Since the third quarter of 2020, according to TrendForce, the share of manufacturing capacity dedicated to server DRAM has dropped to about 30% of all manufacturing capacity that can manufacture DRAM chips.
The downsizing came as vendors sought to increase production of DRAM chips in other categories in higher demand. In addition, this was done to adjust the average selling price across the different DRAM segments. With strong consumer electronics demand showing no signs of slowing in the current quarter, suppliers have maintained the same capacity allocation as last year. However, the second quarter traditionally accounts for an increase in server shipments. With this in mind, demand for server DRAM is also expected to rise in the second quarter of this year, which in turn will prompt its suppliers to raise prices. TrendForce predicts a 10-15% increase in contract prices for server DRAM in the second quarter compared to the first quarter.
Over the course of the year, contract prices for server DRAM are likely to rise by more than 40%.
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