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Comment by onlyrealcuzzo | Hacker News Reader

What caused a price crash of both DRAM and NAND??

There is more background in other articles on Samsung's prediction:

>Samsung said it received fewer orders from cloud service providers, such as Amazon, as well as from handset makers, such as Apple, which has recently seen a slowdown of its own smartphone sales. This low demand in the cloud services and smartphone markets for both DRAM and NAND flash chips have pushed the prices of these chips down.

>According to Bloomberg, data centers are still going through their unused memory chips right now, Apple has cut its forecasts for iPhone sales and China’s economy, which is Samsung’s largest market for embedded components, has also slowed down this year.

>According to IHS Markit, a research firm, the market for DRAM is set to reach $77 billion in sales this year, which is a drop of 22% compared to last year. In this last quarter, DRAM prices fell over 30% (38% for server DRAM), which is the “sharpest decline since 2011," according to TrendForce.

https://www.tomshardware.com/news/samsung-q1-2019-earnings-p...

I have never trusted this Datacentre narratives because it doesn't make sense. On one hand you have you Intel saying they can not supply enough CPU because of high demands, on the other hand Component manufacture are blaming the low Supply in the channel for their lower than expected sales. All while AMD is taking server and desktop side market shares, no matter how small the percentage that is.

I think it basically boils down to few things.

1. Surprise Drop of Smartphone Unit Sold, we saw the first YoY decline in total Smartphone Unit shipment. ( Unit, not revenue ). Out of a 1.3B Smartphone market, even a 5% drop is a huge volume to fill.

2. Better than expected yield of 3D NAND. Which means you actually have an increase in output. And it just happen all three, Samsung, SK Hynix and Micron were able to yield better at the same time. To be fair they have been very conservatives with their estimate.

3. More Chinese DRAM and NAND are being used in the Domestic market. Which is unofficially required for selling phones in China.

All these along with the improved efficiency of DRAM and NAND Fabs for trying to fill orders during 2017 and 2018 without building new Fabs. Meant the DRAM / NAND are hit with a perfect storm.

I heard from grapevine that cloud vendors accumulated DRAM stockpile. That's why CPU demand is high but DRAM demand is low.

These are not at odds. You want your machines to be uniform. If Intel calls you saying they'll deliver only two out of the ten thousand Xeon 1234-5 units you ordered this quarter, you call Samsung and cancel 80% of the order there.

All the major SSD NAND flash producers finally hit volume production of 3D TLC NAND at roughly the same time last year which sent prices falling precipitously.

I'm not aware of a similar pattern in DRAM, which if anything has been suspiciously high for a while to the point that many assume price fixing was to blame as has happened in the past.

I think people attributed DRAM demand to cloud computing hyperscaling. Demand was higher than actual demand, because all of Amazon, Microsoft, Google purchased DRAM assuming their market share would increase. Predicted market share probably totaled well over 100%.

At least part of the DRAM issue is related to Intel's CPU supply issues being a drag on new PC sales.[1] But overall for DRAM and NAND, it's probably a case of market saturation in many sectors.

[1] As well as AMD has been doing with Ryzen, most large computer purchasers are still Intel buyers and are slow to change.

Oversupply.

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