Supply Status update
Compared with previous quarter updated, worldwide bit growth prediction increased from 21% to 23%. The ramping status is better than expected even with some advanced process reliability issue occurred.
The weak smartphone market in 2018 brought a product mix problem to vendors. The DRAM vendor might face some issues in 3Q18. However, this issue will not change the current oversupply condition.
Foresee the 4Q18, Mobile DRAM and Server RDIMM portion would increase compared with 3Q18. Consumer and Graphic DRAM shipment would slightly decrease after 3Q hot season. Micron is aggressive on Server DIMM’s penetration in 3Q18 with the ramping of 1Xnm RDIMM.
Without the impact from the China DRAM vendors, the overall 2019 bit growth might be around 20%. It’s because of poor migration efficiency and few capacity increasing compared with 2018. However, the overall bit might increase more than 20% if the ramping of China Fab is significant.
Demand Status update
PC OEMs is banking inventory in 2Q18 and 3Q18, most of vendors inventory might reach ~6Wks in the end of 3Q18. In 4Q18, PC OEMs might tend to reduce their inventory level since 1Q19 is the traditional slow season and it seems no supply shortage issue in 2019.
Regarding the stable Server market, the demand in 3Q18 is not as strong as 2Q18 by bit consumption QoQ growth rate. The demand side would increase their inventory level in 3Q18 and reach more than 4 wks inventory in average. China Datacenter demand decreased slightly compared with original plan.
The smartphone shipment reached the peak in 2017, the unit shipment might decrease low single digit in 2018. The 1H18 sales was poor, especially Samsung mobile. They decreased 5% YoY in 1H18 and might decrease around 7% YoY in 2018. In this year, Huawei and XiaoMi have outstanding performance compared with other Chinese vendors. Their shipment growth is strong and gaining share from Samsung. The iPhone shipment is good and the 2Q18 shipment is better than our prediction. We may expect low single digit unit decline in 2019 as well and we may see shipment increase again in 2021.
Graphic DRAM demand slow down in 2Q18 because of weak cryptocurrency mining demand. However, the IPTV/GPON demand comes back in 3Q18 after ZTE’s US ban issue solved.
We are not expecting high bit demand growth in 2019, except server market, rest of segments will grow less than the industrial bit growth.
Price Trend
Channel Market
The Channel module demand was weak in 2Q18 and early 3Q18. From 2Q18, 8Gb x8 DDR4 White Brand ASP declined around 16% to $6.5 as low price, and the 8Gb x8 Original Brand low side ASP decreased 10% to $7.78. However, the channel inventory level is related high and it’s not easy to go down in 2H18.
For the consumer market, 4Gb x16 DDR3 original brand price decreased around 5% to $2.95 in 2Q18 as the low price, and the price decrease more significant in 3Q18 after Samsung’s official contract releasing. In this month, we may see 2G DDR3 and 4G DDR4 demand increase from IPTV/GPON tender case in China market, but the price keeps dropping. The distributors and brokers are trying to digest their inventory.
Contract Price forecast
With high inventory level for PC OEMs, the 3Q18 UDIMM price increased less than 1% in average. And we are expecting the official price keeps flat price in 4Q18. 32GB RDIMM price increased around 1.4% in 3Q18, and expecting increase another 1% in 4Q18. However, the RDIMM price predication could be adjusted if Mobile DRAM ASP and demand decrease more than current prediction.
Regarding the PoP price for Mobile market, it’s slightly increased, some vendor provide lower Price compared with 2Q18, but some vendor did increase their selling price in 3Q18. However, the ASP should start declining in 4Q18 due to weak smartphone demand and vendors will try to increase the bit shipment or share from major smartphone vendor by price promotion.