DRAM Prices Expected to Increase up to 10% in Q4 2017

DRAM prices for Q4 2017

DRAM prices have increased over the past few months and the trend still continues. According to market research firm DRAMeXchange, contract prices for DRAM chips rose by about 5% on average in the third quarter and the fourth quarter should see even a more pronounced increase.

With the rise in contract prices, revenue of the global DRAM industry in the third quarter advanced by 16.2% from the second quarter to $19.2 billion. The three largest memory suppliers Samsung, SK Hynix and Micron grew their revenue by 15.2%, 22.5% and 13.0% respectively, from the second quarter. Together, they captured over 95% of the market share.

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DRAM prices to increase in Q4

The increase in DRAM prices is mainly attributed to the high demand for mobile DRAM chips as the electronics industry geared up for the holiday season. Avril Wu, a research director at DRAMeXchange, expects DRAM prices will increase about 10% in the fourth quarter.

“Depending on the capacity specifications, prices of mobile DRAM products could go up by 10 percent to 20 percent in the fourth quarter compared with the third,” Wu said in a press statement. “As for the server DRAM market, strong demand during the fourth quarter also will push up contract prices of memory modules by 6 percent to 10 percent from the previous three-month period.”

Prices of the DRAM devices have increased sharply for end users since mid-2016. For example, a 4GB DDR4-2133 Kingston ValueRAM memory module currently costs 40 euros, compared to just 12 euros in the summer of 2016. This corresponds to a whopping 233% increase. Similarly, DDR3 chips have also seen a price increase of up to 200% over a year ago.

A shortage of DRAM capacity combined with its use in more types of products is helping drive DRAM sales to a historic high in 2017. Market research firm IC Insights recently forecast that the DRAM market will grow by 74% this year, marking the largest growth rate since the 78% DRAM market increase in 1994.