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25 August 2017

Tight Supply for Memory Products Expected Through 2017

Regular purchases of memory components, especially DRAM modules, will continue to experience tight supply and market volatility throughout the rest of the year.

Despite memory manufacturers making moves to increase production capacity, independent industry research firms have predicted that prices will continue to rise during Q3 and Q4 of 2017 as demand outstrips supply.

DRAMeXchange has pointed towards the release of new devices from the likes of Apple and Samsung, combined with traditional peak sales seasons, is the primary factor behind this spike. However, there are other factors at play, namely the temporary suspension of Micron’s foundry at the beginning of the summer.

The foundry was only out of operation for a couple of weeks and resumed production in mid-July, but this downtime will have a knock-on effect,

“In total, Micron Technology lost around 50,000 pieces of DRAM wafers,” explains Avril Wu, a research director at DRAMeXchange. “As the DRAM market heats up again in the year’s second half…. this loss will exacerbate the undersupply situation.

“The chance of a worsening supply shortage in the DRAM marketing in September will depend on Micron’s ability to offset the wafer loss,” Wu added.

The memory sector has been a significant driving force behind the semiconductor sector’s strong growth figures this year. Because of an increase in demand and accompanying sales revenue, IC Insights has pinpointed memory – specifically DRAM modules – as being the fastest growing segment in 2017.

Such is the expected growth, IC insights, the semiconductor research firm, believes that the DRAM market will increase by 55% this year.

However, this upturn in demand has caught the major manufacturers wrong-footed.

“Suppliers,” Wu states, “do not appear to have plans to expand their production capacities on a significant scale between now and the end of the year.”

SK Hynix’s Chief Operating Officer commented on this issue in a webcast, stating: “Suppliers who can significantly increase capacity do not have enough clean room to do so and the pressing need to invest in 3D NAND will leave less financial room for investment.”

This situation will not only keep prices high but, as Mark Liu, a fellow analyst at DRAMeXchange, claims, supply will remain tight for the foreseeable future.

Naturally, this means problems sourcing stock through franchise channels.

As a result, the average selling prices for DRAM components have remained higher than normal during Q2 2017 and DRAMeXchange believes that this upward trend will only continue during Q3 and Q4.

With the cost of memory products increasing and set to remain high through the rest of the year, limited supply and lead times down as being 28-weeks in some cases, it would make sense to broaden your supply chain to secure the stock that you need during these adverse market conditions.

Cyclops Electronics, a leading independent stocking distributor of electronics components, can move quickly to locate and secure quantities of memory products for you.

With 177,232 lines held in stock and access to a further ten million lines through our global search database, we can help you overcome problems associated with lead times, obsolescence and allocation.


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