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"Trend for PC DRAM Contract price decline to be stable from end of February"

February 02, 2015 12:05|February 02, 2015 12:15
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PC DRAM contract price in the second half of January decline to US$29.5, meeting our decline estimates of around 6% h-h. We forecast that 1Q15 PC DRAM contract price will likely continue to trend downwards on low seasonality, however, it is likely to show a stable status from end of February. While mobile DRAM price is expected to remain strong. 

PC DRAM contract prices decline 5.6% in the second half of January 

The contract price for 4GB DDR3 PC DRAM in the second half of January stands at US$29.50/module (down 5.6% h-h). 4Gb DDR3 DRAM contract price also drops to US$3.38/unit (down 5.85% h-h) over the same time period. 

Because of 1Q15 low seasonality and weak demand from PC OEMs—PC DRAM contract price has trended downward, which lead PC OEMs to wait for additional price drop—PC DRAM contract prices is expected to continue to decline for the time being. 

However, we expect that PC DRAM price is unlikely to drop sharply (to drop by 2-3% m-m) from February. l Server DRAM contract price slightly drop by 0.7%~1.0% on January

*Server DRAM contract prices for DDR3 RDIMM 8GB and 16GB on January

Server DRAM contract prices for DDR3 RDIMM 8GB and 16GB on January stand at US$75.5/module (down 1.31% m-m) and US$134.0/module (down 0.74% m-m), respectively. 

While DDR4 server DRAM contract prices for RDIMM 8GB and 16GB on January record US$95.0/module and US$175.0/module, respectively. Of note, DDR4 server DRAM prices are higher 25-30% than those for DDR3 server DRAM. 

We believe that the mainstay of DRAM product in server will likely shift from DDR3 to DDR4 going forward, which should lead DRAM products to diversify. We forecast that DDR4 portion out of total server DRAM will likely expand to 40% in 2015 (vs 1% in 2014). 

Mobile DRAM demand remain strong thanks to the launch of LPDDR4 
1Q15 mobile DRAM contract price is expected to remain solid. In detail, in a point of demand side, given that Samsung Electronics’ slated new flagship smartphone ‘Galaxy S6’ is expected to equip with 3GB LPDDR4 DRAM and ‘Mi Note Pro’ by Xiaomi will sport 4GB DRAM, a factor which lead mobile DRAM demand to spur. 

In addition, in a point of supply side, because of tech migration related difficulty, we believe that mobile DRAM supply will likely limit in 1Q15 and the launch of LPDDR4 products should lead DRAM product to diversify going forward.
*Source:Woori Investment & Securities Co.