DRAM spot price has been falling since April and will continue to show a downward trend in May and June, which will further drag down the memory contract price in the second quarter.
In the past month, the spot price of mainstream 8GB DDR4 chips fell by 6-10%, which was relatively small in March and was in the middle single digits. In the first quarter of 2022, sales totaled US $151.7 billion, with a year-on-year increase of 23%. However, although the semiconductor market remains in short supply, the price of DDR3 chips has also fallen by about 7% since April.
The prices of memory modules and SSDs fell to varying degrees. Source: Flash Market
The source said that DRAM chip manufacturers will continue to control output growth to maintain price stability, but PC OEMs intend to take a wait-and-see attitude in the case of increased demand side uncertainty.
The reason for DRAM price decline is mainly due to the continued demand uncertainty and supply chain disruption caused by the restrictive measures caused by the COVID-19 in China. PC OEMs may regain the bargaining power at the end of may at the earliest to negotiate price reduction.
Although orders from the server sector showed signs of slowing down in April, the demand for cloud computing and server applications continued to outperform other device applications. The financial report recently disclosed by AMD also shows that cloud computing has become a strong driving force for the company’s business growth, and after the acquisition of Xilinx, it continues to increase its acquisition of pensando with about US $1.9 billion, thereby enhancing AMD’s competitiveness in the data center.
Hon Hai, quanta, Weiying and Yingyeda also look forward to the growth momentum of cloud business this year. Liangzizhen, vice chairman and general manager of Guangda, said that the demand for servers this year is still good. Wei Ying believes that from the demand side, there is not much change at present. In addition, cloud service providers (CSPs) are optimistic about the continuous growth of cloud service expenditure. In the post epidemic Era, returning to the office and back to school has become the main axis, and they are optimistic about cloud demand applications. Therefore, as of Q1 2022, the overall memory chip demand of server applications has maintained a stable growth.
In the first quarter of this year, the demand for servers drove the growth of DRAM and NAND flash memory sales of Samsung Electronics. The sales of DRAM for servers of Samsung storage chip suppliers hit a record high in the first quarter of 2022. Although the inventory of some customers has been adjusted, the sales of NAND flash memory used by Samsung for servers continue to grow steadily.
Sources believe that Samsung is expected to continue to focus on server products and other high-density and high value-added devices to maintain its average chip price for the rest of 2022.
As equipment assemblers also experienced supply chain disruptions in China, shipments of original equipment manufacturers and other contract manufacturers fell sharply in April.
It is expected that the spot prices of DRAM and NAND flash memory will continue to show a downward trend in the second quarter of 2022, which urges channel distributors to remain conservative and sell inventory at a price lower than the purchase price. Downstream memory distributors expect that the spot price of memory will continue to fall in the second quarter, so they begin to sell memory chips and devices at a price lower than the purchase price.
Memory module manufacturers in the market are also preparing for the loss of chip inventory value. It is expected that the DRAM contract price will show a single digit month on month decrease in the second quarter, which was previously estimated that the price increased slightly.
As for the spot price of NAND flash memory, the price of 3D TLC NAND flash memory has fallen by about 6% since April due to the sluggish demand in the terminal market. Sources said that the prices of SLC and MLC NAND chips in the niche market continued to rise, but the growth rate was lower than that in the first quarter.
However, as the global supply is still affected by the decline in the output of the joint venture factory of Kaixia and Western Digital in Japan, the contract price of NAND flash memory is expected to increase by about 5% month on month.
As for when the price decline will end, some manufacturers pointed out that the demand in the downstream market is still relatively strong. For example, network routers and Wi Fi 6/6e devices have great potential to promote the memory market; The inflection point of memory price mainly depends on when the domestic epidemic can end.