DRAM Prices to Slide Over 40% in 2019 Because Chip Makers Can't Forecast
martyb writes:
DRAM Prices to Slide Over 40% in 2019 Because Chip Makers Can't Forecast:
The laws of botched supply and demand forecasting are coming home to roost for the semiconductor industry in 2019 with DRAM average sales price set to fall 42.1 per cent.
The latest ladle of doom and gloom was poured onto the sector this morning by Gartner, days after IC Insights delivered its dark prognosis for chip makers.
"A weaker pricing environment for memory and some other chip types combined with the US-China trade dispute and lower growth in major applications, including smartphones, servers and PCs is driving the global semiconductor market to its lowest growth level since 2009," said Gartner analyst Ben Lee.
Smartphones sales are touted to fall 3.3 per cent to 2.2 billion units this year - the steepest recorded drop in their history. Traditional desktops and notebooks are forecast to drop to 187.2 million from 195.3 million last year. As for servers, the big cloud providers have put spending on pause.
The upshot of this is that global semiconductor revenues are expected to drop 9.6 per cent year-on-year to $475bn. This is down 3.4 per cent on Gartner's earlier forecast and likely could be revised again before the end of 2019 is upon us.
Given the chip makers are facing pricing pressure on memory, I would expect them to try and transition to more profitable markets such as processors. If enough of them have the same idea, are we on the verge of a drop in CPU prices, too?
Or will enough people see the drop in memory prices and use that as justification to upgrade their motherboard so as to be able to support more and/or faster memory - leading to an increase in mobo prices?
To complicate matters even further, Microsoft's Windows 7 is slated to go unsupported at year's end. Will companies install Windows 10 on existing systems or decide to do a hardware upgrade at the same time? How will the promise of a lower energy bill and thus lessened cost of doing business going to factor in?
What are YOU going to do?
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