© Samsung Electronics Production | January 08, 2020
DRAM contract prices to rise in 1Q20 says TrendForce
The consistent increase in DRAM spot prices since December and the power outage at Samsung’s Hwaseong fab on December 31, 2019 have not seriously impacted the supply side of the DRAM market, says the DRAMeXchange research division of TrendForce,
But on the demand side, memory buyers have furthered their willingness to build up inventories. Thus, TrendForce is again adjusting the 1Q20 DRAM contract price forecast from “mostly holding steady”, as previously reported, to “slightly trending upward”, indicating an earlier-than-anticipated kickoff of the cyclical upturn. In the PC DRAM segment, although negotiations over 1Q20 contract prices are currently underway, TrendForce predicts a high probability that prices of memory products shipped to PC OEMs will trend either flat or slightly upward. To avoid the potential increase of the U.S. tariffs on Chinese imports, PC OEMs rushed the shipments of notebook PCs to the U.S. market in 4Q19. Subsequently, notebook PC shipments during 1Q20 will be weaker compared to traditional seasonality. On the other hand, PC OEMs are under pressure to raise their memory inventories because DRAM suppliers are curbing their bit output. The YoY growth of the total DRAM bit output in 2020 is still projected to be less than 13%. Hence, PC OEMs are actively preparing for a supply-driven price hike in the near future. The power outage at Samsung’s Hwaseong base has only dialed up the sense of urgency. With the aim of building up a safety stock of DRAM modules in mind, PC OEMs in 1Q20 seem to be willing to accept prices that are the same level or marginally higher compared with the previous quarter. They may concede on price if DRAM suppliers are cooperative in raising product quantity. In the mobile DRAM segment, although consumer interest in 5G smartphones is growing in 1Q20, the supply of 5G chipsets is still quite limited. Also, smartphone makers usually dial back their demand for key components during the traditional off season. Hence, any 5G-related memory demand is not expected to be significant in the beginning of 2020. TrendForce previously forecasted a 0-5% decrease QoQ in contract prices of mobile discrete products and eMCP products for 1Q20. However, server DRAM and Graphics DRAM products are now expected to lead the general price rally, as their demand has been warming up since mid-December. As well, the recent tightening of supply in the NAND Flash market is helping to prop up prices of eMCP products. The positive sentiment in these two segments has spilled over into the mobile DRAM market. The latest forecast has therefore corrected mobile DRAM price trends from “slightly downward” to “mostly holding steady” for the period. Samsung produces most of its specialty DRAM chips on the 20/25nm processes at its Hwaseong-based fab Line 13, which was affected by the power outage. Moreover, contracts prices of specialty DRAM chips have been the first to feel the effects of the nearly month-long price upswing in the spot market. As a result, contract prices of specialty DRAM chips could rebound sooner than initially anticipated. For this first quarter, major customers (or tier-1 clients) that procure specialty DRAM chips through quarterly lock-in deals could see prices staying on the same level as in 4Q19. However, the average supply fulfillment rate of DRAM suppliers for quarterly deals related to specialty memory products is estimated to be under 60% for 1Q20. Most customers in the specialty DRAM segment had not proactively stocked up at the end of last year, so they entered 2020 with rather low inventories. Therefore, contract prices of most specialty DRAM chips will probably begin to register monthly rises starting from the first quarter. Moreover, double-booking from buyers could cause a further drop in the supply fulfillment rate. In light of these factors, contract prices for DDR3 and DDR4 memory products are projected to register a 0-5% QoQ increase in 1Q20. 1Q20 ASP trend forecast of DRAM products
For more information please visit TrendForce
|Application Category||ASP Increase in 1Q20 – Estimate|
|PC DRAM||Mostly flat|
|Server DRAM||Up 0 – 5 %|
|Mobile DRAM||Discrete & eMCP: mostly flat|
|Graphics DRAM||Up 5 – 10%|
|Specialty DRAM||DDR3 & DDR4 up 0 – 5%|
|Total||Low single-digit rise|
For more information please visit TrendForce
U.S. polysilicon makers laud Phase 1 of China deal The United States’ three remaining manufacturers of polysilicon expressed appreciation to President Trump and praised U.S. negotiators for securing the Chinese commitment to purchase U.S. polysilicon in the first phase of the U.S.-China trade deal.
Dupont explores divestiture of electronics unit Following its recent USD 26.2 billion deal to sell off its nutrition business, DuPont de Nemours Inc. is weighing a divestiture of its electronics unit, according to people familiar with the matter.
AMD bolsters exec leadership team AMD has announced several promotions and one new hire to its senior leadership team, in an effort to enable the company’s continued growth in the high-performance computing, graphics and visualization technologies market.
Webasto opens new battery centre in Jiaxing Webasto has inaugurated its new roof plant and battery center in Jiaxing (Zhejiang Province) close to Shanghai.
Panasonic to expand its manufacturing footprint in India Panasonic is looking to build a new wiring device factory in southern India. The new factory is scheduled to start production in autumn 2021, responding to the increased demand in the country.
Season Group strengthens wireless R&D & manufacturing capability Season Group has invested in, and installed, two high-speed and high-precision wireless communication testers - Rohde & Schwarz’s R&S CMW500 Wideband Radio Communication Tester and R&S CMW100 Communications Manufacturing Test Set.
Rocket Lab expands capabilities in So Cal Rocket Lab announced this week it will open a new facility to serve as its corporate headquarters and provide increased production capacity.
PCB Piezotronics unveils new clean rooms PCB Piezotronics Inc., a wholly owned subsidiary of MTS Systems Corporation, has announced the completion of environmentally controlled clean rooms at their DePew, New York facility.
European loudspeaker company brings production back home Difficulties manufacturing smaller design series among reasons for the decision to return back to base.
China only region to register pure-play foundry market growth Rise of China-based fabless IC suppliers offers increased opportunities for foundries, IC Insights states in a recent report.
Mycronic receives first SLX order Swedish production equipment specialist, Mycronic, has recieved their very first order of its mask writer SLX.
600 new German jobs as VARTA expands production again The lithium-ion battery market continues to experiencing growth, currently the market is poised to continue to move forward with an annual growth of about 30% – and VARTA wants a big piece of the pie.
FTG achieves S9100D certification at acquired PCB fab Firan Technology Group Corporation has completed and received AS9100D Certification from SAI Global Ltd. for its recently acquired PCB manufacturing facility located in Fredericksburg, Virginia USA (formerly Colonial Circuits Inc.).
Dutch block sale of technology, China miffed Following ASML’s denial of an export license by the Dutch government to sell a piece of critical chip-making technology to the Chinese, China’s ambassador to the Netherlands has issued a statement expressing his country’s displeasure.
DuPont aids S. Korea in photoresist shortage The office of Korea’s Ministry of Trade, Industry, Sung Yun-mo, met with DuPont President Jon Kemp last week to confirm DuPont’s investment in the country’s need for diversification of its EUV photoresist supply.
Volvo building U.S. battery assembly plant In preparation for bringing a new line of electric vehicles to the U.S. market, Volvo announced it will build a battery assembly plant at its existing facility in Ridgeville, South Carolina.
New game consoles expected to trigger demand surge for graphics DRAM and SSD's TrendForce expects the year-end release of new generation game consoles to trigger a demand surge of graphics DRAM and SSD's during the second half of 2020.
A new year begins with new machinery at Swedish Microwave In Motala, Sweden sits Europe’s oldest manufacturer of Low Noise Block down-converters (LNB) for the global satellite market, namely Swedish Microwave (SMW). The company is now kicking off 2020 with an investment in production.
Lucid eyeing April reveal of pre-production sedan Luxury EV manufacturer Lucid has announced that production is underway in Silicon Valley of 80 beta prototypes of its luxury sedan, Lucid Air, to be unveiled in April in New York City.
Ideal Industries moving the ball forward at Cree Following its March announcement that Cree had sold off the entirety of its lighting business to Ideal Industries in a USD 310 million deal, Ideal said it would remain dedicated to pumping investment dollars into the now privately-held Cree Lighting.
Former pSemi exec and CEO Jim Cable retires pSemi Corporation has announced the retirement of former CEO and long-term executive Jim Cable.
Rohde & Schwarz inks agreement to use Benchmark's muscles The German electronics group has signed a strategic agreement with US EMS provider, Benchmark Electronics, to enhance its manufacturing capacities.
Stoneridge appoints new VP of operations Stoneridge Inc. has announced Kevin Heigel as its new vice president of operations.
Gartner: Worldwide semiconductor revenue declined 11.9% in 2019 Intel reclaimed top spot in global semiconductor market; Samsung moved to no. 2.Load more news