume over 50% of all NAND flash memory, TrendForce said. Both enterprise SSD and UFS device ASPs are expected to drop 10–15% in the second quarter.
