DRAM pricing in 'free-fall,' claims market watcher

March 7, 2019 | 10:55

Tags: #component-pricing #dram #dynamic-ram #financial #intel-cpu-shortage #memory #price #pricing #ram #spot-price

Companies: #dramexchange #trendforce

The price of memory components has seen its biggest decline since 2011, dropping nearly 30 percent in the current quarter, according to market watcher TrendForce.

This time last year, anyone looking to upgrade their computer faced a steep bill on DRAM and NAND flash parts: SK Hynix warned that supply was failing to meet demand and that pricing was unlikely to improve in the short term, while Apple chief financial officer Luca Maestri predicted that pricing would peak around the end of 2018.

While both SK Hynix and Apple were discussing spot prices on components, rather than retail pricing, things have undeniably been improving over the past year: Retail pricing for a Corsair 16GB (2x8GB) kit of DDR4 memory on Amazon has fallen from a high of £195.08 in January 2018 to just £104.94 today, and the same can be seen across other brands with a slower 2,400MHz Crucial kit having fallen from a February high of £155.99 to £89.97.

That retail pricing drop reflects a drop in spot pricing for DRAM components, which industry watcher TrendForce's DRAMeXchange division claims is the largest recorded for a single season since 2011 at a whopping 30 percent for the current quarter. The reason: a severe, and growing, inventory overstock, not aided by Intel's ongoing CPU supply issues.

Now may not be the best time to be buying a wodge of RAM, though. 'According to the most recent market observations, inventory levels have kept climbing ever since overall contract prices dropped in the fourth quarter of last year, and most DRAM suppliers are currently holding around a whopping six weeks' worth of inventory (wafer banks included),' DRAMeXchange's analysis claims.

'Meanwhile, Intel's low-end CPU supply shortage is expected to last until the end of 3Q19, and PC-OEMs are unable to carry out the consumption of DRAM chips under demand suppression. The overall market has thus entered free-fall, meaning that large reductions in prices aren't going to be effective in driving sales. The excessively high inventory will continue to cause down-corrections in prices this year if demand doesn't make a strong comeback.'

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