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Press Releases
DRAM Revenue Undergoes 26% Increase QoQ for 2Q21 Owing to Rising Quotes and Higher-Than-Expected Shipment, Says TrendForce

2021/08/23

Semiconductors

After DRAM prices made a rebound into an upward trajectory in 1Q21, buyers expanded their DRAM procurement activities in 2Q21 as they anticipated a further price hike and insufficient supply going forward, according to TrendForce’s latest investigations Not only was demand robust from clients in the notebook segment, which benefitted from ongoing WFH and distance learning applications, but CSPs also sought to gradually replenish their DRAM inventories Furthermore, demand for products that are relatively niche, including graphics DRAM and consumer DRAM, remained strong Hence, DRAM suppliers experienced better-than-expected QoQ increases in their DRAM shipment for 2Q21 At the same time, DRAM quotes grew by a greater magnitude compared to the first quarter as well With both shipment and quotes undergoing growths in tandem, DRAM suppliers registered remarkable growths in their revenues in 2Q21 Total DRAM revenue for 2Q21 reached US$241 billion, a 26% QoQ increase However, heading into 3Q21, the issue of mismatched component availability began surfacing in the upstream supply chain and bottlenecking the assembly of electronic devices Some OEMs/ODMs (especially notebook manufacturers) have therefore scaled down their DRAM procurement due to their relatively high level of DRAM inventory in comparison with other components As a result, although most DRAM suppliers remain bullish on the market’s future, the growth in demand from certain product segments is likely to slow down, since DRAM buyers still carry ample inventory In light of suppliers’ insistence on raising quotes, TrendForce expects the overall ASP of DRAM products for 3Q21 to undergo a QoQ increase, albeit at a narrower 3-8% now compared to 2Q21 DRAM suppliers significantly improved their earnings performances in 2Q21 due to massive price hikes and increased shipment of products manufactured with advanced process technologies The three dominant suppliers (Samsung, SK hynix, and Micron) of DRAM products put up similar revenue performances for 2Q21 as they saw an increase in both ASP and shipment, with the latter surpassing the suppliers’ expectations On the demand side, buyers showed an increased willingness to expand DRAM procurement because they anticipated that prices will rise even further In addition, frequent shortages of various semiconductor components this year drove buyers to stock up on DRAM ahead of time so as to avoid potential manufacturing bottlenecks due to low DRAM inventory Hence, each of the three suppliers increased its revenue by more than 20% QoQ in 2Q21 Samsung in particular registered the most remarkable growth, at a 302% QoQ increase For 3Q21, these suppliers will not only continue to hike up quotes, but also increase their quarterly shipments by a similar magnitude TrendForce thus expects their market shares to remain relatively unchanged from the previous quarter DRAM suppliers likewise experienced considerable growths in terms of profitability for 2Q21 thanks to the massive increase in DRAM quotes, along with the fact that DRAM products manufactured with advanced process technologies occupied a growing share of the suppliers’ DRAM bit shipment For instance, while Samsung kicked off mass production with the 1Znm process in 1Q21 at a relatively low yield rate (since the technology was still in its infancy at the time), the company was able to considerably ramp up production in 2Q21, thereby raising its operating profit margin from 34% in 1Q21 to a staggering 46% in 2Q21 SK hynix similarly raised its operating profit margin to 38% in 2Q21 by improving the yield rate of its advanced process technology Micron, on the other hand, increased its DRAM quotes by a similar magnitude compared to its Korean competitors in 2Q21 (Micron counts the March-May period as its fiscal quarter) and saw a jump in its operating profit margin from 26% in 1Q21 to 37% in 2Q21 Assuming that prices and shipment continue their upward trajectory in 3Q21, TrendForce is bullish on DRAM suppliers’ profitability for the quarter as well and expects market leader Samsung to reach 50% in operating profit margin for the first time in nearly three years Taiwanese suppliers delivered similar revenue growths to the three dominant suppliers’ in 2Q21 thanks to persistent market demand for specialty DRAM Taiwanese DRAM suppliers posted a massive increase in their revenues for 2Q21 owing to persistently high specialty DRAM quotes and high demand from clients More specifically, Nanya Tech’s revenue grew by about 28% QoQ for 2Q21, and its operating profit margin increased from 171% in 1Q21 to 312% in 2Q21 These growths can primarily be attributed to a 30% increase in the company’s specialty DRAM quotes, and Nanya Tech has expressed that it expects further earnings growth in 3Q21 Winbond, on the other hand, saw strong demand from its clients and raised its DRAM quotes by a greater magnitude than its NAND Flash quotes Winbond’s revenue from its DRAM business not only rose by 39% QoQ in 2Q21, but also accounted for an increasing share of its total revenue, at 46% It should be pointed out that the two aforementioned Taiwanese suppliers are still currently facing the issue of insufficient production capacities, and their existing fabs do not have the physical space to house additional manufacturing equipment Hence, before these suppliers finish constructing new fabs, they must rely on raising quotes in order to grow their DRAM businesses in the short run Nanya Tech’s new fab that is currently under construction will not be able to contribute to the company’s production capacity until construction concludes in 2024 In the short run, Nanya is able to marginally increase its bit output only through migrating to advanced process technologies at the 1A/1Bnm nodes Similarly, Winbond will not be able to resolve its issue of insufficient production capacity until its fab located in Luzhu, Kaohsiung, kicks off mass production in 2H22 As for PSMC, its revenue from sales of PC DRAM products manufactured in-house increased by about 7% QoQ in 2Q21 However, PSMC’s total revenue from both sales of in-house DRAM and its DRAM foundry business increased by 19% QoQ in 2Q21 Much like its Taiwanese competitors, PSMC must carefully allocate its limited production capacity between logic IC products and memory products For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
Contract Prices of PC DRAM Expected to Decline by 0-5% in 4Q21 as Spot Prices of DRAM Modules Continue to Weaken, Says TrendForce

2021/08/10

Semiconductors

Now that most negotiations over contract prices of PC DRAM for 3Q21 have concluded, DRAM suppliers’ low inventories and the arrival of the peak season for DRAM procurement have resulted in a 3-8% QoQ increase in PC DRAM contract prices for 3Q21, although this is a relatively muted growth compared to the 25% increase experienced in 2Q21, according to TrendForce’s latest investigations However, demand for PC DRAM in the spot market began to show signs of bearish movement in early July ahead of time, as DRAM suppliers continued to lower prices in order to adjust their DRAM inventories Regarding the contract market, PC OEMs currently carry relatively high levels of DRAM inventory because they substantially stocked up on PC DRAM beforehand in anticipation of an upcoming shortage Not only has PC OEMs’ high DRAM inventory put downward pressure on possible price hikes for PC DRAM, but the gradual lifting of COVID-related restrictions in Europe and the US will also likely lower the overall demand for notebook computers, thereby pulling down the overall demand for PC DRAM TrendForce therefore forecasts a 0-5% QoQ decline in PC DRAM contract prices for 4Q21 Regarding spot prices of DRAM modules, most major module suppliers have also started to lower prices in an attempt at inventory reduction, leading to a persistent downward trend for spot prices of PC DRAM modules throughout August According to TrendForce’s findings, this decline in spot prices of mainstream PC DRAM modules, which began on May 20th, accumulated to 32% as of August 3 Furthermore, spot prices of PC DRAM modules have, for the first time in 2021, now fallen below contract prices for 3Q21 by almost as much as 20% and are unlikely to experience a price hike in the short run Since PC OEMs still keep a high inventory of PC DRAM, their upcoming procurement activities for PC DRAM will likely remain sluggish An overview of the PC DRAM market throughout 2021 shows that, as the COVID-19 pandemic reached its peak in 2Q21, most purchasers aggressively stocked up on various components, including memory solutions, in order to avoid possible shortages, and these stock-up activities were particularly bullish in the PC market As a result, PC DRAM prices underwent a massive 25% increase in April, and demand bits also saw a surge during the quarter Moving into 3Q21, buyers and sellers in the PC DRAM and server DRAM markets found it difficult to reach an agreement while negotiating over contract prices throughout the end of July As such, the increase in PC DRAM prices for 3Q21, along with the increase in PC DRAM sales bits, is significantly weaker compared to 2Q21 In addition, TrendForce indicated at the end of June that most PC OEMs were carrying about 8 to 10 weeks’ worth of PC DRAM inventory, with some even surpassing 10 weeks Their inventories have not undergone significant improvements as of early August As these PC OEMs gradually take delivery of DRAM they procured for 3Q21, some of them now carry inventories exceeding 12 weeks’ supply TrendForce therefore believes that the persistently growing inventories of PC OEMs will likely result in a further weakening of PC DRAM contract prices in 4Q21 Looking ahead to 4Q21, TrendForce expects PC shipment, particularly Chromebook shipment, to remain in a downward trajectory following increased vaccinations in Europe and the US The latest data show that branded Chromebook shipment peaked in 2Q21 and subsequently underwent monthly declines following this peak Furthermore, the overall demand for notebook computers has started waning as the general public resumes its day to day activities, such as a return to offices and schools, in light of the gradual lifting of COVID-19 restrictions in Europe and the US Hence, TrendForce believes that, despite the cyclical upturn of the notebook market in 4Q21, as well as the commercial segment’s replacement demand, ODMs will likely continue to cut back on notebook production on a quarterly basis, in turn decreasing the overall demand for PC DRAM Prices of both consumer DRAM and graphics DRAM are expected to enter into a downturn in 4Q21 owing to weak supply and demand In sum, the sufficiency ratio of PC DRAM increased from -113% in 3Q21 to 028% in 4Q21 Hence, TrendForce expects contract prices of PC DRAM to take a downward turn in 4Q21, while prices of DDR4 consumer DRAM, which are highly correlated with PC DRAM prices, will likely undergo a similar decline Likewise, contract prices of graphics DRAM are expected experience a looming decline as well, since the sudden cryptocurrency downturn resulted in a corresponding plummet in cryptocurrency mining demand and, by extension, spot prices of graphics DRAM, which is used in cryptocurrency mining equipment Regarding server DRAM, contract prices are expected to mostly hold flat, without noticeable hints of price hikes, in 4Q21 This trend can be attributed to the server industry’s migration to Intel’s new Ice Lake platform, which has been steadily rising in terms of penetration rate, as well as the fact that demand for servers has yet to weaken However, MoM declines in server DRAM contract prices may potentially take place in November and December Likewise, mobile DRAM prices are expected to remain relatively unchanged in 4Q21 compared to the previous quarter The profitability and ASP/Gb of this product category are relatively lower compared to other DRAM products, such as PC DRAM and server DRAM, and it did not experience as much of an uptrend during the prior quarters Hence, while PC DRAM prices are expected to decline in 4Q21, mobile DRAM prices will remain sustainable, without undergoing a similar decline For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
Sudden Drop in Cryptocurrency Prices Hurts Graphics DRAM Market in 3Q21, Says TrendForce

2021/08/02

Semiconductors

The stay-at-home economy remains robust due to the ongoing COVID-19 pandemic, so the sales of gaming products such as game consoles and the demand for related components are being kept at a decent level, according to TrendForce’s latest investigations However, the values of cryptocurrencies have plummeted in the past two months because of active interventions from many governments, with the graphics DRAM market entering into a bearish turn in 3Q21 as a result While graphics DRAM prices in the spot market will likely show the most severe fluctuations, contract prices of graphics DRAM are expected to increase by 10-15% QoQ in 3Q21 since DRAM suppliers still prioritize the production of server DRAM over other product categories, and the vast majority of graphics DRAM supply is still cornered by major purchasers It should be pointed out that, given the highly volatile nature of the graphics DRAM market, it is relatively normal for graphics DRAM prices to reverse course or undergo a more drastic fluctuation compared with other mainstream DRAM products As such, should the cryptocurrency market remain bearish, and manufacturers of smartphones or PCs reduce their upcoming production volumes in light of the ongoing pandemic and component supply issues, graphics DRAM prices are unlikely to experience further increase in 4Q21 Instead, TrendForce expects prices in 4Q21 to largely hold flat compared to the third quarter Sudden drop in ETH prices led to plummeting GDDR5 and GDDR6 spot prices Recent observations on the spot trading of graphics DRAM products indicate that the changes in this market closely correlate to the changes in the value of ether (ETH) because graphics cards are the crucial tool for processing the mining algorithm of this cryptocurrency ETH prices fell by more than 50% within a two-month span as a result of the latest measures enacted by regulatory agencies around the world to suppress the speculation of cryptocurrencies Accordingly, cryptocurrency miners’ and investors’ interest in ETH has also diminished significantly The plunging demand from cryptocurrency miners also means that a substantial number of graphics cards are being pushed into the second-hand market TrendForce’s investigation shows that spot prices of graphics cards have fallen by about 20-60% over the past month or more The differences in the magnitude of decline depends on brand and technology generation Furthermore, the across-the-board decline in spot prices of graphics cards has also severely constrained the spot demand for graphics DRAM According to TrendForce’s understanding, even though spot prices are still higher than contract prices for GDDR6 chips, the difference is rapidly shrinking This, in turn, will have an adverse effect on the general price trend of GDDR6 chips in the future The trading is even more subdued for GDDR5 chips that are used in the earlier generations of graphics cards Spot prices are now actually about 20% lower than contract prices for GDDR5 chips The difference here indicates that there is a glut of older graphics cards, and the GDDR5 chips that are embedded in them are no longer in high demand Contract prices of graphics DRAM are expected to increase by nearly 15% for 3Q21 as graphics DRAM suppliers’ fulfillment rate remains relatively low Regarding the contract market for graphics DRAM, the sell-side has considerable leverage in price negotiations as these suppliers prioritize the production of server DRAM ahead of other product categories In the current ecosystem of discrete graphics cards, graphics DRAM buyers such as Nvidia are still opting for a business model based on bundle sales (that is, graphics card manufacturers that purchase Nvidia GPUs must also purchase graphics DRAM from Nvidia) Given that Nvidia and AMD have cornered the vast majority of graphics DRAM supply, notebook OEMs and small- and medium-sized manufacturers of computer components (such as motherboards) will find it difficult to procure sufficient graphics DRAM, while DRAM suppliers’ fulfillment rate for graphics DRAM chips remains relatively low These aforementioned factors are responsible for not only the nearly 15% QoQ hike in the overall contract prices of graphics DRAM for 3Q21 (which is slightly higher than the corresponding price hikes in mainstream PC and server DRAM products for 3Q21), but also why spot prices of GDDR6 chips are about 10-15% higher than contract prices On the whole, prices in the graphics DRAM spot market, which is an extremely responsive market, have already begun to reflect the weakening demand from the end-product segment, particularly for graphics cards used in cryptocurrency mining As the supply of second-hand graphics card increases, some graphics card manufacturers may thus kick off promotional price cuts to boost sales In addition, buyers in the spot market may also begin anticipating even lower prices, and this anticipation will likely either lead to a massive decline in their graphics card demand or result in these buyers adopting a speculative attitude regarding graphics DRAM TrendForce therefore believes that the gap between spot prices and contract prices of GDDR6 chips will begin to narrow in 3Q21 For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
DRAM Prices for 3Q21 Projected to Undergo Minor QoQ Increase of 3-8% Owing to Rising Demand from Peak Season, Says TrendForce

2021/07/13

Semiconductors

As third quarters have typically been peak seasons for the production of various end-products, the sufficiency ratio of DRAM is expected to undergo a further decrease in 3Q21, according to TrendForce’s latest investigations However, DRAM buyers are now carrying a relatively high DRAM inventory due to their amplified purchases of electronic components in 1H21 The QoQ increase in DRAM contract prices are hence expected to slightly narrow from 18-23% in 2Q21 to 3-8% in 3Q21 Looking ahead to 4Q21, TrendForce believes that DRAM supply will continue to rise, thereby leading to either a further narrowing of price hikes or pressure constraining the potential price hike of DRAM products PC DRAM prices are expected to rise by 3-8% QoQ due to continued constraints on production capacities From the perspective of demand, the stay-at-home economy has resulted in persistently high demand for notebook computers Although discrepancies still exist among notebook brands’ inventory levels of various components, these brands are still making an aggressive attempt at maximizing their production of notebooks However, as most of these brands are still carrying about 8-10 weeks’ worth of PC DRAM inventory (which is relatively high), PC DRAM purchasing strategies from the buyers’ side will therefore remain relatively conservative From the perspective of supply, due to the rising demand for server DRAM, the production capacity allocated to PC DRAM is still in a severe supply crunch Hence, DRAM suppliers are firm in their attitudes to raise PC DRAM quotes, and TrendForce expects the price negotiations between PC DRAM buyers and suppliers in 3Q21 to become both lengthier and more difficult as a result, with contract prices likely finalized at the end of July Even so, what is now certain is that both sides have reached some level of understanding regarding the ongoing price hike of PC DRAM products TrendForce forecasts a 3-8% increase in PC DRAM contract prices for 3Q21 QoQ increase in server DRAM prices for 3Q21 are expected to narrow to 5-10% due to buyers carrying a relatively high inventory With regards to demand, in spite of the minor increase in the shipment of whole servers, server DRAM buyers are less aggressive in their server DRAM procurement compared to the previous quarter For instance, CSPs in North America and in China are currently carrying more than eight weeks of server DRAM inventory In other words, procurement activities for server DRAM will gradually decline in the coming quarters in accordance with market demand Notably, some Tier 2 clients will continue to procure server DRAM in 3Q21 since they did not sufficiently stock up in the prior quarters, and this demand will likely result in upward momentum for server DRAM prices With regards to supply, the three major DRAM suppliers (Samsung, SK Hynix, and Micron) are limited by the fact they are currently carrying a relatively low inventory of server DRAM As such, these suppliers will attempt to maintain their profitability by increasing prices each quarter It should also be pointed out that the decreased DRAM demand from smartphone brands has in fact allowed more wiggle room for server manufacturers to negotiate for more favorable server DRAM prices TrendForce thus believes that, before the supply side and demand side can reach an agreement, negotiations for server DRAM prices will become increasingly lengthy, and that server DRAM contract prices for 3Q21 will likely increase by 5-10% QoQ once negotiations are finalized Mobile DRAM prices are expected to defy market realities and increase by 5-15% QoQ, with potential risks of high price and low demand In terms of demand, certain smartphone brands are now carrying a relatively higher inventory of mobile DRAM owing to Southeast Asia’s worsening COVID-19 pandemic, which led smartphone brands that primarily manufacture and sell their products there to begin lowering their production targets in 2Q21 In addition, some smartphone brands have set overly ambitious production targets; combined with the current shortage of foundry capacities, the discrepancies among the supply of smartphone components have now become more apparent, in turn forcing brands to slow down their mobile DRAM procurement in order to adjust their component inventories first Demand has remained strong from clients in the smartphone market since 4Q21, so the supply fulfillment rate of the three major DRAM suppliers for their smartphone clients will be consistently higher compared to clients in other markets As DRAM demand from non-smartphone applications ramps up and results in higher profitability than mobile DRAM, the three major DRAM suppliers will continue to adjust their production capacities in accordance with the shifting supply and demand from various segments, thus resulting in an increasingly constrained supply of mobile DRAM It should be pointed out that DRAM market leader Samsung has generally tried to minimize the profit discrepancies among its various products Furthermore, the price hike in Samsung’s mobile DRAM products was relatively lower compared to Micron in 1H21 As a result, in view of the weakening mobile DRAM demand in 3Q21, Samsung will increase its mobile DRAM prices to a more notable extent compared to its US competitors Going forward, Samsung’s price hike will lead its competitors to retool their pricing strategies, subsequently leading to an even wider price increase across the entire mobile DRAM market As such, TrendForce expects mobile DRAM prices to increase by 5-15% QoQ in 3Q21, which is a step up compared to 2Q21 On the other hand, this price hike against market realities may potentially lead to a further decline in mobile DRAM demand, resulting in a situation with high price and low demand Graphics DRAM prices are expected to increase by 8-13% QoQ due to tight supply of GDDR6 Regarding graphics DRAM demand, many cryptocurrency miners were previously intent on mining ETH with older graphics cards as it reached peak prices Nevertheless, the recent bearish turn of the cryptocurrency market has indirectly had an impact on demand for graphics cards equipped with GDDR5, although most of this impact primarily affected the spot market For the contract market, more than 90% of graphics DRAM applications have migrated to GDDR6 products, which are now in short supply since new graphics cards are equipped with GDDR6 memory and are in high demand In addition, the vast majority of GDDR6 stock from DRAM suppliers is currently cornered by graphics card manufacturers and game console manufacturers, thereby further limiting the graphics DRAM supply available to small and medium OEMs/ODMs Regarding graphics DRAM supply, although GDDR6 accounts for more than 90% of the three major DRAM suppliers’ graphics DRAM production, demand for GDDR6 still far exceeds supply because end product demand has also migrated to GDDR6 As orders for server DRAM gradually ramp up in 3Q21, DRAM suppliers will prioritize fulfilling demand from the server market first Hence, graphics DRAM contract prices for 3Q21 are expected to increase by 8-13% QoQ Consumer DRAM prices are expected to increase by up to 13% QoQ in light of strong demand At the moment, consumer DRAM demand is relatively robust from the consumer electronics market and the telecom market In addition, as China has been accelerating its build-out of 5G infrastructures and its rollout of WiFi 6 in the post-pandemic era, the overall demand for consumer DRAM remains strong going forward On the other hand, the three dominant DRAM suppliers are slowing down their transition of production capacities from DDR3 products to CMOS Image Sensors or other Logic IC products now that the consumer DRAM market has taken a bullish turn However, in the medium-to-long term, the general trend in the DRAM industry will still point to the elimination of the older 25/20nm process technologies and the continued migration towards more advanced 1Znm and 1αnm processes As a result, given DDR3 products’ declining supply and strong demand, DDR3 prices for 3Q21 are expected to increase by 8-13% QoQ, while DDR4 prices are expected to undergo a minor growth of 3-8% QoQ in accordance with mainstream PC and server DRAM prices For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

Press Releases
Graphics DRAM Contract Prices Projected to Rise by 8-13% QoQ in 3Q21 Due to Tight Supply in Contract Market, Says TrendForce

2021/06/09

Semiconductors

TrendForce’s latest investigations find considerable discrepancy between prices for graphics DRAM products in the contract market and in the spot market Quotes for graphics DRAM products continue to rise in the contract market as the severe undersupply situation persists Furthermore, the supply fulfillment rates for orders from some medium- and small-size clients have been hovering around 30% This undersupply situation is expected to persist through 3Q21, during which graphics DRAM contract prices are expected to rise by 8-13% QoQ Regarding the spot market, on the other hand, the value of ETH experienced continued uptrend from the start of 2021 until May, thereby driving up the demand for graphics cards, regardless of them belonging to the newer or older series At the height of the graphics card boom, spot prices of graphics DRAM products were up to 200% higher than contract prices Demand from miners for graphics cards are expected to be relatively muted before cryptocurrencies return to their previous bullish trends, and the gap between the spot and contract prices of graphics DRAM products will likely narrow in 3Q21 as a result TrendForce expects four key factors to continue driving up graphics DRAM prices in the contract market First of all, demand in the PC market remains high, particularly for gaming products Secondly, DRAM suppliers' production capacities allocated to most clients are constrained by the fact that Nvidia bundles its GPUs with graphics DRAM, meaning DRAM suppliers have prioritized capacity allocation to Nvidia as opposed to smaller clients Thirdly, both the Xbox Series X and PS5 are equipped with GDDR6 16Gb chips, which is different from GDDR6 8Gb chips As the two chips are non-interchangeable, once DRAM suppliers commit their production capacities for one, they can no longer produce the other using the same batch of wafers Finally, since there has been a resurgence of server DRAM orders, DRAM suppliers are still prioritizing the production of these products as they are a mainstream market product As various products each compete over limited DRAM production capacities, graphics DRAM contract prices are expected to undergo an increase going forward In particular, medium- and small-size OEMs/ODMs may likely face double-digit percentages increases Sharp drop in values of cryptocurrencies has caused spot prices of GDDR5 and GDDR6 products to fall Regarding the spot market, although spot prices for GDDR6 products has been undergoing a slight drop since May, they are still nearly 100% higher than the average contract prices Conversely, there is almost no difference between spot and contract prices for GDDR5 products Looking at the reasons behind the slide in spot prices of graphics DRAM products, a sharp drop in the values of cryptocurrencies is the most significant contributor apart from the excessively large difference between spot and contract prices The recent bearish movement of cryptocurrencies has resulted in a sharp drop in incentives for miners In turn, this has led to a corresponding drop for older graphics (such as the Nvidia GTX 1660, which features GDDR5 DRAM), which have no other sources of demand GDDR5 prices hence entered a significant decline With regards to newer graphics cards, however, there is still a baseline level of demand for them thanks to purchases by gamers Furthermore, these newer graphics cards, much like the new generation of game consoles, feature GDDR6 DRAM Therefore, due to the current demand for GDDR6 products, their price drop in the spot market is lower compared to GDDR5 products For more information on reports and market data from TrendForce’s Department of Semiconductor Research, please click here, or email Ms Latte Chung from the Sales Department at lattechung@trendforcecom For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/

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