PC OEMs are holding 10 weeks or more of DRAM inventory thanks to supply services’ reluctance to stock memory chips, according to market intelligence firm TrendForce.
trend strength noted this is all attributable to the pandemic: supply chain issues have hampered the ability to produce and sell consumer electronics. Since the companies couldn’t manufacture the devices, they didn’t stock memory chips to build them into.
As a result, most DRAM factories suffered an average quarter-over-quarter decline of 5.8% in Q4 21 shipments to around $25 billion, leading them to lower prices.
The first quarter of 2022 doesn’t look so great for the market either, as those with supply will focus on shedding extra inventory, causing an even bigger drop in DRAM production.
A few vendors bucked the trend – such as SK Hynix, which rose 2.8% quarter-on-quarter to hold the second-highest market share among DRAM manufacturers at nearly 30%, just behind Samsung, which fell slightly from 44 to 42.3%. quarter on quarter. Trendforce said the company will most likely experience lower shipments in the next quarter, which will serve as a type of market correction on SK Hynix’s success.
SK Hynix’s increased market share did not save it from a slump in Q4 21 performance. The South Korean supplier’s operating profit margins were slashed by 45%. Comparatively, Samsung fell 50% and Micron 41%. This is also expected to continue in Q1 22.
“Manufacturers can only increase the proportion of advanced processes and optimize their product portfolio to reduce the impact of price pressure,” writes Trendforce.
Similarly, Samsung cited the global supply chain as the reason it failed to meet its own guidelines for DRAM shipments in the last three months of 2021. Samsung alluded to profit protection by to volumes by saying he would not engage in aggressive selling tactics during his investors. call. ®