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The DRAM Shortage Is Only Going To Get Worse
Quote:According to IC Insights, even though DRAM prices have more than doubled (+111%) over the last 12 months, they will only continue to increase. IC Insights predicts that by the end of the calendar year the DRAM's price per bit will have jumped a record 40% (or more).

Things change quickly in the DRAM market; just last year we were amid an oversupply that brought low prices for your favorite kits. Unfortunately, IC Insights claims the oversupply was one of the contributors to the latest price hikes. Greedy wholesalers gobbled up stock during the oversupply at low prices, but then sat on the stockpiles as the shortage deepened. Now, the wholesalers are cashing in on their bets and reaping the benefits. Meanwhile, enthusiasts can expect to pay top dollar for the latest blinky RAM kits.

Of course, the record pricing levels are great for our friends at the major foundries. Samsung, Micron, and Sk Hynix are also raking in their own record piles of cash and enjoying healthy margins. We have both DRAM and NAND shortages occurring at the same time, which is great for the foundries, and unless a player breaks ranks to gain market share, we can expect more foot-dragging before any of the foundries increases output.

The booming mobile industry and server markets are exacerbating the issue, so you would expect that the fabs would boost DRAM output. Unfortunately, the three primary fabs (Micron bought Elpida, reducing the number of players) don't share the same vision.

Micron indicates that it will not increase production capacity to satiate our RAM desires, instead relying upon mundane improvements in yields and shrinking down to smaller nodes to boost its DRAM bit output. Sk Hynix has expressed its desire to boost DRAM output but hasn't set a firm timeline for fab expansion (unlikely to occur in the near term). Samsung is as tight-lipped as usual, so we aren't sure of its intentions.

In the 1980's there were 23 major DRAM suppliers, but cutthroat pricing and continual oversupplies eventually led to the wave of consolidation that left us with the current three suppliers. Due to the nature of the DRAM oligarchy, Sk Hynix's plans could be the catalyst for future DRAM expansion at Samsung and Micron. Unfortunately, due to the complexity of today's latest DRAM nodes, these capacity expansions usually require an extended amount of time before the price reductions trickle down to us. We can expect a six month ramp time for an existing fab to reallocate space to DRAM production, or a two year process to build an entirely new fab.

In other words, if you plan on a new build in the near future it might be best to grab a RAM kit now before the prices increase further. Unless the dynamics of market demand change drastically we can expect the shortage to worsen over the next six months, and possibly longer.
To be clear, the conclusion is TPU's, not DRAMeXchange's. DRAMeXchange's view is that the DRAM manufacturers are conservative on their future capital expenditures. But that sounds like an excuse to me, since we've not had a shortage this severe in who knows how long.
Quote:However, what started with simple insufficient output that could contain the explosion of DRAM capacity in smartphones seems to now be turning into a conscious decision by the three top memory manufacturers. Samsung, Micron, and SK Hynix are seemingly setting output at a lower than required level so as to artificially inflate pricing due to low supply. TrendForce themselves say so, in that these suppliers "(...) have opted to slow down their capacity expansions and technology migrations so that they can keep next year's prices at the same high level as during this year's second half. Doing so will also help them to sustain a strong profit margin."
Maybe there's hope:
Quote:It's only in the second half of 2018 when end-users could expect Samsung's increased DRAM output to have any effect on prices of PC memory. The PC industry is not the only consumer of DRAM, as a larger share of it is consumed by the mobile industry (smartphones, tablets). DRAM inventories have been under tremendous strain over the past three quarters, which have forced PC memory prices to surge by 80-100 percent and beyond.

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