Graphics DRAM to lead DRAM price recovery

Author: EIS Release Date: Feb 24, 2020

Graphics DRAM is expected to lead the DRAM sector into a price uptick in Q1, says DRAMeXchange.

 

Graphics DRAM contract prices are projected to increase by over 5% QoQ, the highest among all memory products.

 

As GPU and game consoles become higher-spec, demand for high-capacity GDDR6 rises

 

In the graphics card market, the majority of NVIDIA’s shipments of graphics cards are based on the RTX platform, and most of these RTX cards use GDDR6 memory. 

 

AMD is also proactively destocking its older graphics cards with GDDR5 memory; the company has completely switched to GDDR6 for its latest NAVI series of GPUs. 

 

In the game console market, Sony and Microsoft are still relying on GDDR5 for PS4 and Xbox One, respectively. However, their next-generation consoles to be released in 2H20 (i.e., Sony’s PS5 and Microsoft’s Xbox Series X) will be equipped with GDDR6 memory. 

 

The memory capacity of these upcoming consoles could be raised up to 16GB, which is twice that of current mainstream graphics cards. 

 

Given these developments, demand is expected to exceed supply for graphics DRAM in 2020.

 

On the supply front, compared with other types of memory, Graphics DRAM has the highest production cost per chip. 

 

Hence, Graphics DRAM products were the first group of memory products to incur an operating loss for suppliers during the past few quarters when DRAM prices as a whole went on a steep dive. 

 

Therefore, the three dominant suppliers adjusted their product mixes and transferred some of their wafer capacity that was originally for Graphics DRAM to products with higher margins to maintain profitability. 

 

Currently, Graphics DRAM accounts for less than 6% of the industry’s overall output. 

 

Owing to a constrained supply and the demand drivers, quotes are starting to stabilize and a rebound in contract prices is expected in 2020.