DRAM Industry Likely To Face Oversupply in 2019 (digitimes.com)

While the global DRAM market still remains robust currently, the recent capacity ramps by Micron Technology and the planned kick-off of commercial production by China-based Fujian Jin Hua Integrated Circuit and Innotron Memory (previously known as Hefei ChangXin) could lead to oversupply for the memory in 2019, Taiwanese newspaper DigiTimes reported Thursday, citing industry sources. From the report: Samsung Electronics and SK Hynix would be forced to overhaul their current profit-oriented business strategy as both firms believe that the booming memory market, which has continued for 2-3 years, is likely to be over by the end of 2018, according to a Korea-based Digital Times report. Although Samsung and SK Hynix both stated, at their latest investors conferences, respectively, that they will continue to ramp up capacities for memory chips, the aggressive moves by rival companies have made the two companies hesitate, said the report.

Samsung has seen its share in the DRAM market continue to dive after hitting a high of 50.2% in the third quarter of 2016 as rivals including Micron have jacked up their revenues and profits. Notably, Micron has ramped up its operating margin to as high as 50% so far in 2018 compared to 20% at the end of 2016. Additionally, Samsung saw its share in the market drop to 44.4% in the first quarter of 2018, while Micron managed to ramp up its share to 23.1%, according to IHS Markit. The global DRAM market is expected to reach a peak of US$104 billion in 2018, before contracting by 1.8% and 2.6%, respectively, in 2019 and 2020, according to an industry estimate.

Comments

Good.

[Guyle]

Maybe an oversupply will bring the prices down a bit from being gawdawfully high.

Re:Good.

[Anubis IV]

RAM price trends for the last 18 months: https://pcpartpicker.com/trend...

Broadly speaking, RAM is roughly twice the price that it was two years ago, all other things being equal (e.g. from $38 to $80 and from $200 to $425), though prices seemed to have peaked sometime around the start of 2018, with them being on a very gradual decline ever since.

At the time that the price hikes started, people were saying it was due to several factories being retooled at the same time, and that we should expect the pricing to return to normal in about 1.5-3 years as those factories came back up and new ones were built to handle the increasing demand in the market. Well, it's been about that long, and sure enough, prices seem to have stabilized, may have even started to drop, and now we have more reason to believe that they'll be returning to normal(ish) soon as additional production capacity arrives in the market.

I'll believe it when I see it as well, but, at least so far, this jibes with what I've been expecting.