TrendForce：Negotiations for 2H'July Contract Prices Settled; Highest Contract Prices Reach US$33 on 6.45% Growth

The majority of the contract prices for the third quarter has been settled in 2H'July, according to DRAMeXchange, the memory and storage research division of TrendForce. The average 4GB contract prices have reached US$32, a 4.92% increase compared to the same period a month ago, while the highest contract prices rose an estimated 6.45% to US$33. In order to account for demand in the traditional peak season as well as Apple's impending product releases, DRAM suppliers have begun to reserve portions of their already constrained DRAM capacity for Mobile DRAM. This will likely enable the existing price momentum in the market to continue into the third quarter. 

DRAMeXchange Assistant Vice President, Avril Wu, pointed out that the termination of support for the Windows XP operating system has encouraged many corporate entities to replace PC devices. As PC OEMs with high NB shipments in May and June are currently facing low DRAM inventories, many will have to eventually accept the recent DRAM price increases in order to maintain their steady shipment momentum. The growth in PC DRAM prices has already managed to affect the price movements of components such as Server DRAM, Graphics DRAM, and Specialty DRAM, all of which saw a slight price increase in the recent periods. 

Given there are currently no plans from the DRAM manufacturers to expand on their existing capacity in 2H14 and that many have encountered obstacles while transitioning to the 25nm manufacturing process, future supplies in the DRAM market are likely to remain tight. TrendForce believes that the dynamics in the DRAM industry could change noticeably once Apple's influence in the market expands. For instance, following the release of Apple's new iPhone, iWatch, and Macbook Air, the industry's three major DRAM manufacturers will not only begin to reserve the majority of their capacity for Mobile DRAM, but also place their priority on the first tier clients. Under such an effect, DRAM prices will likely remain high going into the third quarter. This suggests there's still minor room for growth in pricing during August and September.