Chinese DRAM Bit Demand Growth Will Be Higher

Global DRAM bit demand growth will be higher that of bit supply growth in the fourth quarter of 2014, easing pressure on the prices of DRAM chips in the quarter, according to Digitimes Research.

However, DRAM chip prices still may face a downward correction in the second half of the fourth quarter on concerns of global economic growth momentum and the impact of the off-peak season in the first quarter of 2015.

In addition to a lack of capacity ramps by major players, the world's top-three suppliers, Samsung Electronics, SK Hynix and Micron Technology, have also shifted part of their DRAM production capacity to the production of NAND flash chips, resulting in a three-year consecutive decline in 12-inch DRAM wafer output since 2011.

Samsung migrated to a 25nm process in the second quarter of 2013 and ramped up the ratio of 25nm process products significantly in 2014, driving up DRAM bit supply in the year.

Led by Samsung, global DRAM bit supply growth will reach 24.2% in 2014 compared to a growth of 23.1% a year earlier. But DRAM bit supply is set for slow growth in the future as current bit supply growth has been driven by upgrades of manufacturing processes rather than by the installation of new production, Digitimes Research commented.