Memory prices may fall for the next quarter

A report from DigiTimes suggests that memory prices will fall 10 percent in the next quarter - Q4 2020.

Citing unnamed sources, the Taiwanese based news outlet reckons that prices will drop for memory in the coming months with that fall set to continue into the first quarter of 2021. The reasoning? An oversupply of memory and a lack of people upgrading right now. Previously, both Micron and SK Hynix have issued warnings of weak demand so this would tie into that. 

In part, the weak demand may be due to over-enthusiasm at the start of the pandemic. For instance, earlier in the week, Barrons reported that at the start of the pandemic many enterprise buyers stockpiled memory due to fears that there would be a shortage later on. That didn't happen and now there's an oversupply of memory, which includes both DRAM and NAND-based products.

It's a stark contrast to predictions at the end of 2019 where it was expected that DRAM prices would rise by potentially as much as 40 percent. Of course, back then, the COVID-19 pandemic wasn't an issue for most of the world and all things business-related were very different. 

Of course, pandemic or no pandemic, memory prices do tend to fluctuate throughout any year. They're rarely the most settled of products, price wise, so this is hardly surprising news given the unsettled nature of the world right now. When it comes to memory price predictions, analysts love to adjust their thinking frequently, albeit for understandable reasons this time round. 

There's also the other matter that potentially consumer buyers may be holding back for now while we await new technology such as the many things expected in September like new GPUs from Nvidia, AMD's Zen 3 and more. Right now, memory prices aren't necessarily very low for the consumer, but it seems reasonably likely that we could see some price drops quite soon if things don't change fast. However, it's likely that the window could be quite narrow before we see memory manufacturers adjust their production lines accordingly, stopping the risk of oversupply over time.