Even though slightly improved demand towards dynamic random access memory (DDR3) got slightly higher during the back-to-school (BTS) season and some memory chips got slightly more expensive, pricing of other either remained flat or continued to decrease. The contract prices of generic 4GB DDR3 memory modules in Taiwan decreased below $20 in the second half of September.
DRAM Pricing Flat in September
According to DRAMeXchange, a memory market research division of TrendForce, due to an overall increase in spot market price since mid-September, average selling price (ASP) of 2Gb DDR3 1333MHz chips rose from $1.1 to $1.2, or by approximately 9.1%. ASP of 2Gb DDR3 ETT chips saw an even greater 17% increase, arriving at $1.1.
The situation on the spot market affected contract price negotiations for the second half of September and DDR3 2GB module contract price was set at $10.50. DDR3 4GB contract price has fallen below the $20 threshold, decreasing by 4.88% to $19.50 due to DRAM makers’ actively pushing this density into mainstream PCs.
From the market perspective, since contract price showed signs of stabilization in the first half of September, the spot market looks as if it the downward price trend has nearly bottomed out and whether buyers are eager to purchase. Furthermore, with increased demand from China’s upcoming October 1 National Day, the spot market is seeing a fresh wave of inventory replenishment, resulting in a nearly 20% increase in spot chip price. As for contract price, affected by the invigorated spot market, PC OEMs’ relatively low inventory levels, and inventory replenishment in September, DRAM makers kept price quotes flat.
TrendForce expects notebook DRAM content per box to gradually increase, arriving at 3.7GB per unit in Q4, a 5.8% QoQ increase. As the market currently remains in a state of oversupply, whether or not DRAM price will continue to experience such momentum will depend on future market demand.
DDR3 4Gb Chips May Become Mainstream in 2012
While DDR3 2Gb chips are the DRAM market mainstream in 2011, with the rise of ultrabooks and cloud applications in 2012, DRAM makers are already expecting strong demand for DDR3 4Gb and have consequently accelerated the transition to the higher density chips. In particular, ultrabooks will require higher density memory and cloud servers will ramp up adoption of 32GB memory modules.
In order to make 4Gb memory chips cheap enough for mainstream market, manufacturers of DRAMs have to use 30nm-class process technology for their manufacturing.
Samsung began mass production of mainstream 4Gb DDR3 chips in Q2, Hynix plans follow at the end of Q4. Elpida is also manufacturing mainstream 4Gb DDR3 chips already; furthermore, as subsidiary Rexchip will enter DDR3 4Gb mass production in Q4, the Japanese team’s capacity will increase significantly in the first half of 2012. Micron's 30nm process technology is currently in the testing phase and expected to begin mass production in the first half of next year. Nanya and Winbond are on the same schedule as Micron.
As all DRAM makers are eagerly transitioning to DDR3 4Gb production, TrendForce expects the higher density chip to become the mainstream specification in the second half of 2012. However, the rate at which manufacturers make the switch and the quality of their chips are key factors that will determine makers’ profitability.