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The End Of The DRAM Shortage?
Quote:This 5% drop in pricing has prompted industry analysts to review their profit estimates for 2018, and expect that the memory industry's growth rate will fall by more than half this year to 30 percent. You read that right - investors are scared because growth rates will be 30 percent instead of 60 percent. Oh the joys of inflated pricing, and slower-than-usual ramp-up to keep demand higher than supply. The joys of economic capitalism, where prices for consumers go up, and an industries' value skyrockets by more than 70$ in a single year (2017).

This news led to a knee-jerk reaction from investors and the stock market for memory manufacturers as a whole, though; Samsung shares dipped 7.5 percent last week, while SK Hynix's fell 6.2 percent (January 6th seems to be the tipping point). But analysts say that there is unlikely to be a sudden crash, and that 2018 should still be a relatively stable year for chipmakers. This is due to the ever increasing memory demands of smartphones - average DRAM memory of new smartphone models launched last quarter increased by 38 percent from the second quarter of 2016, while NAND content measured by gigabyte jumped a staggering 84 percent, according to an analysis by BNP Paribas, as reported by Reuters.
Quote:Again, we’re not here to make market predictions -- we don’t have a crystal ball -- but the longish-term graphs provided by PCPartPicker make the current DRAM price debacle seem like a (large) peak in a normal cycle. If things shake out the way they did in 2013 and 2014, 2018 will be a year of steady prices, followed by a decline in 2019. Hynix and Micron stock has loosely correlated with the price of DRAM over the past few years, and keeping an eye out for them in financial news should give a general idea of where prices are headed. It’s always possible that the bottom will fall out of the market and end the boom early, but RAM sticks probably aren’t going to become much cheaper this year.
Looks like China is throwing its weight around:
Quote:For some time now, anytime RAM pricing is suspect to decline, the PC building crowd seemingly waits for the proverbial other shoe to drop. At the jump of 2018, reports suggested a potential relief in memory pricing; however, recent reports stand to nullify any hopes of reasonable RAM prices.

In a report from Digitimes, prices are speculated to rise 5-10% in the first half of 2018, with increased demand from datacenter and smartphone segments. Additionally, Goldman Sachs reinforced the suspected DRAM price trend in a note to investors. Goldman Sachs notes that supply appears to remain constrained, and 32GB server module prices are up at $310 to $315, up from $300 back in January. Overall, this echoes the most recent DRAMeXchange forecast, which expects DRAM supply to remain tight with strong demand, as well as expecting DRAM revenue to increase by more than 30 percent in 2018, reaching $96 billion.

All the big players—that is, Samsung, SK Hynix, Micron—are planning on ramping up DRAM output for 2018 and 2019, with 2017 being a historic year for DRAM prices and growth. An infusion of new memory supply to the market could offset the high prices, to an extent—but not the high demand.

For perspective, we bought a G.SKILL Trident Z 16GB DDR4-3200MHz kit in March of 2016 for $99. That same kit now goes for $211—more than double. Additionally, we published a brief history of RAM prices between 2011 and 2018, should anyone require more examples. It’s hard to say what price will do this year; that would simply be conjecture. However, the outlook remains bleak, and it’s a tough time to be a PC builder (see also: GPU prices).
Quote:As memory demand has continued to climb, memory suppliers have changed their objectives: Micron publicly stated that the company is no longer interested in gaining marketshare, and is instead focusing on profits. Other companies could follow suit, and if that’s the case, that means competition slows down and profit goes up in conjunction with prices. In speaking with our sources at suppliers, we’ve learned that these companies are making more money than ever before, and that they treat everyone who isn’t a server or enterprise company as lower priority. The margins are made in enterprise, and that means DRAM makers like Corsair, Adata, et al. are forced to increase their sale price to retailers to account for the higher supply prices.

We also mentioned to our sources that some analysts had projected memory prices as returning to normal come the end of 2018, to which our contacts laughed and noted, “yeah right, not any time soon.”

We’ve now detailed consumer prices (in part 1) and supplier prices (in this part). We’ll continue to follow this story as our software scrapes pricing data.

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