The uncertainty has reached the manufacturers of PCs and OEMs, where the forecasts were already complicated for them and the power cut that has affected (coincidentally, as it could not be otherwise) Samsung has blown up the alarms in such a market complicated as that of RAM.
The research division of DRAMeXchange, TrendForce, has issued a new report in view of these facts and as we will see next, the general situation is of a very selective instability.
Memory buyers increase their purchases due to a possible shortage
Any small detail can blow up the RAM market today, the tension is constant and the supply problems of AMD and Intel are not helping to alleviate it. To such an extent there is uncertainty, that we have to talk about specific sectors instead of the general market.
Thus, TrendForce states that the forecast of the contract price for the 1Q20 in PC DRAM, mobile DRAM and DRAM «special», after reviewing the previous reports it is from "slightly downward" to "mostly stable or slightly upward".
The problem to understand this is that you have to be specific when it comes to talking about the sectors, since now the trends look each for one side depending on where we look. Obviously we are going to focus on the PC DRAM market, where the power outage that affected Samsung on December 31, 2019 has not seriously affected the supply side in the market.
Prices would rise at the cost of maintaining production
This has an opposite effect on demand, because due to limited growth in DRAM supply, buyers are gradually increasing the number of orders to store more inventory. This logically has a direct effect on the price, which has gone from being stable with the possibility of an increase in this quarter to a slight increase.
Although the number of shipments of laptops and PCs in this quarter is expected to be significantly lower than in other years, OEMs are under great pressure due to the fact that suppliers are limiting and restricting the production of RAM.
Therefore, they are being forced to increase orders in order to guarantee the shipment of their products and not suffer shortages. And the reports encrypt the reduction of RAM production in a 13% annual.
Samsung's power outage has brought the sector into a certain alarm, where the contracts that remain to be signed for this quarter could be of a greater amount for these, which would result in higher prices for users, but also guarantee a supply minimum for manufacturers.
This fact was planned for the second quarter, so the advance is bad news for users, now we need to know, if they fail to maintain the cost, how much the prices will rise and what will be the impact for everyone.