PC DRAM spot price has recorded a sharp correction from early July, in line but a bit earlier than our expectation. We expect mobile DRAM to drive further margin improvement on the significant reduction in production cost that offset the gradual price decline.
Less-than-expected demand for high-end smartphones is taking a toll on NAND prices, although server SSD demand remains robust. We are seeing polarization in product prices: NAND for memory card/MCP is undergoing a price correction on high competition while product prices of high-end NAND for SSD, eMMC, etc, are stabilizing. Korea memory makers have guided for a mid-single digit. Going forward, we expect NAND price to gradually fall by 5-10% on a quarterly basis, reflecting lower productions cost due to geometry migration.
Micron’s Elpida acquisition
Micron completed its acquisition of Elpida on 31 July. With the addition of Elpida, we expect Micron’s DRAM capacity to be similar to Samsung’s, surpassing SK Hynix as the second-largest DRAM player. We see a high likelihood of Micron converting part of its DRAM capacity to NAND.
Samsung has also announced that it was going to begin mass production of 3D vertical NAND (V NAND). Thus we expect a gradual decline in memory prices rather than a steep drop on disciplined capex and diversified product mix.