DRAM Prices To Decline By 10% In Q3 2022, Suppliers Ready To Accept Price Cuts Based on Low Consumer Demand

DDR5 & DDR4 DRAM Prices To Drop By Up To 8% Due To Inflation & Russian-Ukrainian War Crisis

TrendForce found that with the rapid decline of demand from consumers in the first half of this year, some suppliers of DRAM have begun communicating to manufacturers to cut prices to lower the pressure of increasing inventory, especially in the somewhat stable server marketplace. In turn, quarter three of 2022 may see a drop in DRAM pricing from as low as three percent previously to as high as ten percent, if not higher, causing pressure in the retail space.

The decline of DRAM demand from sellers and buyers is causing suppliers to intervene and pressure manufacturers to drop their retail pricing in the next half of 2022

PC manufacturers continue to lessen the shipping timeframes, with suppliers now receiving new stock in two months. This procedure is intentional unless those companies see more motivation through adjustments in pricing since the demand is currently lower than the norm. However, with the adjustment to the new next-gen 1Z / 1 alpha process technology (chips being processed on a single alpha node), there was a positive change in the last quarter of 2022. Also, with the limitation of having more systems using DDR5 over DDR4 memory, the percentage of decline in the market changed to between five and ten percent.

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Consumer DRAM Prices Expected To Drop 18% In Q3 2022
Source: TrendForce

PC server DRAM client inventory levels are replenished at most every eight weeks. According to the research study, DRAM prices will continue to plummet because of the leftover inventory in the seller's possession. Sellers are hoping to have manufacturers offer lower and more attractive pricing, which would help with the stagnant list pushed out of the warehouses. So far, Korean DRAM manufacturers have begun to lower prices by slightly over five percent for server memory in the third quarter of 2022.

The smartphone economy is most volatile, especially when new products are released at the end of the third quarter to prepare for the holiday season. The constant adoption of new technology in the mobile DRAM market is forecasted to increase as high as 13% this quarter.

DRAM memory for graphics has seen an impact due to product demand and the decline of cryptocurrency markets. The effect has caused the need to lessen and put suppliers to adjust the output to increase inventory levels quickly. The forecasted fall is set to be as high as eight percent.

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