DRAM contract prices forecast to grow only 13-18% in Q3

The relentless rise in memory prices may finally be losing steam, as PC and smartphone buyers reach the limits of what their budgets will allow them to pay. Taiwanese market watcher Trend Force estimates that rising DRAM contract prices drove a 59.5 percent quarter-on-quarter jump in industry revenue to $154.73 billion in calendar Q2. The analyst now expects conventional DRAM contract price growth to "moderate" to 13 to 18 percent quarter-on-quarter in Q3. That reflects a shift in demand away from high-capacity RDIMMs toward lower-capacity products, as well as "the limited ability of PC and smartphone customers to absorb further price increases." That 13 to 18 percent is still a punishing increase by any normal standard. Supplier inventories remain at historic lows, TrendForce warns, and total bit shipments are expected to grow modestly. In other words, prices are climbing more slowly and supplies are likely to remain tight for the forseeable future. The forecast follows a warning from market intelligence biz Context that European PC shipments are set to decline even more sharply as rising component costs push up system prices. Context forecasts a year-on-year decline in laptop shipments of 6.4 percent in Q3, followed by a 20 percent fall in Q4. The outlook is even worse for desktops, with shipments expected to decline around 20 percent in Q3 and almost 30 percent in Q4. Despite declining shipments, PC makers have continued to bring home the bacon, as higher prices have so far more than compensated for the fall in volumes. Earlier this year, The Register reported how Lenovo boasted it had sidestepped the fallout from the memory crisis by shifting its focus to premium devices. Context says corporate buyers are extending refresh cycles where possible and acquiring new PCs only when upgrades are unavoidable. "The PC refresh cycle has not disappeared, but the economics around it have changed," said Context senior analyst Marie-Christine Pygott. "For the channel, the opportunity is increasingly about helping customers prioritize where refreshes are essential, where devices can remain in service for longer and where investment in newer, more capable systems makes commercial sense." As for the AI PCs that manufacturers hoped would trigger a mass upgrade wave, Context says the end of Windows 10 support was the principal driver of recent buying activity, as The Register noted at the start of this year. While AI-capable PCs account for an increasing share of systems entering the European supply chain, this is mostly because AI functionality is becoming standard in newer devices. TrendForce notes that the three major memory makers continue to focus on high-end products for the AI market. Samsung benefited from its early move into HBM4 mass production, while SK hynix had the highest proportion of HBM in its total bit shipments among the three leading suppliers. Micron is prioritizing higher-priced server DRAM. That has left second-tier manufacturers such as Nanya, Winbond, and PSMC to meet demand for mature-process products such as DDR4 and DDR3. ®