DRAM Prices Set to Decline 3-8% in Q4 Due to High Levels of Inventory.

Clients stock up on DRAM

In the latest report from TrendForce, a Taiwanese semiconductor market analyst firm, we have an updated estimation DRAM pricing structure for the upcoming quarter. As the report notes, DRAM prices are set to decline by 3-8% in the fourth quarter of 2021 (4Q21), due to the rising inventory of DRAM clients.

According to the report for 4Q21, the DRAM supply is at a healthy pace to outrun the demand, creating a price decline in the DRAM market. This decline is projected to be anywhere from 3 to 8%, compared to DRAM prices in the previous period.

What is the reason for this you might wonder? Well, according to the research data, DRAM suppliers are carrying a very healthy amount of inventory for their clients to absorb, however, clients are stocking up what is considered an unhealthy amount of inventory, resulting in smaller demand for a new supply to be added.

The report breaks down the demand per specific computing segments, covering PCs, notebooks, servers, mobile markets and their demand. The pandemic-fuelled demand for PCs has weakened, with growth is seemingly slowing down. When it comes to servers, the demand has lead to massive inventory stocking, where suppliers have stock for more than 10 weeks of shipments, creating a price decline for the first time this year. And last but not least, the mobile market is set to stay in the place with pricing, as relatively high demand for smartphones is keeping the price relevant.

Generally speaking, the DRAM market can adjust to the market conditions, more precisely, to the supply and demand ratio. This means that if there are supply and / or demand changes prices will alter accordingly. This report has shown us some information regarding the upcoming period, but what the next year holds is still largely unknown.