TAIPEI -- The interference in pricing by China's National Development and Reform Commission last quarter is still having an effect on the mobile DRAM market, causing quoting to be more conservative, new analysis suggests.
Quotes of mobile DRAM products have not gone up as much compared with quotes of DRAM products for other applications, adds DRAMeXchange, a division of TrendForce. For discrete mobile DRAM products, the sequential quarterly increases in quotes were within 1% on average. The quotes of eMCP products actually fell by 1% sequentially on average due to the slide in NAND flash prices.
For the third quarter, DRAMeXchange forecasts total smartphone production volume will increase five to 10% sequentially ahead of the traditional busy season. On the supply side, SK Hynix and Micron are expected to raise their wafer starts. This together with the overall advancement in technology migration and yield rate improvement may bring some ease to the strain in supply. DRAMeXchange thus anticipates that the overall trend of contract prices in the third quarter will not deviate noticeably sequentially. Prices of discrete products are expected to be stable or go up a bit, while prices of eMCP products are expected to either stay constant or go down slightly
From the perspective of market demand, upstream memory suppliers are now keen on offering eMCP products that contain more NAND Flash at lower prices. This promotion is intended to spur the consumption of the overall NAND flash capacity. Flagship smartphones that are being released during this half from Chinese brands including Huawei, Xiaomi, Oppo and Vivo also reveal the push toward eMCP products with higher NAND flash density. The majority of Chinese flagships to be released during this period are expected to carry 128GB+48Gb, an upgrade from the mainstream specification of 64GB+32Gb of last year’s flagships.
Although raising the NAND Flash density in eMCP products can significantly moderate the supply-driven price decline in the NAND flash market caused by the expansion of 3D-NAND production, this action is also tightening the supply of mobile DRAM for eMCP. For instance, the average DRAM density of eMCP products for the majority of flagship smartphones has already increased from from last year’s 32Gb to current 48Gb. The promotion of eMCP products will therefore aggravate the undersupply of eMCP and discrete products that use LPDDR4X DRAM, as the share of smartphones carrying LPDDR4X components will increase in the second half after new iPhones and Android flagships are released. Moving forward, securing the supply of LPDDR4X components and negotiating their prices will be much more challenging.
DRAMeXchange notes that, although prices of DRAM products for PCs and servers continue to rise in the first half, large price fluctuations generally do not apply to mobile DRAM products, because they vary in density specifications and are limited in terms of compatibility with application processors that work either with only eMCP or with only discrete. The increasing cost pressure faced by smartphone vendors also needs to be considered. If the DRAM suppliers increase the contract prices, less smartphone vendors will be willing to increase the memory density of their models. Hence, both increase and decrease in prices of mobile DRAM products tend to be gradual rather than sharp.
