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keyword:Avril Wu138 result(s)

Press Releases
First Quarter DRAM Contract Prices See a Rare, Large Down-Correction, Resulting in the Sharpest Decline Since 2011, Says TrendForce



The latest analysis of the PC DRAM market from DRAMeXchange, a division of TrendForce, finds that most contracts are now monthly deals rather than quarterly deals, with February even seeing a most unusual, large down-correction in prices The current quarterly decline dropped from the originally projected 25% to nearly 30%, resulting in the sharpest decline in a single season since 2011 DRAMeXchange points out that, according to the most recent market observations, inventory levels have kept climbing ever since overall contract prices dropped in the fourth quarter of last year, and most DRAM suppliers are currently holding around a whopping six weeks' worth of inventory (wafer banks included) Meanwhile, Intel's low-end CPU supply shortage is expected to last until the end of 3Q19, and PC-OEMs are unable to carry out the consumption of DRAM chips under demand suppression The overall market has thus entered freefall, meaning that large reductions in prices aren't going to be effective in driving sales The excessively high inventory will continue to cause down-corrections in prices this year if demand doesn't make a strong comeback Looking at the DRAM market one or two years into the future, the big trio aren't going to roll over in the competition for market shares any time soon SK Hynix has recently announced that it will invest 120 trillion won (around US$107 billion ) to build four new wafer fabs as part of its strategy to improve its competitiveness Micron, on the other hand, doubled down and commenced construction of an IC testing and packaging plant in Taiwan At the same time, its subsidiary Micron Memory Taiwan ( formerly Rexchip) in Houli, Taichung, is considering building a new 12-inch DRAM wafer fab, which could finish construction as early as the end of next year, and massively contribute to production in 2021 As for the world's largest DRAM supplier Samsung, it is currently building a second fab at Pyeongtaek “The rich stay rich”—such is the immutable trend of the DRAM market; furthermore, new competitors are aided by a wealth of resources and capital upon entering the market Hence, if smaller DRAM suppliers don't find ways to catch up on production processes and scale, they may risk being marginalized in the near future

Press Releases
DRAM Market to See Lower Capital Expenditure and Moderated Bit Output in 2019 Due to Weak Demand, Says TrendForce


Semiconductors / Consumer Electronics

After contract prices of DRAM products turned downward sharply in 4Q18 by 10% QoQ, major DRAM manufacturers have tried to offset fall in prices by slowing down capacity expansion in 2019, as the demand outlook for PCs, servers, smartphones, and other end consumer products remains weak, reports DRAMeXchange, a division of TrendForce DRAMeXchange points out that, manufacturers’ capex plans are normally the most relevant indicators for their actual bit output In 2019, the total capital expenditure for DRAM production is forecast at about $18 billion, an annual decrease of 10% This CAPEX is at the most conservative investment level in recent years Samsung and SK Hynix have been the first two suppliers who announced the plans to cut their 2019 semiconductor capex Samsung, the market leader, would spend $8 billion on capex in 2019, mainly for migration to advanced process (1Ynm) and development of new products Samsung’s 2019 plan for wafer starts would be the most conservative in recent years The company has also decided to terminate the production capacity expansion in its Pyeongtaek fab, which will lower Samsung’s annual output growth to around 20%, a new low over the years SK Hynix says its 2019 capex will be reduced to $55 billion, mainly for migration to advanced process and yield improvement However, its new fab in Wuxi has just been completed, with potential capacity expansion of 30-40K pieces for the whole year of 2019 According to DRAMeXchange, SK Hynix’s output growth would be 21% YoY in 2019, slightly higher than that of Samsung As for Micron, who has recently announced to cut its capex to $3 billion, revised its 2019 output growth forecast downward to 15%, from almost 20% previously, in order to prevent its inventory level from increasing further Micron would not expand its production capacity in its subsidiary Micron Memory Taiwan (formerly Rexchip), Micron Technology Taiwan (formerly Inotera), or its Hiroshima fab of former Elpida Memory, so Micron’s monthly wafer starts would remain 350K in 2019 And the output growth would only come from its migration to 1Ynm production this year DRAMeXchange believes that Micron is more vulnerable to the drop in prices due to its weaker cost structure than Samsung and SK Hynix Thus, Micron has to make more production and capex adjustments to cope with the price falls As the result, Micron's market share would continue to decrease after two years with only 15% growth in bit output Manufacturers try to avoid price competition and maintain profitability by slowing down capacity expansion In the oligopolistic market with no new competitors, manufacturers have tried to adjust their production plans and cut down capex to avoid price competition In terms of profitability, the gross margins of Samsung’s and SK Hynix’s DRAM production remain nearly 80%, while that of Micron remains over 60% With such high margins, it is reasonable for the manufacturers to be conservative in their production outlook for 2019 On the demand front, the first quarter of 2019 will witness the weakest demand of the year due to holidays and seasonal headwinds Moreover, there is currently no sign of demand recovery in the second quarter or afterwards The market is still full of uncertainties due to the looming trade war between China and the US Therefore, for the DRAM price trends this year, DRAMeXchange expects a quarterly decline of 15% in 1Q19, and less than 10% in 2Q19 For 2H19, the prices would continue to fall by 5% each quarter unless the demand is significantly improved

Press Releases
Prices for Some Contracts Have Been Adjusted Downward Twice in 4Q18, Contract Prices of DRAM Products Would See Steeper Decline in 1Q19, Says TrendForce


Semiconductors / Consumer Electronics

Contract prices of DRAM products have started to slide since 4Q18, and a certain amount of DRAM contracts have now been negotiated as monthly deals, instead of quarterly ones, reports DRAMeXchange, a division of TrendForce For some contracts, the prices have been adjusted downward twice in this November, which was very rare in the industry The situation indicates that the OEMs now have a negative outlook on the market and the price falls are expected to enlarge in the first quarter of 2019 In this November, the average prices of low and mid-range of 4GB/8GB PC DRAM modules have started to fall, while that of high-range ones remained flat The average contract price of 4GB PC DRAM modules for November has dropped by 32% MoM from US$31 in October to the current US$30 As for the average contract price of 8GB PC DRAM modules, it has dropped by 16% MoM from US$61 in October to the current US$60 DRAMeXchange estimates that the average selling prices of DRAM would drop by nearly 8% QoQ in 4Q18 Particularly, PC DRAM, server DRAM, and specialty DRAM ASPs would all show a sequential fall close to 10%, the highest among all the applications In comparison, mobile DRAM would witness a relatively smaller price drop of 5% in ASP, because mobile DRAM products experienced a more moderated price hike during previous undersupply compared with other applications Looking ahead to 1Q19, the supply will keep ramping up because of the increased share of products on the 1Ynm process, raised yield rate of the technology, and continued production capacity expansion in Samsung’s Pyeongtaek fab in 4Q18 On the demand front, the first quarter of the year is normally a low season for the DRAM market, and the demand momentum from smartphone shipments in 1Q19 tends to be weaker than in previous years As a result, the price decline for mobile DRAM may go steeper then As for the overall price trend in the DRAM market, it would be inevitable to see a sharper price drop in 1Q19 than in 4Q18    DRAM market expects weakening outlook due to increased supply and sluggish demand For the PC DRAM segment, DRAMeXchange expects the prices to decline by over 10% QoQ in 1Q19, because PC DRAM products are highly sensitive to the change in demand and supply situations The continued supply increase, headwinds in the low season, and excess inventories would make the price drop steeper compared with this quarter Similarly, server DRAM products would experience an even larger price drop In addition to current high inventories held by server DRAM consumers and the seasonal headwinds, US-China trade disputes may also bring more uncertainties to the market The shipment outlook for 1Q19 is expected to be weaker than the past three years, especially for mainstream 32GB modules, for which manufacturers have offered attractive quotations to drive the sales Mobile DRAM products also expect a weak price trend in 4Q18 As shipments of new iPhones have reached its peak, and inventories of Android phones in the channel markets remain high, the first quarter of next year will be the period for the channel market and OEMs to eliminate excess inventory Thus, the demand for key components would be very limited Moreover, we also expect a slowdown of 26% YoY in the global smartphone production volume next year As the bit demand for mobile DRAM will merely rely on increases in average content per box of smartphones, the weak outlook of the global smartphone market would result in a continued price drop for mobile DRAM products In terms of the specialty DRAM segment, the first quarter of the year is also a traditional low season The prices would continue to fall considering the greater impacts of US-China trade disputes Particularly, DDR4 products may witness steeper price drop than DDR3 ones due to weak demand from PC and server products

Press Releases
Contract Prices Have Started to Drop in PC DRAM Market This October and 4GB Modules Are Just Above the US$30 Threshold, Says TrendForce


Consumer Electronics / Semiconductors

Contract prices of PC DRAM products have started to turn downward sharply this October as major suppliers have completed most contract negotiations, reports DRAMeXchange, a division of TrendForce The average price of 4GB PC DRAM modules for 4Q18 contracts has dropped by 1014% QoQ from US$345 in 3Q18 to the current US$31 As for the average contract price of 8GB PC DRAM modules, it has dropped by 1029% QoQ from US$68 in 3Q18 to the current US$61 Since the DRAM market has just entered oversupply, DRAMeXchange does not discount the possibility of further price declines in November and December Also, the price decline of 8GB solutions will continue to surpass that of 4GB solutions because DRAM suppliers are now eager to sell off their inventory “As the indicator of the price trend in the contract market, spot prices have kept falling since the early 2018 and continued their downtrend from September”, says Avril Wu, senior research director of DRAMeXchange The latest update reports that the average spot price of 1G*8 chips has dropped to US$6946, showing a difference of 5% with the average contract price of US$731 While the oversupply situation and the falling spot prices pull contract prices of PC DRAM modules downward, the market penetration of 8GB modules is starting to increase very rapidly because suppliers have aggressively expanded shipments of the higher-density products DRAMeXchange furthermore believes that 8GB modules will surpass 4GB counterparts in shipment volume much sooner than originally anticipated and become the market mainstream It should also be noted that DRAMeXchange will be using prices of 8GB modules as the base for determining the contract price trend in the PC DRAM market starting in 2019 Seasonal headwinds expected to aggravate price decline in the PC DRAM market during 1Q19 PC-OEMs have not been able to step up their product shipments in 2H18 due to the shortage of Intel CPUs Going forward, the pressure of rising component costs will only mount as the shipment season transitions from the peak period to the slow period Since DRAM prices had risen for nine consecutive quarters, they are expected to take a plunge as they move past the inflection point The sliding ASP in the PC DRAM market will also add to the downward pressure on prices of PC DRAM modules, leading to large and sudden drops Looking ahead to 1Q19, seasonal headwinds will affect shipments of end products not only in the PC market but also in the server and smartphone markets Furthermore, the quarter will be the period for the channel market and OEMs to eliminate excess inventory Thus, negotiating contracts will be very challenging for the DRAM suppliers The ASP in the whole DRAM market is forecast to fall by as much as around 20% YoY in 2019, according to DRAMeXchange’s latest analysis After reaching peak profit in 3Q18, DRAM suppliers are now optimizing their costs so that they will have a soft landing in 2019 as prices are marked down every quarter

Press Releases
DRAM Products May Experience Steeper Price Decline of 5% QoQ in 4Q18 Due to Oversupply and Weak Demand, Says TrendForce


Semiconductors / Consumer Electronics

DRAMeXchange, a division of TrendForce, reports that DRAM suppliers have been negotiating with their clients over the 4Q18 contracts towards the end of September Looking ahead to the next quarter, DRAMeXchange expects that the quotations of DRAM products to decline by 5% QoQ, higher than the previous forecast of 1~3% The weak quotations are mainly due to increasing bit supply yet fairly limited growth in demand, despite the coming of holiday sales season “DRAM products have begun to see a weak price trend since 3Q18 after the price growth of nine consecutive quarters”, says Avril Wu, senior research director of DRAMeXchange Particularly, PC DRAM and server DRAM showed only a 1~2% price hike QoQ in the third quarter, while mobile DRAM applications witnessed a flat price trend despite the busy season Graphics DRAM has even started to experience a price drop during the same period On the other hand, the spot prices have been sliding since the beginning of this year and then dropped to a level lower than contract prices at the end of June Currently, the spot prices are 10% lower than contract prices, which is an early indicator of the possible DRAM price decline in general Server DRAM products may see steeper price drop in the slowing DRAM market In the server DRAM market, orders from data center customers in North America and the transition to the new server processor platform have driven up the demand Amid the tight supply of DRAM in 1H18, the end-clients tended to secure the supply by double booking By 3Q18, the undersupply has been eased with significantly improved order fulfillment rates, as the DRAM suppliers continue to increase the proportion of server DRAM applications in their product mixes Looking ahead to the fourth quarter, DRAMeXchange expects the quotations to decline by 5% QoQ, higher than the previous forecast of 2% This is because the server demand is uncertain and spot prices of DRAM products continue to fall in the channel market Particularly, Korean DRAM manufacturers have already lowered their target prices for 4Q18 Similar to server DRAM, the PC DRAM market also expects an oversupply and a price drop up to 5% The price decline is larger than the previous forecast, for the shortage of Intel CPUs may lead to lower demand for notebooks and PC DRAM in a row In terms of specialty DRAM, DRAMeXchange notes that the demand has already gone weak, together with price declines since September, because the US-China trade war has brought some uncertainties to the market For 4Q18, there is a higher chance for the contract prices of specialty DRAM to decrease, even steeper than PC DRAM and server DRAM Mobile DRAM products also expect a weak price trend in 4Q18 although the shipments of new iPhones are expected to boost the demand However, the market tends to be conservative about the smartphone sales due to new iPhones’ high price tag Therefore, DRAMeXchange expects high possibilities for the oversupply of DRAM Specifically, in 4Q18, the prices of discrete solutions may decline by around 3% QoQ, while eMCP may see up to 8% QoQ price decline due to the continuous price drop of NAND Flash

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