According the Trendforce who also operates DRAMeXchange, contracts for DRAM have changed from quarterly to monthly. They also reported a sharp decline in the average selling price of DRAM. Last month we reported large price declines.
DRAMeXchange also reported that inventories are growing with large scale users. The biggest users of RAM are mobile phones. Phone sales are slowing.
DRAMeXchange also reiterated that Intel’s shortage of low end processors has been ongoing. They suggested 3Q19 before supplies catch up with demand. We reported CPU shortages earlier.
Flash memory is also tumbling as average sale prices fall though the floor. The slow sales of mobile devices has crushed demand for flash memory. We recently bought an Intel 660p SSD already heavily discounted only 6 months after its introduction.
Large reductions in prices aren’t going to be effective in driving sales. Until phone sales pick up prices are likely to be soft for quite some time.
China has been expanding semiconductors mostly for the domestic market. This has been the largest driver of oversupply. Almost everyone in China now has a mobile phone. Most use a prepaid service.
Lower prices will being telephones to new markets around the world but this takes time as infrastructure is needed to support the handsets.