TrendForce Adjusts Notebooks’ Unit Memory Capacity for 2015 Down by 3~5% due to Microsoft’s New License Fee Arrangement for Windows 10

Microsoft will launch Windows 10 globally on July 29. The latest version, which combines the strengths of its predecessors, is free to upgrade for users of genuine Windows 7 and 8. According to DRAMeXchange, a division of TrendForce, the PC replacement demand generated by Windows 10 will be noticeably weaker than the vendors’ initial expectations. Besides being free for users of earlier Windows, the latest Windows does not require specific hardware upgrades. With the average lifespan of PCs continuing to increase, three- to five-year-old PCs will be able to run on Windows 10 smoothly. DRAMeXchange estimates that the 2015 notebook shipments will reach 168M units, a decline of 5% compared with 2014. This shipment projection is mainly based on the downward revisions of the global economic outlook, but Microsoft’s free Windows 10 upgrade scheme also has a certain amount of impact on the overall PC shipments. 

Moreover, Microsoft for the first time calculates its OS license fee based on a device’s display size, memory capacity and HDD/SDD storage capacity. The formula also factors in device type and will be different for tablets, notebooks and desktops. DRAMeXchange reports the current price difference between notebooks carrying 2GB memory modules and the mainstream 4GB memory modules is close to US$20. Since margins for notebook products are generally low, some vendors are studying ways to avoid higher Windows license fees. One way is to equip low-priced notebooks with 2GB memory. Another option for vendors is to negotiate with retailers about the possibility of upgrading memory at the retail end. 

Microsoft’s new license fee formula and the demands from the computer vendors have forced DRAM manufacturers to make plans to restart production of 2GB modules, which were originally destined to be phased out. Presently, both Samsung and SK Hynix are able to provide 2GB memory solutions to their clients. Micron’s 2GB products are also at verification stage and will be available on the market later. Microsoft’s new license fee arrangement for Windows 10 is expected to have a certain effect on the DRAM industry. DRAMeXchange therefore has made a downward revision on the notebooks’ average unit memory capacity for this year from 4.6GB to 4.4GB, which is a 3~5% drop. With contract price continuing to fall, this anticipated reduction in notebooks’ unit memory capacity will undoubtedly add pressure on the DRAM industry.