Prices of standard DRAM chips are to remain steady this month, as a Japan-South Korea trade dispute and the year-end shopping season would stimulate demand and improve inventories, TrendForce Corp (集邦科技) said last week.
PC makers have increased DRAM orders as Japan’s restrictions on key semiconductor material exports to South Korea might disrupt chip production and supply, the Taipei-based researcher said in a report.
Restocking demand in the third quarter was stronger than expected as PC and electronics makers rushed to buy DRAM chips before a new round of US tariffs on Chinese goods takes effect in December, giving support to DRAM prices, TrendForce said.
“DRAM suppliers became firmer when negotiating prices [for this month] as they found a positive shift in the demand-supply situation,” TrendForce said.
As a result, DRAM chip prices could stabilize in the third quarter, reversing a quarters-long decline, it said.
The average contract price for mainstream PC DRAM chips was flat at US$25.50 per unit in August, showing rare stability since a freefall of prices in the second half of last year, TrendForce said.
Positive outlook for the DRAM industry next year also helped bolster prices, the report said.
Global DRAM output is forecast to grow 12.5 percent annually next year, the slowest pace in the past decade as major suppliers cut capital expenditure to curb production and maintain profitability, the report said.
The top three DRAM chipmakers — Samsung Electronics Co, SK Hynix Inc and Micron Technology Inc — are each to reduce capital spending by at least 10 percent next year, with Samsung planning to maintain its total DRAM capacity at a similar level to this year, TrendForce said.
Major suppliers would use new facilities and equipment to upgrade technology rather than boost capacity, it said.
Meanwhile, China remains a distant threat next year, as Chinese chipmakers would account for less than 3 percent of global DRAM output, TrendForce said in the report.
ChangXin Memory Technologies Inc (CXMT, 合肥長鑫存儲) has already begun small-scale production. The Chinese chipmaker is turning out DDR4 8 gigabit (Gb) chips as its initial product and there is a possibility that it will launch its own LPDDR4 8Gb chips in the first half of next year as it works toward volume production, TrendForce said.
Fujian Jinhua Integrated Circuit Co (福建晉華) is smaller in scale and by the end of next year will be producing fewer than 10,000 wafers a month, the researcher said.
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