Demand growth outpaces supply growth.
DRAMeXchange analysts forecast a rise in contract prices for DRAM in the first quarter of 2020. According to them, this segment is more sensitive to changes in demand than others, so price fluctuations are also significant. In this case, contract prices are expected to increase by 5% compared to the previous quarter, which will be the highest figure among all types of DRAM.
Regarding the general market situation, the main trend is the rapid transition from GDDR5 to GDDR6. Both Nvidia and AMD are cutting back on GPUs for GDDR5 graphics cards. Sony PS4 and Microsoft Xbox One game consoles use GDDR5 memory, but the next-generation models, which will be released in the second half of the year, will be equipped with GDDR6 memory, and its volume can be increased up to 16 GB. Given these factors, analysts expect that in 2020 demand will exceed the supply of graphic DRAM.
Since graphic memory has the highest cost among DRAM types, its release was reduced primarily when DRAM prices generally fell sharply. Currently, DRAM graphic memory accounts for less than 6% of total industry production. The largest supplier of this memory is Samsung. It is followed by SK Hynix and Micron.