DRAM supply eases
DRAMeXchange has reported the 2Gb prices have dropped from a high of US$ 2.18 in early November down to approximately US$ 1.98, a 9.2% decrease. The 4Gb prices, on the other hand, officially decreased by 3.4% to below US$ 4. Judging from the disruptions to the price uptrend that followed SK Hynix's fire accident and the underwhelming demand in the market, the Q4 contract prices are likely to either remain steady or experience a slight decline.
Other findings shared by DRAMeXchange includes:
Strategy of Three Largest DRAM Manufacturers Becomes Clear under Oligopoly Market Structure, 2014 Market Momentum Likely to Receive Boost
Following the DRAM market's transformation into an oligopoly, the three major DRAM manufacturers' 2014 strategies have become increasingly more transparent. This is not only expected to influence the future development of the DRAM market in 2014, but also affect the growth of the market's largest DRAM manufacturing companies. Samsung, as an example, has decided to increase production at the Line 12 and 16 plants as a means to compensate for the potential wafer losses resulting from the 25nm manufacturing process rather than to simply expand capacity. While the Korean company's DRAM wafer output is expected to be the same in 2014 as it was during 2013, the main focuses of its product mix will likely shift towards Mobile DRAM and Server DRAM.
With regard to SK Hynix, given that its Wuxi plant has been gradually making a recovery following the fire accident, as many as 30K wafers have been produced by the company during October. With its Korean plants also increasing total DRAM production, it should not be a problem for the companyís wafer production output to reach pre-fire accident levels by the end of the year. As the Wuxi plant undergoes a possible full recovery in 1Q14, the production at SK Hynix's Korean plants is expected to gradually decrease, and SK Hynix will begin to focus on advancing the manufacturing processes for its Mobile DRAM and PC DRAM product lines.
Following Micron's and Elpida's official announcement of their merger in 8/1, the two companies --now collectively known as the new Micron group-- will begin to develop and migrate towards the 20nm manufacturing process. The actual trial productions involving the said technology will likely be delayed to 1Q14, given the potential difficulties involved in the migration process. Nevertheless, the new Micron groupís major product development plans will remain largely unchanged, and, like Samsung, the major products of its future product mix are set to be Mobile DRAM and Server DRAM. Looking towards 2014, it appears the focuses of the main DRAM manufacturers will mostly be on adjusting product type and manufacturing technologies. In the event that the manufacturers' capacities are not expanded any further, the 2014 growth rate is likely to be only 28%, which is far lower than the 50% and above growth observed in the past (DRAM growth has been below 30% in the past three years). As the three biggest DRAM manufacturers begin to focus on profits more than market share, the market has a legitimate chance of returning to a steady state.