Chip costs may rise another 63% this quarter, as effects feed through to PC pricing
The continuing AI memory crunch saw DRAM prices effectively double in calendar Q1, and the bad news is they are likely to rise again by more than 50 percent in the current quarter, if TrendForce forecasters are on the money.
The Taiwan-based market watcher says contract prices for conventional DRAM went up by up to 98 percent during Q1. This was good for the memory chipmakers - which have seen their industry revenue spike 81 percent to $97 billion in the same period - but not so good for buyers.
The situation is not set to improve anytime soon, TrendForce says, as inventory levels held by DRAM suppliers remain extremely low, and any incremental supply is prioritized for high-capacity RDIMMs for AI servers.
This continues to limit product availability for PC and smartphone vendors, with the result that bit shipment growth for conventional DRAM is expected to remain constrained. TrendForce expects contract prices for these everyday memory components to rise by another 58 to 63 percent this quarter.
Hyperscale customers have shown a greater willingness to accept price increases, the market research firm claims, which has forced other customers to follow suit to secure supply allocations.
The end customer has been the loser in all of this, with the average price of laptop and desktop PCs up by double-digit percentages in Europe, as The Register reported this week.
Pricing pressure is only likely to ease if there is an increase in the available manufacturing capacity of everyday memory parts, or there is a slackening off in demand for the higher-margin high-bandwidth memory chips used in AI servers.
However, TrendForce notes that the top three suppliers – Samsung, SK hynix and Micron - are continuing to prioritize production and shipments of HBM.
SK hynix Chairman Chey Tae-won told reporters in Taipei this week that it aims to double its silicon wafer output capacity – but only gradually over the next five years. As such, the shortage could persist until 2030, he warned – but other analysts have said they expect it to last until the end of next year.
Micron said last month it has started DRAM manufacturing at its Manassas, Virginia, fabrication plant and expects initial wafer output at its first Idaho fab in “mid-calendar year 2027.” Meaningful new capacity is projected to come fully online in 2027 and 2028, it said.
One piece of good news is that a threatened strike by workers at Samsung Electronics was called off at the end of May after the company agreed to create a fund that will share profits with workers. Industrial action raised the prospect of disruption to memory production, which could have worsened the global shortage.
Beyond the big three, Taiwan-based suppliers Nanya, Winbond, and PSMC continue to focus on mature-node DRAM products to fill market gaps left by tier one suppliers as they shift to advanced process technologies, TrendForce says. PSMC in particular is expected to aggressively expand supply capacity. ®