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The huge image: DRAM pricing continued its decline in the latest quarter, additional proof that the pandemic-induced demand growth for electronics could lastly be within the rearview. That’s nice information for buyers, however the chain response from replenished stock ranges is just going to create extra complications for producers.
TrendForce (paywalled, through The Wall Street Journal) mentioned the typical contract value of DRAM fell by 10.6 p.c within the second quarter in comparison with the identical interval a yr earlier. According to the market analysis agency, it is the primary year-over-year decline in two years. Further declines are anticipated within the coming months.
DRAM pricing peaked within the fall of 2021 as demand for shopper electronics spiked, largely because of the do business from home development. Semiconductor shortages and manufacturing slowdowns solely exacerbated the issue. The pendulum has since swung within the different path as demand for smartphones, PCs and different devices has slowed amid inflation considerations.
Looking forward to the third quarter, TrendForce believes DRAM pricing will slide by practically 10 p.c quarter over quarter. The server section, the place demand is sort of secure, may closely affect costs and if a struggle develops between rivals for gross sales, costs may dip much more.
What we’re seeing within the DRAM business is a series response. Cooling demand results in replenished stock ranges, in flip releasing up manufacturing capability. This may impression growth plans that a number of firms introduced in the course of the pandemic to deal with unprecedented demand.
Micron, the third largest DRAM maker, just lately mentioned it could dial again growth plans and capital bills.
Image credit score: Sergei Starostin, Sven Finger
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