I suspect that with AMD releasing Kabini, Richland and Intel Haswell, there is an increase in OEM demand for RAM. This may cause retail RAM prices to increase slightly but if the DRAM makers get greedy as before, then consumers will just stop buying over-priced DRAM. The DRAM makers have been living high on the hog for years now with inflated DRAM prices.
In the first half of April the DRAM price rally increased its pace so that the contract price of the most popular DDR3 4GB memory modules increased by up to $2.5 in two weeks. Despite of awful PC sales in Q1 2012, PC makers have begun restocking amid shrinking production of dynamic random access memory, which bolstered contract prices.
4GB Module’s Average Contract Price Hits $25.5
In the first half April contract price of 4GB DDR3 memory module increased by 8% to $25.5 - $26 per unit (from $23 in the second half of March), according to DRAMeXchange. A 2GB DDR3 memory module cost $14.75 on an average contract basis, an increase of over 5% in two weeks. The contract price of 4Gb DRAM IC capable of running at 1333MHz/1600MHz was $2.88 in the first half of April, whereas the DDR3 2Gb chip cost $1.44.
At press time, one untested [eTT] 2Gb DDR3 chip cost $1.54 on average at Taiwan's spot market, 2Gb DDR3 1333MHz/1600MHz chip's price was approximately $1.726/$1.705, whereas 4Gb DDR3 1600MHz memory IC was priced at $3.335 on average on the spot market.
The current price increases mark the fifth consecutive month of DRAM price growth, and a historical high of $30 per 4GB DDR3 module is not far off.
Revenue of Global Memory Market May Hit $34.6 Billion in 2013
In recent years, the constant state of oversupply in the global memory market has taken a toll on not just PC DRAM prices, but also those of the more profitable server and mobile DRAMs. Even with the annual growth in production volume, the DRAM industry’s total revenue has experienced a yearly decline since 2010. During 2012, 2Gb DRAM prices dropped to as low as $0.6, whereas overall DRAM revenue shrunk to approximately $26.5 billion.
The long term losses suffered by the industry had been severe enough to prompt first-tier DRAM manufacturers to lower their capital expenditures, encourage firms like Elpida to merge with Micron, and force a large majority of Taiwan’s manufacturers to pull out of the DRAM market.
Following the lowering of DRAM output and the various delays experienced in the technological migration processes, DRAM bit growth saw a negative revision last year and dropped to less than 30% (a far cry from the traditional 50% growth observed in previous years).
In an attempt to adapt to the changing demands within the end-market, more and more DRAM makers are shifting their attention from PC DRAM to mobile DRAM. While the resulting technological migrations have contributed to an overall increase in DRAM bit growth, new production capacity has yet to be spotted.
The DRAM price situation arguably took a turn for the better in 2013, when market supply and demand gradually returned to healthier levels. The reduced production of PC DRAM has spurred a series of upward price movements, which not only allowed mobile DRAM prices to remain steady, but also led to an increase in server DRAM prices.
Assuming that supply volumes undergo little change, TrendForce forecasts that the DRAM ASP (average selling price) will show a growth of at least 6% during 2013, and that the industry’s overall revenue will rise to approximately $34.6 billion (a growth of 30% compared to the previous year). Due to the popularity of smartphones and tablet PCs, the growth in the output value for mobile DRAM is expected to increase by 31% from last year.
The overall price growths in DRAM products is likely to help many DRAM manufacturers recover from the losses incurred from previous years. As the Korean manufacturers have successfully transitioned to 2Xnm manufacturing processes, their profitability prospects are expected to be relatively better. On the whole, the financial prospects look bright for DRAM manufacturers as the adjustments experienced by the industry come to an end.