TrendForce Corp (集邦科技) yesterday raised its outlook for the DRAM industry, saying that contract DRAM should increase by a single-digit percentage this quarter from last quarter, rather than continuing last year’s downward trend as was estimated previously.
The DRAM industry is experiencing “a new cyclical upturn earlier than expected,” TrendForce said in a report.
A brief disruption in production — caused by a power outage at Samsung Electronics Co’s factory in Hwaseong, South Korea, on Tuesday last week — has stimulated demand and is buoying chip prices, the Taipei-based researcher said.
It has also “boosted DRAM chip buyers’ willingness to build up inventories,” although the production disruption did not significantly reduce the chip supply, it said.
In addition, an upturn in contract DRAM chips is taking a cue from price hikes on the spot market, TrendForce said.
PC DRAM chip prices this quarter are highly likely to rise due to increasing supply constraint risks, despite chip demand waning after most notebook computers were shipped to the US in the last quarter, it said.
This year, PC makers expect the chip supply to grow at a mild pace of 13 percent annually, pushing PC DRAM prices higher, the researcher said, adding that the Samsung incident has added to supply concerns.
PC makers are willing to endure higher prices to build safer inventories, it added.
Mobile DRAM chip prices this quarter could flatten, possibly declining 5 percent quarterly, as the slow rollout of 5G-enabled smartphones would limit demand for 5G chips, TrendForce said.
This quarter, special DRAM DDR3 and DDR4 — used mostly in consumer electronics — should see earlier-than-expected price increases of zero to 5 percent quarterly amid supply concerns, it said.
Samsung produces most of its specialty DRAM chips on a production line at the Hwaseong plant, it said.
Server DRAM prices this quarter are expected to rise by zero to 5 percent quarterly, while graphics DRAM prices might increase 5 to 10 percent, TrendForce added.
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