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Capitalism: Planning and DRAM
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  • Second meeting about DRAM price fixing by Chinese guys, this time with Micron

    It is said that China’s Anti-Monopoly Bureau of Ministry of Commerce held a meeting with representatives from Micron Technology on 24 May 2018, to express concerns about the continuing price increase for PC DRAM products over the past quarters. The rising prices have made Chinese PC-OEMs struggling under component cost pressure. In addition, Micron had previously interfered with the supplying of upstream equipment to JHICC in contravention to the spirit of fair competition. Samsung, SK Hynix and Micron have gained a total market share of 96% in 1Q18, reflecting the current oligopoly in DRAM market compared with the markets of other semiconductor components.

    https://press.trendforce.com/press/20180525-3108.html#mlf2TbrUMo86MVkA.99

  • DRAM bit demand is expected to increase 22% in 2018, while growth in the bit supply will reach 21%.

  • The class-action lawsuit calls this a "classic antitrust, price fixing scheme."

    https://www.pcgamer.com/lawsuit-alleges-samsung-micron-and-hynix-colluded-to-drive-up-dram-prices/

  • Miners play important role in DRAM prices level

    "Orders for DRAMs fell noticeably in April," a representative at a Tokyo electronic parts trader said. "We previously received quite a lot of orders, even from companies with whom we did little business." Demand was particularly strong from virtual currency miners.

    At one parts shop in Tokyo's Akihabara electronics district, video cards fill the shelves. "Until February, we would receive 10 calls a day asking if we had such and such video cards in stock," said a clerk at Dospara, a computer equipment store in Akihabara. "These days, we're doing well if we get one such call a week."

    Unusually, DRAM prices began climbing in the spring of 2016, as supply failed to keep up with demand. Supplies grew still tighter, starting in the fall of 2017, as demand from individuals and companies in the cryptocurrency mining business rose. The miners were responding to rocketing prices for cryptocurrencies such as bitcoin.

    With a glut on the horizon, large-lot DRAM prices stopped rising in March for the first time in nine months. Buyers and sellers are beginning to agree on lower prices. Price-setting talks are under way for April-May shipments and beyond. They appear to be headed lower.

    The value of DRAM shipments are expected to peak in 2018, according to IHS Markit.

    https://asia.nikkei.com/Business/Business-Trends/Cryptocurrency-slowdown-throws-cold-water-on-DRAM-market

  • DRAM memory prices will rally through the third quarter. Datacenter servers will play a major driver of DRAM demand growth in 2018,.

  • DRAM market rose 5.4% sequentially to a record high of US$23.08 billion in the first quarter of 2018.

    Graphics DRAM prices rallied by 15% sequentially in the first quarter, given the relatively low base and the surge of demand from the cryptocurrency mining market.

    Prices of DRAM products for other applications increased by 3-6% on quarter.

    Prices of PC DRAMs are expected to continue their upward trend in the second quarter. PC DRAM contract prices came to US$34 on average in April, a 3% increase from the average quote for the first quarter of 2018.

    Samsung Electronics remained the market leader in the first quarter of 2018 with a 44.9% market share, followed by SK Hynix with a 27.9% share and Micron Technology with a 22.6% share.

    All 3 are criminal syndicates.

  • Not too good projections

    Transcend has seen DRAM contract prices reach high points, and expects the prices to likely become stable in the near future.

  • Not much improvements still

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  • Recent price chart

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  • Server DRAM chipmakers have raised their quotes by only 4% sequentially in the first quarter of 2018 as they intend to maintain sales growth with the prices favorable to their clients, said DRAMeXchange. Meanwhile, the top-3 server DRAM providers have moved to aggressively promote their 32GB RDIMM modules.

  • Bolstered by robust demand from datacenter and smartphone sectors, the global production value of the DRAM industry is estimated to surge over 30% to US$96 billion in 2018, and price quotes are expected to rise by 5-10% in the first half of the year, according to industry sources.

  • Output value for the global DRAM memory industry will increase more than 30% to US$96 billion in 2018, following a robust 76% surge.

    Mobile DRAM prices will increase around 3% on quarter, though smartphone sales have started to slow down. Meanwhile, PC DRAM prices are expected to rise about 5% sequentially while prices of server-use memory will see a 3-5% rally.

    Samsung saw its DRAM revenues grow 14.5% sequentially to US$10.1 billion in the fourth quarter of 2017, while second-ranked SK Hynix' DRAM revenues climbed 14.1% on quarter to US$6.3 billion. Samsung and SK Hynix took a combined 74.7% share of the global DRAM market in the fourth quarter.

    Monopolies.

  • Coupled with the climbing prices of mobile DRAM over the past year and a profit squeeze, major brands have adjusted their production plans and deferred restocking of materials since mid 4Q17. Some key components including mobile DRAM have excess inventory. In 1Q18, the traditional off-season, smartphone vendors are expected to decrease the demand, resulting in a mere 3% rise of the contract prices.

    https://www.dramexchange.com/WeeklyResearch/Post/2/4891.html

  • DRAM prices are expected to soar further in the first half of 2018, and overall market situations will remain steady throughout the year despite some makers having announced plans to ramp up their production capacities, according to Lee Pei-ing, president of Nanya Technology.

    He said although Samsung Electronics and SK Hynix will expand their DRAM production capacities in 2018, the market will stay relatively stable as a robust 20-25% growth in demand is well expected.

    Nanya also reported annual revenues of NT$54.933 billion for 2017, surging 31.9% on year. With average DRAM prices soaring 35% on year, the firm raked in gross profits of NT$24.677 billion, translating into a gross margin of 44.9% in 2017.

    The company recorded capital expense (capex) of NT$29.395 billion for 2017, and the figure for 2018 is estimated at NT$11.5 billion.

    Watch the growing number of parasites who do not want to invest in production, but are happy to have multi-million bonuses for nothing.

  • And some now fight to keep prices up

    Micron has filed a lawsuit with a federal court in the North California District accusing UMC and JHICC of copying its DRAM trade secrets, marking the first time for Micron to extend its legal battle across the Taiwan Straits in safeguarding its DRAM IPs. In the past, such legal cases would usually target Taiwan semiconductor players.

    Taiwan-based DRAM solutions provider Nanya Technology has also filed a lawsuit against two of its former employees, charging them with stealing the firm's technology information before joining a China DRAM maker.

    All this guys with their patents must be prosecuted and penalized such that no one else will try to impose them again.

  • Server DRAM contract prices for the fourth quarter of 2017 are forecast to rise 6-10% sequentially as demand continues to outpace supply (DRAMeXchange).

  • DRAM contract prices are forecast to rise about 10% on average sequentially in the fourth quarter of 2017. "Most PC-OEMs have concluded negotiating their contract prices with DRAM suppliers for this fourth quarter," said Avril Wu, research director of DRAMeXchange. "Contracts with first-tier DRAM suppliers show that the prices of PC DRAM modules have now risen above US$30 and maintained around US$30.5 on average, amounting to a 7% hike from the third quarter. This price increase is mainly attributed to the influence of the booming mobile DRAM market, which is in turn fueled by the limited product supply and the releases of flagship smartphones during the traditional busy season of this year's second half."

    "Depending on the capacity specifications, prices of mobile DRAM products could go up by 10% to 20% in the fourth quarter compared with the third. As for the server DRAM market, strong demand during the fourth quarter also will push up contract prices of memory modules by 6% to 10% from the previous three-month period."

  • Semiconductors market in general

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    Some final results for 2017 year

    • YoY growth in dollars - 74%
    • it is largest number since 1994
    • Average price of DRAM chip rise is 77% YoY

    So we actually witness cartel behavior.

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  • Average prices for mobile (LPDDR) DRAM products are expected to rise 10-15% sequentially in the fourth quarter of 2017, according to DRAMeXchange. Major suppliers have intentionally raised mobile DRAM prices to narrow the price gap between mobile DRAMs and other DRAM products

    More good news.

    DRAM memory will remain tight during most of 2018, as major suppliers have no plans to undertake large-scale capacity expansion projects.

    Notice the "efficiency" of invisible market hand.

  • Nothing good in sight

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    The three remaining major DRAM suppliers—Samsung, SK Hynix, and Micron—are each currently enjoying record profits from their memory sales. For example, Micron reported net income of $1.65 billion on $5.57 billion in sales—a 30% profit margin—in its fiscal 3Q17 (ending in May 2017). In contrast, the company lost $170 million in its fiscal 4Q16 (ending August 2016). A similar turnaround has occurred at SK Hynix. In 2Q17, SK Hynix had a net profit of $2.19 billion on sales of $5.94 billion—a 37% profit margin. In contrast, SK Hynix had a net profit of only $246 million on $3.39 billion in sales one year ago in 2Q16.

    http://www.icinsights.com/news/bulletins/The-Adversarial-Relationship-Of-The-DRAM-User-And-Producer-Continues/

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  • Global DRAM module sales totaled around US$6.9 billion in 2016, down about 12% from US$7.9 billion a year earlier, according to DRAMeXchange. Falling PC DRAM prices during the first half of the year and the continuing contraction of the DIY market were the main factors behind the revenue decrease.

    Kingston Technology continued to dominate the DRAM module market in 2016 with a 72.55% share, DRAMeXchange indicated.

    But this guys compensated it all.

  • Back to normal DRAM

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    PC DRAM Contract Price Rose by Over 10% Sequentially and Global DRAM Revenue Increase by 16.9% Sequentially in Second Quarter

    http://www.dramexchange.com/WeeklyResearch/Post/2/4752.html

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