In recent weeks, several companies have released warning statements that demand for client PCs and other consumer electronics is weakening. This tends, logically, to lead to oversupply and underpriced hardware components. Commodity Dynamic Random Access Memory (DRAM) prices serve as one of the best immediate indicators of oversupply or undersupply in the hardware market, and we believe we are in the midst of an oversupply. . trend force.
After seeing major DRAM makers furiously sacrificing selling prices, TrendForce expects consumer DRAM prices to fall 13% to 18% in Q3 2022, and further drop in Q4 2022. We expect a 3% to 8% decline. It is expected to drop up to 13% in Q3 and up to 5% in Q4.
Relatively low-capacity consumer DRAM chips aren’t exactly what PC makers use for their mainstream products (cheap tablets, netbooks, and Chromebooks still use low-capacity DDR4 ICs). ), the oversupply of consumer DRAM ICs indicates that the market is oversupplied. In general, we expect a PC DRAM price decline of 13% to 18% in Q3 2022 to follow this quarter.
It is difficult to estimate how much DDR4 and DDR5 prices will drop this quarter, but it seems likely that prices for these ICs will drop by at least 10% in the coming weeks and months. increase. Both AMD and Intel are rolling out new DDR5-supported platforms this fall, so of course we still don’t know how this will affect actual module pricing. Building a will almost certainly be more favorable in terms of price and performance than it was a few months ago.
When chips were generally in short supply (and many still are), PC makers and consumer electronics giants stockpiled memory to ensure stable production of their systems. But as demand for consumer desktops and laptops wanes, hardware his suppliers tend to use memory from their own inventories rather than buying new chips from DRAM manufacturers.
The big players in the field are already trying to compensate. To spur demand (and perhaps motivate PC makers to increase the memory content of their products), Samsung and SK hynix have slashed the price of their mainstream DRAM. Other suppliers (especially Micron) had to follow suit.
Earlier this week, Micron issued a statement claiming it. Due to macroeconomic challenges, we will be unable to meet our current quarterly revenue and bit shipment targets and will have to reduce our capital expenditures.
“Macroeconomic factors and supply chain constraints are driving customer destocking to a greater extent,” said Micron. filing with SEC reading. “As a result, our expectations for bit demand growth in the DRAM and NAND CY22 industries have declined since our earnings release on June 30, 2022, and we expect a tough market in Q4 2022 and Q1 2023. We expect fourth quarter 2022 earnings to be below the lower end of the earnings guidance range provided on our June 30 earnings call.”
In the first quarter of 2023, bit shipments are expected to gradually decline, leading to a significant decline in revenue and profit margins. […] In order to deal with the immediate environment, today, in addition to the WFE capital investment reductions that we explained at our financial results briefing on June 30, we are announcing new wafer fab equipment (WFE) capital investment reductions for FY2023. We expect our total capital expenditures to be significantly lower than in 2022. “
