Trendforce forecasts a five per cent or greater decline in DRAM contract prices in 2018’s fourth quarter following a 1 to 2 per cent rise in the third quarter. The expected price fall will bring to an end to nine consecutive quarters of price rises. NAND prices are expected to fall even more steeply.
Trendforce notes soft demand for server DRAM and thinks average DRAM prices could drop 15 – 20 per cent in 2019. The price drop could be even steeper if demand for servers and smartphones weakens further, the market research firm says.
DRAM price falls are attributed to weak smartphone shipments, low server demand, and PC and notebook demand squeezed by Intel CPU shortages. These three factors could lead to DRAM over-supply in 2019.
Trendforce expects 2019 annual bit output to increase by nearly 22 per cent, with the 1X/1Y nm processes becoming mature and wafer starts increasing, although manufacturers have become more conservative in capacity expansion.
NAND prices have already started falling with a 10 per cent decline in the third quarter, and a 10 – 15 per cent fall expected in the fourth quarter. Trendforce says 3D TLC (3 bits/cell) chip contract prices may fall more steeply than 15 per cent in the fourth quarter.
For 2019 a potential 25 – 30 per cent price fall is on the cards due to increased 3D NAND production capacity. It sees sluggish demand for flash in the consumer electronics sector and strong demand for enterprise SSDs, but vendor competition and improved yield of 64-layer and 72-layer 3D NAND chips from wafer starts will put a crimp on prices.
Demand in the first 2019 half year will be seasonally weak and could be affected by US-China trade war. Trendforce says suppliers could moderate their transition to higher output 96-layer and estimates overall NAND production capacity of NAND will grow 5 per cent annually by the fourth 2019 quarter. It expects memory makers to revise their output spending plans downwards.