Due to original manufacturers such as Samsung and Micron locking in the DDR5 and HBM markets, they will gradually stop supplying DDR4, which has led to a surge in DRAM stocking, especially with a significant increase in DDR4 prices.
Micron officially confirmed that DDR4 will be discontinued. Last week, Micron confirmed that it has sent a letter to customers notifying them that DDR4 will be discontinued (EOL, End of Life), and it is expected to gradually stop shipping in the next 2-3 quarters. Sumit Sadana, Executive Vice President and Chief Commercial Officer of Micron, stated that DDR4 will continue to be severely out of stock. Sadana stated that the notice of discontinuation of DDR4/LPDDR4 has been handed over to customers recently, mainly targeting the PC and data center fields. It is expected that in the next three quarters, DDR4 DRAM for consumer, PC, and data center use will undergo production reduction or decrease.
Future Micron DDR4/LPDDR4 DRAM is mainly provided to long-term cooperative customers in the automotive, industrial, and network industries. In February this year, it was reported that Micron, Samsung, and SK Hynix may stop producing DDR3 and DDR4 memory by the end of this year. In April, it was reported that Samsung notified PC manufacturers that DDR4 would be discontinued by the end of this year, with the final order date set for June. After the news of frequent price increases and factory shutdowns of storage products spread, it triggered a chain reaction in the DRAM market, leading to a surge in inventory. According to a report by Jibang Consulting, after the original factory announced EOL (termination of production), buyers rushed to replenish inventory, causing tight supply in the pellet spot market from April to May and a significant increase in prices. In June, the trend of storage product price increases has not stopped. According to the sales manager of a leading storage module manufacturer in Shenzhen, some DRAM products have recently experienced price increases, mainly DDR4 and DDR3. Some have risen by 100% during this period, while others have risen by 50% within a month. This month's increase is very significant. ”The supply of goods in the spot market is also scarce. According to the Science and Technology Innovation Board Daily, reporters inquired with multiple stores in Huaqiang North about a DDR4 3600MHz 16GB bare strip as the entry point, and the general feedback was "out of stock", indicating that this specification has experienced a shortage of stock on the channel end. Continuously inquiring about memory modules with multiple frequency and capacity specifications, the response received was almost always' out of stock '. Multiple Huaqiangbei merchants have provided feedback that DDR4 prices have recently increased significantly and are accompanied by a shortage of spot goods, while DDR5 prices are relatively stable. SSDs have already experienced a slight increase in prices and are currently stable.
The flash memory market also shows that DDR4 memory modules have the strongest upward trend, with some products experiencing a cumulative price increase of over 30% in just two weeks. The price of low capacity eMMC has not only doubled compared to the end of last year, but 16GB/32GB/64GB eMMC has basically the same price. With the decreasing supply of MLC NAND, it will accelerate the further upgrading of storage capacity for application terminals such as TV/security/POS machines in the future. The flash memory market is expected to continue the price increase trend of DDR4 and DDR5 servers in Q3, but the increase will narrow and may fall within the range of 10% -15%. The expected price of DDR5 server products in the third quarter is expected to increase slightly compared to the second quarter, while in the fourth quarter, with the ramp up of original DDR5 production capacity and the improvement of yield, the supply side will concentrate on releasing production capacity, and server DDR5 products will face price fluctuations.
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