Prices in the contract memory market in May have not changed compared to the previous month, according to the publication Business korea with reference to analysts from DRAMeXchange. At the same time, experts predict an 11 percent increase in prices for DRAM in the second quarter.
According to analysts, in the third quarter the increase in memory prices relative to the first quarter of the year will slow down, as the market will be oversaturated with offers, and the demand for chips in the data-cent sector will begin to decline.
The contract price of 8 GB memory modules in May amounted to $ 28.5 (+1% in monthly terms), the price for 32 GB DRAM DDR4 server modules remained unchanged at $ 143.2. By the way, the cost of 64-gigabit NAND MLC chips also did not change and amounted to $ 3.2. As contracts for memory are quarterly, price fluctuations in May were not very noticeable. Analysts note that at the moment there is an increase in the supply of DRAM.
According to experts, OEMs have 8–10 weeks of DRAM for PCs. In April, this indicator for the reporting period was 6–8 weeks. In the third quarter, due to a glut of the market, the rise in memory prices will slow down and remain unchanged.
Samsung Electronics plans to increase production of DRAM memory on the 1st and 2nd lines of the factory in Pyeongtaek to 30 thousand plates per month. At the same time, the company reduced the production of 10-nm memory of the first generation class (1Xnm) to less than 40% of the total volume, while increasing the production of memory of the second (1Ynm) and third (1Znm) generations. It is expected that the share of 1Znm memory production of the total volume by the end of 2020 will be 10%.
SK Hynix increased production at its Chinese C2F plant in Wuxi to 30,000 wafers per month. The production volumes of 10-nm second-generation memory (1Ynm) are projected at 30% of the total by the end of the year. In the third quarter, the normalization of the production process of 10-nm memory of the third generation of memory (1Znm) in Micron is predicted.
Analysts do not predict a significant increase in the production of NAND flash memory. According to the results of the third quarter, the contract value of these chips is expected to remain. The volumes of deliveries are most likely not to increase either. Analysts believe that the reserves of this type of memory are only two weeks away, while the stocks of 2D NAND-memory companies Samsung and SK Hynix in recent years, mainly only declining. To maintain profitability, SK Hynix does not plan to increase the production of new NAND memory in 2020. As for Western Digital and Kioxia, to ensure demand in the SSD market, companies focused on the production of 96-layer memory (it is cheaper to manufacture), leaving the output volume of 112-layer memory at their joint factory K1 unchanged.
Instead of increasing output in the first quarter of the year, Micron focused on the transition to a new manufacturing process. Intel also has no plans to increase NAND memory production in 2020. Instead, she intends to switch to a 96-layer process technology and increase the market share of her QLC products. Also in the second quarter, Intel is going to establish production of test samples of 144-layer memory.
Due to the transition to the remote mode of operation due to the coronavirus pandemic and, as a result, the increased demand for cloud services in the first quarter of 2020 increased investments in the development of data centers, analysts say. So, the prices for server-side DRAM-memory in the second quarter of the year increased by 20% in monthly terms. At the same time, it is predicted that, as a result of the second quarter, there will be a decrease in investment in this market segment. Downward directions have already been expressed, for example, by the heads of Google and Intel.
The demand for memory in the mobile segment (including the smartphone market) in the first quarter showed very slow growth. Analysts believe that according to the results of the second picture will be much better. Having partially solved the problems with COVID-19, the Chinese government, with the help of local companies, is actively developing the 5G wireless network infrastructure. To date, Huawei in China has already installed 200,000 5G base stations. By the end of the second quarter, it is planned to install another 600 thousand stations.
Experts are also optimistic about sales of the upcoming iPhone 12 smartphone series, which Apple is expected to start selling in September. In their opinion, sales volumes will be higher than those of the iPhone 11. Forecast DRAMeXchange speaks in favor of 68 million devices sold, which will correspond to an 11 percent increase in annual terms compared to last year’s iPhone 11. Sales estimates are based on estimated cost and design changes compared to past models. Also positive factors are screens attributed to devices with a refresh rate of 120 Hz and a LiDAR sensor. According to experts, the manufacturer of components for iPhone smartphones, TSMC recently received an additional order from Apple.
Thus, analysts say that the growth in demand in the mobile segment will be able to compensate for the slowdown in demand in the data center sector in the second quarter of this year.
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