TrendForce: Server Demand Recovery Expected to Drive Q3 DRAM Prices Up by 8-13%
According to the latest survey by global market research firm TrendForce, the recovery in demand for general servers and the increased production share of HBM by DRAM suppliers have led suppliers to continue raising prices. As a result, the average price of dram is expected to continue rising in the third quarter. DRAM prices are projected to increase by 8-13%, with Conventional DRAM seeing a 5-10% increase, slightly lower than the second quarter's growth.
TrendForce notes that in the second quarter, buyers became more conservative about restocking, and there was no significant change in inventory levels for both suppliers and buyers. Looking ahead to the third quarter, there is still room for smartphones and CSPs to replenish their inventories as they enter peak production season. This is expected to drive up memory shipments in the third quarter.
PC DRAM Prices Expected to Rise by 3-8% in Q3
Considering the recovery in demand for general servers and the increased production share of HBM by suppliers, PC DRAM prices are expected to continue their upward trend in the third quarter, with average prices rising by 3-8%. This increase is lower than that of Server DRAM and less than the second quarter's growth due to high PC DRAM inventory levels and unchanged consumer demand.
Server DRAM Prices Expected to Rise by 8-13% in Q3
General servers will benefit from seasonal stockpiling in the third quarter. TrendForce predicts that this will push the contract prices for DDR5 Server DRAM up by 8-13%. Due to high average inventory levels for DDR4 among buyers, the focus on purchasing has shifted to DDR5, resulting in a higher increase compared to DDR4. The combined average contract price for both is expected to rise by 8-13%.
Mobile DRAM Prices Expected to Rise by 3-8% in Q3
Since the fourth quarter of last year, consecutive price increases for Mobile DRAM have posed significant challenges for brand profitability. Coupled with sufficient inventory levels, brands have slowed down their bargaining processes as they enter the third quarter, adopting a more passive negotiating stance. However, original manufacturers, aiming to cover profit gaps from previous quarters and anticipating tighter supply and demand next year, maintain an upward pricing attitude. This attitude might be tempered by the buyers' passive negotiation stance and high inventory levels, possibly compressing the third-quarter price increase. TrendForce forecasts a quarterly increase of 3-8%, with LPDDR4(X) showing the smallest gain and potential for further contraction.
Graphics DRAM Prices Expected to Rise by 3-8% in Q3
Overall demand for Graphics DRAM remains subdued in the third quarter. Price trends will mainly be influenced by other DRAM products. With strong factory engagement in the ongoing price hike cycle, procurement teams are more inclined to accept the proposed price increases by sellers. On the supply side, new GPUs entering the validation stage will lead to increased GDDR7 production. Currently, GDDR7 carries a 20-30% premium over GDDR6. As samples ship in Q3 2024, this will slightly push up the average sales price. Graphics DRAM prices are expected to increase by 3-8%.
Consumer DRAM (DDR3 & DDR4) Prices Expected to Rise by 3-8% in Q3
The overall Consumer DRAM market still shows an oversupply. However, the three major suppliers' capacity constraints due to HBM production and other suppliers not yet returning to profitability create upward price pressure. Thus, prices are expected to maintain a slight upward trend.
Outlook for Q4
Looking ahead to the fourth quarter, smartphone and CSPs will continue to have replenishment needs, coupled with an increased production share of HBM by suppliers, supporting continued price increases. As the year-end approaches, both buyers and sellers will formulate procurement strategies based on current supply and demand expectations for 2025. Therefore, TrendForce does not rule out the possibility that buyers will continue to increase inventory to prepare for potential shortages caused by the higher production share of HBM in 2025.
