In a new report, Credit Suisse analysts John Pitzer takes a look at the growing concerns within the semiconductor equipment space that Samsung Electronics Co SSNLF has been flooding the market by “irrationally” adding dynamic random-access memory (DRAM) capacity during its conversion to 20 nm. According to the report, these fears are overblown, and the industry is approaching an upcoming period of undersupply.
Supply In Check
Analysts point to demand weakness, not oversupply, as the underlying cause of low prices so far in 2015. PC DRAM prices are down 20 percent year-to-date, and blended DRAM prices have fallen 13 percent in 2015.
Analysts are projecting DRAM supply growth for the first half of the year of 30 percent year-over-year (Y/Y) and demand growth of only 28 percent Y/Y. However, in the second half of 2015, Credit Suisse expects the balance to shift to 24 percent Y/Y demand growth and only 22 percent supply growth.
“The industry is heading into a period of undersupply, which should lead to more stable pricing starting in the month of June,” Pitzer explains.
Projections
Credit Suisse is projecting…
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