Wednesday, April 10th 2024
DRAM Manufacturers Gradually Resume Production, Impact on Total Q2 DRAM Output Estimated to Be Less Than 1%
Following in the wake of an earthquake that struck on April 3rd, TrendForce undertook an in-depth analysis of its effects on the DRAM industry, uncovering a sector that has shown remarkable resilience and faced minimal interruptions. Despite some damage and the necessity for inspections or disposal of wafers among suppliers, the facilities' strong earthquake preparedness of the facilities has kept the overall impact to a minimum.
Leading DRAM producers, including Micron, Nanya, PSMC, and Winbond had all returned to full operational status by April 8th. In particular, Micron's progression to cutting-edge processes—specifically the 1alpha and 1beta nm technologies—is anticipated to significantly alter the landscape of DRAM bit production. In contrast, other Taiwanese DRAM manufacturers are still working with 38 and 25 nm processes, contributing less to total output. TrendForce estimates that the earthquake's effect on DRAM production for the second quarter will be limited to a manageable 1%.
Minimal impact from earthquake leads to limited benefit as increases to Q2 DRAM contract prices expected
Following the earthquake, TrendForce reported a widespread halt in quotations for both contract and spot DRAM markets. Since then, spot market quotations have largely resumed, but contract prices have not fully restarted. On the day of the earthquake, Micron and Samsung completely stopped issuing quotes for mobile DRAM, with no updates provided as of April 8th. On the other hand, SK hynix took a proactive approach by resuming quotations for smartphone customers on the day of the earthquake. SK hynix's proposed price adjustments for Q2 mobile DRAM are notably more moderate compared to other suppliers, likely moderating pricing strategies across the industry. TrendForce anticipates a seasonal contract price increase for Q2 mobile DRAM of approximately 3-8%.
For server DRAM, the earthquake primarily affected Micron's advanced manufacturing processes. Consequently, TrendForce suggests that the final sale prices for Micron's server DRAM could rise, though the exact direction of future prices awaits further observation. On the HBM front, the majority of Micron's production of HBM 1beta and TSV is based in Hiroshima, Japan. This location was not impacted by the earthquake, leading to stable supply levels and unchanged prices.
The spot market has seen some module makers, such as Kingston and ADATA, recommence quoting without adjusting prices upwards, underscoring the earthquake's limited capacity to propel price increases. Given the scarcity of DDR3 inventory, there remains some upward pricing potential, whereas the abundant inventory levels for DDR4 and DDR5, paired with tepid demand, suggest that the slight price elevations caused by the earthquake are expected to normalize swiftly.
Source:
TrendForce
Leading DRAM producers, including Micron, Nanya, PSMC, and Winbond had all returned to full operational status by April 8th. In particular, Micron's progression to cutting-edge processes—specifically the 1alpha and 1beta nm technologies—is anticipated to significantly alter the landscape of DRAM bit production. In contrast, other Taiwanese DRAM manufacturers are still working with 38 and 25 nm processes, contributing less to total output. TrendForce estimates that the earthquake's effect on DRAM production for the second quarter will be limited to a manageable 1%.
Following the earthquake, TrendForce reported a widespread halt in quotations for both contract and spot DRAM markets. Since then, spot market quotations have largely resumed, but contract prices have not fully restarted. On the day of the earthquake, Micron and Samsung completely stopped issuing quotes for mobile DRAM, with no updates provided as of April 8th. On the other hand, SK hynix took a proactive approach by resuming quotations for smartphone customers on the day of the earthquake. SK hynix's proposed price adjustments for Q2 mobile DRAM are notably more moderate compared to other suppliers, likely moderating pricing strategies across the industry. TrendForce anticipates a seasonal contract price increase for Q2 mobile DRAM of approximately 3-8%.
For server DRAM, the earthquake primarily affected Micron's advanced manufacturing processes. Consequently, TrendForce suggests that the final sale prices for Micron's server DRAM could rise, though the exact direction of future prices awaits further observation. On the HBM front, the majority of Micron's production of HBM 1beta and TSV is based in Hiroshima, Japan. This location was not impacted by the earthquake, leading to stable supply levels and unchanged prices.
The spot market has seen some module makers, such as Kingston and ADATA, recommence quoting without adjusting prices upwards, underscoring the earthquake's limited capacity to propel price increases. Given the scarcity of DDR3 inventory, there remains some upward pricing potential, whereas the abundant inventory levels for DDR4 and DDR5, paired with tepid demand, suggest that the slight price elevations caused by the earthquake are expected to normalize swiftly.
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