The PC DRAM market is in high stock and this oversupply is expected to lead to a significant price erosion in the first six months of 2019.
Market demand remains weak due to the low season and high inventory levels taken over from the previous quarter. Contract prices for DRAM products fell 15% in January compared to the previous month (MoM) and are expected to fall in February and March. The PC DRAM market is expected to contract 20% quarter-on-quarter in the first quarter of 2019, while the server DRAM market is expected to contract nearly 30% quarter-on-quarter.
According to the latest analysis by DRAMeXchange folks, the DRAM inventory problem for PCs and servers will continue in the second quarter of 2019. To solve inventory problems, a much longer period of time is required, even if demand is recovering somewhat. Emerging new technologies such as 5G and automotive electronics are at an early stage of development and will not have much impact on demand for DRAMs.
DRAM suppliers have reduced their production capacity, which should reduce the gap between supply and demand. The mobile DRAM market will have less price volatility, but demand for products remains too weak to prevent price erosion, experts say. Currently, the average contract price for 8GB PC DRAM modules is less than $45 and is expected to decrease by 25% by the end of this quarter.