Q3 saw orders for barebones servers dry up as inventories grew higher than expected, reports TrendForce.

It is expected that it will take one to two quarters to resolve the inventory over-stocking with a consequent effect on server DRAM ASPs – estimated at a 13-18% q-o-q decline in Q4.

Barebones server  production and whole server shipments for 3Q20 are expected to decline by 10% QoQ and 4.9% QoQ respectively.

Shipments are expected to resume in Q4 but at a lower level than in Q2.

The supply of server DRAM has been on a steady upswing as manufacturers saw it as a good market but with server orders on the slide, there is now an excess inventory of server DRAM.

Server manufacturers won’t buy because they expect prices to drop. The exception is Huawei which has been aggressively buying server DRAM to build inventory ahead of US controls on supply scheduled for mid-September.

Q3 may see a 15% drop in server DRAM prices followed by a 13-18% drop in Q4.