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© bernardo varela dreamstime.com Analysis | July 15, 2014

2H’June DRAM contract prices remain flat

The DRAM contract prices stayed relatively flat in 2H’June, according to DRAMeXchange, the memory and storage research division of TrendForce.
The 4GB average contract prices remain unchanged at US $30.5, while individual chip prices are estimated at approximately US $3.5. The individual contract chip price is still roughly 18% lower than the market spot price for DDR3 4Gb 512Mx8 1600MHz, which is approximately US $4.255.

With PC DRAM supplies tightening, the majority of first tier PC OEM manufacturers and industry suppliers have started to resort to quarterly deals, pointed out DRAMeXchange Assistant Vice President Avril Wu. Based on the fact that pricing movements for 3Q14 have already been confirmed --the DRAM contract prices are currently expected to move towards US$31-32 --the market prices in general are likely to start pick up momentum in July.

Most of the contract markets transactions are anticipated to be settled on a quarter by quarter basis, with only a few PC-OEMs required to negotiate prices on a monthly basis. With DRAM supplies remaining tight, contract prices for both July and August are likely to rise past US $33 at one point.

Wu further stated that it appears DRAM manufacturers will have limited resources to support PC DRAM production capacity as smartphone sales peak season arrives in third quarter 2014. Given the existing technological migrations that are taking place in the industry and the continuous improvements to production yield, the PC DRAM market shortage has become increasingly more noticeable in recent periods.

The market price movements in the future will ultimately depend on the type of product portfolio that DRAM makers will utilize, and whether DRAM makers will choose to increase capacity as a means to ease market shortage. With new capacity unlikely to be added during 2H14, and with market demands gradually heating up, DRAM prices in the second half of the year are likely to show continuous growth.

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