Market-watcher Gartner has predicted a 42 percent decline in pricing for dynamic RAM (DRAM) components due to oversupply, while simultaneously predicting a 9.6 percent drop in overall semiconductor revenue.
Memory pricing has been on a downward trend for some time: Market highs in 2018 gave way to a a free-fall crash this year with market analyst DRAMeXchange predicting a further 25 percent decline in June this year. Now Gartner has weighed in with a prediction that things are going to slide even further with a 42 percent drop by the end of the year. The reason: Oversupply caused by a weaker than expected market, with DRAM manufacturers sitting on around three months' stock.
'The semiconductor market is being impacted by a number of factors. A weaker pricing environment for memory and some other chips types combined with the U.S.-China trade dispute and lower growth in major applications, including smartphones, servers and PCs, is driving the global semiconductor market to its lowest growth since 2009,' explains Ben Lee, senior principal research analyst at Gartner. 'Semiconductor product managers should review production and investment plans to protect themselves from this weaker market.'
Gartner's prediction comes alongside an expectation of a 9.6 percent decline for the semiconductor market's overall revenue, for which the ongoing trade war between the US and China has been named as a contributory factor. At the same time, NAND flash components are confirmed as being in oversupply since early 2018, a state of play which will 'last for a few more quarters,' Lee explains.
Those looking to snap up a DRAM bargain, though, are advised that supply and demand are expected to balance by the third quarter of 2020 - at which point prices will likely rise once again. Full details are available in the Gartner semiconductor report for 2Q19, for paying clients only.
January 24 2020 | 12:00