Currently, the only remaining source of demand is on the server side, so overall DRAM inventories will remain in excess in 2Q22.
In terms of PC DRAM, PC OEMs are adopting a cautious stocking strategy for orders in 2Q22 due to the Russian-Ukrainian war, which may continue to affect orders during the peak season in 2H22, and are revising down targets 2022 shipment. In addition, the overall bit supply continues to grow, so the PC DRAM price drop in 2Q22 will further extend to 3~8% and may continue to deteriorate.
In terms of server DRAM, the current inventory level of server DRAM held by cloud service providers and enterprise customers is roughly the same as the amount held in 1Q22, and this inventory level relatively high is not enough to support a price reversal. The supply rate of server DRAM, which is still oversupplied, remains above 100% and this situation will continue in 2Q22. However, a decline in prices in 2Q22 should converge towards 0-5%, coinciding with the peak of the seasonal stockpile surge.
In terms of mobile DRAM, due to a number of factors such as high inflation, changes in the pandemic situation in various countries and the Russian-Ukrainian war, it cannot be excluded that the production volume of smartphones continues to decline as smartphone brands will surely be more careful when planning production and preparing materials. On the supply side, technology migration in manufacturing compensated for the shift of DRAM production to the server DRAM domain from 2H21, maintaining the level of mobile DRAM bit supply. For this reason, given that the production targets of smartphone brands have dropped and the average memory capacity of a single device has not improved significantly, the oversupply is expected to continue in 2Q22, with a drop in prices of around 0 to 5%.
In terms of Graphics DRAM, demand has been affected by weak virtual currency prices over the past few months, which has gradually begun to dampen demand for graphics cards. The offering is facing supply constraints and a shortage of suppliers as Micron will withdraw from the 8Gb GDDR6 offering in 2Q22. This will cause a temporary imbalance between supply and demand for Graphics DRAM as the capacity allocation of Korean manufacturers fails to immediately fill the aforementioned gap. Even if terminal demand slows, as 8GB GDDR6 remains common in today’s market, it will take time for manufacturers to convert specs to 16GB. Prices are expected to rise 0-5% in 2Q22.
In terms of consumer DRAM, demand for DDR3 from specific products such as WiFi 6 and 5G base stations remains robust. The amount of DRAM supplied in the market varies from manufacturer to manufacturer. Samsung and SK hynix have gradually reduced production of DDR3, while Taiwanese company Nanya Tech recently shifted production to DDR3, due to DDR3’s higher gross profit margin. Due to relatively stable demand and limited shipments from Korean manufacturers, the price of DDR3 will rise 3-8% in 2Q22, with DDR4 maintaining a downward price trend.