The surplus of DRAM and NAND flash memory has dramatically improved since the third quarter, with the oversupply ratio likely to turn negative as early as the fourth quarter, according to industry observers.
The market oversupply improvement has resulted from output curbs by major industry players, such as Samsung Electronics and Micron Technology, the observers said. The chip prices are set to bottom out, but how quickly they will begin to rise still depends on demand.
At the end of the second quarter, a surge in short lead-time orders from PC OEMs partially replenished DRAM inventory, but the overall end-market demand uncertainty still delayed the finalization of July contract prices, the observers indicated. Both contract prices for 8GB DDR4 (1Gbx8) chips and 8GB DDR4 modules dropped by 1.5%.
On the contrary, contract prices for 16GB DDR5 modules rose 3-4% in July, with the prices poised to rise in the third quarter, the observers said. DDR5 spot prices have already taken the lead in adjusting upward, thanks to the incremental improvement of DDR5 overclocking performance, the upgrading of new product specifications prompted by AI computing, and the rise in cloud application adoption.
As for server DRAM prices, lackluster general-purpose server demand continued to dragged down the memory contract prices in July amid the ongoing inventory adjustments at OEMs, the observers said. July contract prices for 32GB server DRAM modules fell about 3%.
July contract prices for 2Gb DDR3 memory also slid 3%, as a result of the still sluggish demand for consumer electronics products, according to the observers. DDR3 is the DRAM type with the greatest inventory adjustment pressure.
Prices for embedded memory devices, particularly high-end UFS 4.0 and LPDDR5, have steadily stabilized and look to be rising, the observers indicated. Despite a pessimistic view for handset demand in the second half of this year, brand vendors have kept inventory levels reasonably low.
In addition, AI servers have recently boosted demand for high-bandwidth memory (HBM), the observers noted. DRAM bits will be digested by major memory manufacturers during process transitions or when AI servers drive higher SSD demand. Although memory costs have stopped falling, the focus is on how rapidly inventory is digested, and meaningful recovery will occur only when customers are willing to step up their pace of orders, the observers said.
Article translated by Jessie Shen
