Robust add-on demand from US cloud service providers is pushing up long-term agreement price bands and driving server memory contract prices steadily higher. Conversely, Chinese providers are pivoting to lower-capacity products due to liquidity constraints. Suppliers are flexibly reallocating capacity toward higher-priced server products. Coupled with raised price ceilings on select long-term agreements and premiums on add-on orders, fourth-quarter contract prices are projected to rise by over 10% quarter-over-quarter.

Key Highlights

• Strong US Demand Drives Up Prices: US cloud giants are releasing additional follow-on demand, pulling long-term agreement (LTA) price ranges upward and prompting original suppliers to shift capacity from PC and mobile DRAM to higher-priced server memory.
• Chinese Players Shift to Low-Capacity Modules Amid Tight Funds: Chinese cloud service providers face liquidity bottlenecks that prevent them from placing add-on orders, shifting their purchasing focus from high-capacity to low-capacity modules. Consequently, a portion of reserved supply is reallocated back to North America or OEMs.
• Supply Side Flexibly Adjusts Process Nodes: Responding to market demand for lower-capacity modules, Korean suppliers are actively evaluating adjustments to their process lines to optimize capacity utilization, while continuing to stimulate demand for high-capacity modules.
• Q4 Contract Prices Projected to Rise Over 10% QoQ: With pricing for add-on orders and special deals established, alongside raised price ceilings on select LTAs, average contract prices in the fourth quarter are projected to post double-digit quarter-over-quarter growth.

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