The panic buying of chips persisted in 2Q21 owing to factors such as post-pandemic demand, industry-wide shift to 5G telecom technology, geopolitical tensions, and chronic chip shortages, according to TrendForce's latest investigations. Chip demand from ODMs/OEMs remained high, as they were unable to meet shipment targets for various end-products due to the shortage of foundry capacities. In addition, wafers inputted in 1Q21 underwent a price hike and were subsequently outputted in 2Q21. Foundry revenue for the quarter reached US$24.407 billion, representing a 6.2% QoQ increase and yet another record high for the eighth consecutive quarter since 3Q19.

The stay-at-home economy remains robust due to the ongoing COVID-19 pandemic, so the sales of gaming products such as game consoles and the demand for related components are being kept at a decent level, according to TrendForce's latest investigations. However, the values of cryptocurrencies have plummeted in the past two months because of active interventions from many governments, with the graphics DRAM market entering into a bearish turn in 3Q21 as a result. While graphics DRAM prices in the spot market will likely show the most severe fluctuations, contract prices of graphics DRAM are expected to increase by 10-15% QoQ in 3Q21 since DRAM suppliers still prioritize the production of server DRAM over other product categories, and the vast majority of graphics DRAM supply is still cornered by major purchasers.

It should be pointed out that, given the highly volatile nature of the graphics DRAM market, it is relatively normal for graphics DRAM prices to reverse course or undergo a more drastic fluctuation compared with other mainstream DRAM products. As such, should the cryptocurrency market remain bearish, and manufacturers of smartphones or PCs reduce their upcoming production volumes in light of the ongoing pandemic and component supply issues, graphics DRAM prices are unlikely to experience further increase in 4Q21. Instead, TrendForce expects prices in 4Q21 to largely hold flat compared to the third quarter.

The massive rise in market demand for notebook computers in response to distance learning needs and WFH applications from 2020 to 2021 has generated not only a double-digit growth in notebook panel shipment, but also a price hike of more than 40% for notebook panels, according to TrendForce's latest investigations. As various suppliers subsequently scramble to manufacture OLED, LTPS, and oxide panels, TrendForce forecasts these high-end notebook panels to reach a 17.8% market share in 2021 and 21.4% in 2022.

Panels based on OLED technology are primarily supplied by SDC, whose OLED notebook panel shipment for 2020 reached 800,000 pcs. SDC is expected to ship more than four million pcs of OLED notebook panels in 2021, with room for further growth in 2022. In addition to SDC, EDO is also expected to begin mass producing OLED notebook panels in 2H21-1H22. As such, TrendForce expects OLED panels to reach a 1.3% penetration rate in the overall notebook panel market this year. Although BOE and CSOT are currently fully engaged in Hybrid OLED development, Hybrid OLED panels will not enter mass production until 2023 due to technological and cost-related bottlenecks that are yet to be resolved.

The recent wave of COVID-19 outbreaks in India has weakened sales of retail storage products such as memory cards and USB drives, according to TrendForce's latest investigations. However, demand remains fairly strong in the main application segments due to the arrival of the traditional peak season and the growth in the procurement related to data centers. Hence, the sufficiency ratio of the entire market has declined further. NAND Flash suppliers have kept their inventories at a healthy level thanks to clients' stock-up activities during the past several quarters. Moreover, the ongoing shortage of NAND Flash controller ICs continues to affect the production of finished storage products. Taking account of these demand-side and supply-side factors, TrendForce forecasts that contract prices of NAND Flash products will rise marginally for 3Q21, with QoQ increases in the range of 5-10%.

As third quarters have typically been peak seasons for the production of various end-products, the sufficiency ratio of DRAM is expected to undergo a further decrease in 3Q21, according to TrendForce's latest investigations. However, DRAM buyers are now carrying a relatively high DRAM inventory due to their amplified purchases of electronic components in 1H21. The QoQ increase in DRAM contract prices are hence expected to slightly narrow from 18-23% in 2Q21 to 3-8% in 3Q21. Looking ahead to 4Q21, TrendForce believes that DRAM supply will continue to rise, thereby leading to either a further narrowing of price hikes or pressure constraining the potential price hike of DRAM products.

From the perspective of demand, the stay-at-home economy has resulted in persistently high demand for notebook computers. Although discrepancies still exist among notebook brands' inventory levels of various components, these brands are still making an aggressive attempt at maximizing their production of notebooks. However, as most of these brands are still carrying about 8-10 weeks' worth of PC DRAM inventory (which is relatively high), PC DRAM purchasing strategies from the buyers' side will therefore remain relatively conservative. From the perspective of supply, due to the rising demand for server DRAM, the production capacity allocated to PC DRAM is still in a severe supply crunch. Hence, DRAM suppliers are firm in their attitudes to raise PC DRAM quotes, and TrendForce expects the price negotiations between PC DRAM buyers and suppliers in 3Q21 to become both lengthier and more difficult as a result, with contract prices likely finalized at the end of July. Even so, what is now certain is that both sides have reached some level of understanding regarding the ongoing price hike of PC DRAM products. TrendForce forecasts a 3-8% increase in PC DRAM contract prices for 3Q21.

The German media outlet, 3D Center, has today published an updated report for July, measuring graphics card pricing in Germany and Austria, showing some pretty interesting results. The report is only measuring the pricing index of these two countries and their retailers, so it does not apply to other regions. An interesting discovery is that GPU prices have now hit the lowest point since February of this year when the sharp price incline started. At the time of reporting, GPU prices are exaggerated by around 53% over the MSRP listed prices. Not only did the prices drop, but the supply of GPUs like AMD Radeon RX 6800, Radeon RX 6800 XT, and the NVIDIA GeForce RTX 3060 Ti became much better, as consumers can get their hands on these now.

When looking at the graph below, note that MSRP is listed as 100%, and the percentage shown is the increase over that MSRP. When it comes to complete price reduction to the MSRP, 3D Center expects it to happen in 3-4 weeks possibly. If current data is to be believed, MSRP is slowly decreasing and supply is increasing rapidly. For more details and per-card pricing situation, head over to 3D Center website here. Here is an important statement from 3D Center about the current situation:

3D Center (translated from German)Of course, this means that current street prices for graphics cards are (mostly) still exaggerated - and above all that this is the worst possible time to buy a graphics card. Because the (now clearly verifiable) tendency points to clearly lower graphics card prices in the next few weeks, with a similar pace, street prices at list price level could be in sight in 3-4 weeks. It is possible that there will be a certain braking effect in the downward price movement beforehand - but at least the way up to that point should definitely be taken with you. Apparently the delivery quantities are currently sufficient, maybe the need is a bit lower because of the summer times (and no longer available on the part of the crypto miners)so that retailers receive more cards than they sell. Since the retailers usually bought their cards from the distributors at an exaggerated price, the big game is now about who can get rid of the expensive stock goods in time to make a profit at all in the face of constantly falling sales prices.

TrendForce's investigations find that DRAM suppliers and major PC OEMs are currently participating in the critical period of negotiating with each other over contract prices for 2Q21. Although these negotiations have yet to be finalized, the ASP of mainstream DDR4 1G*8 2666 Mbps modules has already increased by nearly 25% QoQ as of now, according to data on ongoing transactions. This represents a higher price hike than TrendForce's prior forecast of "nearly 20%". On the other hand, prices are likewise rising across various DRAM product categories in 2Q21, including DDR3/4 specialty DRAM, mobile DRAM, graphics DRAM, and in particular server DRAM, which is highly related to PC DRAM and is therefore also undergoing a higher price hike than previously expected. TrendForce is therefore revising up its forecast of overall DRAM price hike for 2Q21 from 13-18% QoQ to 18-23% QoQ instead. However, the actual increase in prices of various DRAM product categories will depend on the production capacities allocated to the respective products by DRAM suppliers.

In the upstream semiconductor industry, the major foundries such as TSMC and UMC are reporting fully loaded capacities, while in the downstream, the available production capacity for OSAT is also lacking, according to TrendForce's latest investigations. Given this situation, suppliers of NAND Flash controller ICs such as Phison and Silicon Motion are now unable to meet upside demand from their clients. Not only have many controller IC suppliers temporarily stopped offering quotes for new orders, but they are also even considering raising prices soon because the negotiations between NAND Flash suppliers and module houses over 1Q21 contracts are now at the critical juncture. The potential increases in prices of controller ICs from outsourced suppliers (IC design houses) are currently estimated to be the range of 15-20%.

With regards to the demand side, demand has risen significantly for eMMC solutions with medium- and low-density specifications (i.e., 64 GB and lower), for which NAND Flash suppliers have mostly stopped updating the NAND Flash process technology, while maintaining support with the legacy 2D NAND or the 64L 3D NAND process. This is on account of strong sales for Chromebook devices and TVs. As older processes gradually account for a lowering portion of bit output proportions from NAND Flash suppliers, these companies are exhibiting a lowered willingness to directly supply such eMMC products to clients. As a result, clients now need to turn to memory module houses, which are able to source NAND Flash components and controllers, to procure eMMC products in substantial quantities.

Semiconductor manufacturing is a risky business. Not only is it heavily capital-intensive, which means that even some state-backed would-be players can fail in pooling together the required resources for an industry break-in; but the entire nature of the manufacturing process is a delicate balance of materials, nearly-endless fabrication, cleanup, and QA testing. Wafer manufacturing can take months between the initial fabrication stages through to the final packaging process; and this means that power outages or material contamination can jeopardize an outrageous number of in-fabrication semiconductors.

Recent news as covered by DigiTimes place one of Micron's fabrication plants in Taiwan as being hit with a 1-hour long power outage, which can potentially affect 10% of the entire predictable DRAM supply for the coming months (a power outage affects every step of the manufacturing process). Considering the increased demand for DRAM components due to the COVID-19 pandemic and associated demand for DRAM-inside products such as PCs, DIY DRAM, laptops, and tablets, industry players are now expecting a price hike for DRAM throughout 2021 until this sudden supply constraint is dealt with. As we know, DRAM manufacturers and resellers are a fickle bunch when it comes to increasing prices in even the slightest, dream-like hint of reduced supply. It remains to be seen how much of this 10% DRAM supply is actually salvageable, but projecting from past experience, a price hike seems to be all but guaranteed.

Prices of mid-range and high-end graphics cards could rise over the course of 2018, warns a report by Taiwan-based industry observer DigiTimes. The report quotes a USD $5-20 increase (we're guessing that's bill-of-material/BOM cost). Tight supply of memory chips and GPUs are attributed to the price hikes. Crypto-currency mining is a key factor, according to the report. Demand for graphics cards by miners hasn't waned (perhaps associated with Ethereum's all-time high value), which could further strain graphics card supplies throughout 2018.

Major Taiwan-based graphics card vendors, such as ASUS, MSI, GIGABYTE, benefited from the GPU-accelerated crypto-currency mining boom of 2017, and sales went down only slightly towards Q4-2017. On the other end of the spectrum, rising popularity of online multi-player games such as "Player Unknown's Battlegrounds," has triggered PC upgrades, further straining graphics card supply, the report states.

Overclockers UK staff member Gibbo, who posted the renowned British company's Vega stocks and deals for the red team's graphics cards, has just come out with something that might put our inner buyers to attention. Apparently, AMD has allowed launch prices to be as they currently are ($499 for the Vega 64 and $399 for the Vega 56 in the Americas; £549 for the Vega 64 in the UK) through rebates and other offers to retailers, who, according to Gibbo, couldn't keep those prices at all if that was not the case. According to the Overclockers UK staffer, " (...) the good news is AMD are rebating early launch sales to allow us to hit £449.99 on the stand alone black card which has no games. This is a launch only price which AMD at present are saying will be withdrawn in the near future, when if it happens is unknown, but remember do not be shocked if the price jumps nearly £100 in a few days. This time around there is no early adopter tax, quite the opposite on the stand alone black card, so do be quick."

Continuing the trend of previous reports, DRAMeXchange, a division of TrendForce, reports the general price increase in the PC DRAM market is growing larger than anticipated as the already tight supply situation is compounded by quality problems with products made on the leading-edge processes. Based on a preliminary survey of completed contracts for the second quarter, DRAMeXchange estimates that the average contract price of 4GB DDR4 modules will go up by about 12.5% compared with the first quarter, from US$24 to around US$27.

"PC-OEMs that have been negotiating their second-quarter memory contracts initially expected the market supply to expand because Samsung and Micron have begun to produce on the 18 nm and the 17 nm processes, respectively," said Avril Wu, research director of DRAMeXchange. "However, both Samsung and Micron have encountered setbacks related to sampling and yield, so the supply situation remains tight going into the second quarter and PC DRAM prices will continue to rise through this three-month period."

Market intelligence analysis company TRENDFOCUS revealed in its latest blog post how SSD market has increased by up to 36% in the last four quarters, with price hikes after prices hikes accompanying increasing demand (and sales) of the speedy storage media. And TRENDFOCUS warns that these price hikes are like here to stay until 2017 has run its course, with projections of price reductions only materializing in early 2018. This should put some brakes towards the trend of including SSD storage on mainstream OEM computers and laptops, as the price increase from adding this type of storage would bring prices beyond the mainstream. Likewise, the aggressive ratio at which SSDs were replacing HDDs as storage media as correspondingly declined a bit, though this move still stays strong and isn't likely to (nor should it) fully subside.

The company also sees an increasing pricing delta between conventional SATA-based solutions and their higher-performing PCIe counterparts, with the pricing of PCIe-based SSDs increasing more than those that leverage SATA connections. TRENDFOCUS reports how 2017 pricing hinges on 3D NAND ramping as predicted this year, with higher prices in the demand-heavy back-to-school season) if this ramp fails. The company still feels confident about an eventual return to quarterly takedowns on SSD pricing, coeteris paribus, come 2018.

DRAMeXchange, a division of TrendForce, today reported that the average contract price of 4GB PC DRAM modules increased over 20% between September and October of 2016 (jumping from US$14.5 to US$17.5) as DRAM suppliers completed their fourth-quarter contract negotiations with first-tier PC-OEMs.

These increases come as the result of production capacity gradually shifting from PC-centric DRAM towards mobile and server DRAM, which have seen tremendous growths in demand. In fact, PC DRAM memory accounts for less than 20% of overall DRAM production. The already low inventories of branded device makers go hand in hand with higher-than-expected demand for DRAM-carrying products. And this higher demand comes after the PC DRAM market being severely undersupplied in the second half of 2016. The result: an across-the-board price upturn for all types of DRAM.

Peak season demand and surging prices for DRAM products across different applications resulted in an 18.2% sequential growth in the global DRAM revenue for the final quarter of 2016, reports DRAMeXchange, a division of TrendForce.

Smartphone shipments peaked in the fourth quarter on account of the traditional busy season. Chinese smartphone brands continued to post strong sales while Apple benefitted from the release of iPhone 7. "Rising demand for mobile DRAM kept squeezing the industry's production capacity for PC DRAM," said Avril Wu, research director of DRAMeXchange. "Contract prices of PC DRAM modules increased by more than 30% sequentially on average in the fourth quarter due to insufficient market supply. Server DRAM lagged behind PC and mobile DRAM in terms of price hike during the same period, but it is expected to catch up in the first quarter of this year."

Prepare for your RAM to cost you a little bit more early next year! According to the chairman and CEO Simon Chen for Taiwan-based memory module maker Adata Technology the previous cuts in DRAM production will begin to take effect in early January thus effecting the consumers bottom line. He is quoted as saying, "The rebound is mainly because cuts in DRAM output will begin to take effect, PC makers will replenish DRAM inventories and so will buyers on the spot market in January.' He also said, 'PC makers are expected to hike inventory level from two weeks to one month."

Mr. Chen went on to say, "The popularity of Ultrabook PCs will reduce demand for DRAM, but total demand for DRAM will not decrease because of large potential demand for server DRAM arising from fast growth in cloud computing-based applications. However, large demand for Ultrabook PCs will take off when prices fall to US$599 and they are equipped with Microsoft Windows 8." In tough economic times this is a bitter pill to swallow but to be expected given the laws of supply and demand.