Home > Smartphone demand keeps rising, stabilises memory chip prices

Smartphone demand keeps rising, stabilises memory chip prices

Editorial
article image The growing demand for smartphones means supplies of mobile DRAM are likely to remain tight in the short term.

SMARTPHONE demand is unlikely to go away anytime soon, with analysts expecting the upward momentum to persist into the second quarter of 2014, driven by a burgeoning market in China.

This is good news for engineers in the mobile space, but the growing demand for smartphones means supplies of mobile DRAM are likely to remain tight in the short term, according to DRAMeXchange, a research division of TrendForce.

This is coming at a critical period for the DRAM market, as the second quarter of 2014 will see the industry transitioning from LPDDR2 to LPDDR3.

This transition can cause discrepancies in manufacturers’ production capacity and adoption plans, resulting in price fluctuations and disruption to supply and demand of DRAM chips.

Additionally, an upcoming global smartphone peak season expected before the end of the third quarter of 2014 means DRAM prices are likely to see a slight rise during that period.

According to the analysts, contract prices for high density (16GB) LPDDR3 DRAM chips fell because there is low demand for LPDDR3 in high-end smartphones and tablets.

For the contract prices of the 8GB LPDDR2 and LPDDR3, the price difference in 2Q14 is expected to be roughly 13.3% (LPDDR2 US$7.5; LPDDR3 US$8.5). A potential price balance is expected to occur in 3Q14 following the increase in LPDDR3 production.

For MCP and eMCP memory products, the recent price drops have stabilised. Since the two Korean DRAM manufacturers in that space only make necessary pricing adjustments when facing major clients, the prices of mainstream densities such as MCP LPDDR2 4+4 and eMCP 4+8 were mostly unchanged.

With the arrival of the smartphone peak season, demand for NAND Flash is expected to rise, so prices for these products are expected to be steady.

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