Falling demand from PC and server makers leads to falling memory chip prices

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Prices for flash memory chips used in PCs, servers, smartphones, GPUs and other devices are expected to decline for the rest of this year, thanks to TrendForce Corp. said to be the impact of high inflation.

The Taiwanese research firm said today that dynamic random access memory chip prices for commercial buyers are expected to fall 3% to 8% in the third quarter from the previous three months. He expects these reduced costs to be passed on to buyers as DRAM buyers struggle to drive demand for their end products.

With inflation on the rise almost everywhere in the world, one could be forgiven for thinking that DRAM prices might rise. However, TrendForce said inflation had a negative impact on demand for consumer electronics, including personal computers and smartphones, as well as things like enterprise computer servers. So while some system vendors and distributors might be tempted to take advantage of lower DRAM prices, they likely won’t be able to do so.

The problem is that weaker demand for electronics means DRAM inventories are piling up at these system vendors and distributors. They won’t need to buy nearly as much DRAM as they used to, which is why prices are coming down, TrendForce said.

In the PC market, TrendForce said prices for double data rate 4 synchronous DRAMs are expected to fall 3% to 8% over the next three months, after falling less than 5% in the second quarter. Meanwhile, prices for double data rate 5 synchronous DRAM are expected to fall as much as 5%, after already falling 3% to 8% in the prior quarter. TrendForce said that for now, PC makers are focused on depleting their existing DRAM inventory and are therefore reluctant to buy much more.

It’s a similar story in the world of smartphone makers, who have amassed similar stocks of DRAM chips. With weak market sales growth, especially for handsets with higher memory capacities, TrendForce estimates that DRAM prices will fall by 3% to 8%.

Server memory chips will see their prices fall by up to 5%, TrendForce said. Additionally, memory used for graphics processing units will experience a similar price drop.

The main benefit of all of this is that if system vendors and distributors pass the lower costs on to end buyers, Q3 could be a really good time to buy a load of servers or upgrade a few high-end PCs. , given that prices have already fallen this year.

Main image: rawpixel.com/Freepik

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