DRAM Prices Forecast to Drop Over 5% QoQ in Q1

Industry executives forecast dynamic random access memory (DRAM) prices to slump over 5% quarter over quarter in Q1, 2015, deeper than in Q4, 2014, due to low season factor.

Although the declines will impact sales at Taiwan's DRAM chipmakers including Nanya Technology Corp. and Inotera Memories Inc., and the market as whole is forecast not to be as bullish this year as last year, industry executives remain optimistic about the outlook this year.

They say that although the prices will drop more than 5% in Q1, compared with less than 5% in Q4, 2014, the decline remains moderate.

Prices for DRAMs for PCs and consumer electronics are among the memory chips to decline steeper than those for mobile devices due to low season factor. Server DRAMs, in contrast, are projected to buck the downtrend, with DDR 4 types leading the way to shore up average selling price of the chips.

DRAM chipmakers will count on the next-generation Apple iPhone to drive sales after the low season, with two gigabyte replacing one gigabyte as the mainstream DRAM specification in the smartphones.

Industry executives say DRAM chips for mobile devices account for over 30% of DRAM sales as the commodity with the biggest sales share as a whole. Accordingly, the supply and demand will be in balance or with slight supply shortage if the present DRAM spec remains unchanged in the next-generation Apple iPhone, with the shortage to worsen if the spec is upgraded.

They forecast the new iPhone to buoy DRAM prices if a new DRAM spec is adopted, and while  Samsung is expanding capacity, such price increase is unlikely to have much affect on the market balance since the rate of rise is still moderate.

(KL)