DRAM prices are expected to fall in the coming months due to oversupply

DRAM prices climbed during the first half of this year, but it looks like that trend is about to reverse. PC and server manufacturers now have enough stockpiles to last for more than two months, so prices will likely decrease as a result of the oversupply.

TrendForce’s latest market report is in, and it looks like DRAM prices have not only stabilized, but they’re expected to decline in the coming months by anywhere from three to right percent on average as a result of excess inventory buildup.

The report notes that if the current trajectory is maintained, memory shipments will slow down in the fourth quarter, as DRAM clients have been stockpiling a higher-than-expected level of DRAM inventory and DRAM suppliers are now overspilling with memory waiting to be delivered.

This is in stark contrast with the situation observed in the first two quarters, when Micron’s chief warned that DRAM shortages were threatening to send prices through the roof. As more people got vaccinated, demand for PCs, tablets, and smartphones has remained relatively stable, but most industry experts agree there will be a slowdown in the coming years.

TrendForce analysts offered a breakdown by market segment for their Q4 2021 price estimates. PC memory prices are expected to decline by anywhere from five to 10 percent, and even graphics memory prices could see a five percent dip in the coming months. Server DRAM suppliers have enough stock for over 10 weeks of shipments, which could exert a similar amount of pressure on server memory prices.

That said, market conditions can change at any time, and this report doesn’t give us any hints about DDR5 RAM prices. In a previous analysis, TrendForce estimated that in 2022, the average price of DDR5 memory will sit around 30 percent higher than that of DDR4 memory, but this will mostly be felt by data center operators.

Furthermore, the availability and pricing of graphics cards and many other electronics depends on more than just chips. For instance, even the lowly multi-layer ceramic capacitor is harder to come by. And now that rare earth metal prices have exploded, everything with electronics in it has a high chance of becoming costlier in the near future.