Contract prices for mainstream DRAM chips plummeted 10 percent month-on-month last month amid unresolved oversupply and flagging seasonal demand, boding ill for the memorychip industry’s outlook this quarter, market researcher TrendForce Corp (集邦科技) said in a report on Thursday.
DDR4 8GB products sank to US$25.50 per unit last month from US$18.50 in June, TrendForce said.
The dramatic decline was a major contrast to the aggregate price hike of 24 percent since early last month on the spot market amid concern over production disruption due to Japan’s restrictions on key semiconductor exports to South Korea, TrendForce said.
Japan’s export restrictions appear to have had a limited effect on DRAM production and failed to boost contract chip prices as, among the three key materials, only hydrogen fluoride is used in DRAM and NAND production, it said.
Even though Japan holds a 60 to 70 percent share of the global market for hydrogen fluoride, semiconductor manufacturers could still acquire it from suppliers outside Japan, TrendForce said.
Samsung Electronics Co and SK Hynix Inc still have stockpiles that could be used for production for about two-and-a-half months, the market researcher said.
That indicates that a disruption in production might not be seen in the short term, it added.
The researcher said it expects the trade tensions between Japan and South Korea to ease this quarter, given that South Korean chipmakers were not entirely barred from importing materials.
They only need to obtain approval for imports by passing a review that takes 90 days at the most, it said.
As the supply glut remains in place, TrendForce expects the price hikes on the spot market to be short-lived and the DRAM industry’s prospects to remain bleak this quarter.
The world’s major DRAM chipmakers have inventories of between three and five months as of present, TrendForce data showed.
Although some manufacturers pledged to cut production to cope with the slump, the reductions proved to be insignificant as they mostly came from the phasing out legacy technology or migrating to next-generation technology, it said.
Meanwhile, PC and mobile phone shipments for this year are forecast to shrink 4.1 percent and 5 percent year-on-year respectively, while server shipments could be flat from last year rather than a previous estimate of 3.9 percent growth, TrendForce said.
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