Samsung ended 2019 on a low note, when a power outage at its semiconductor manufacturing plant in Hwaseong, South Korea has caused tens of millions of dollars in damage. The good news for the consumer market is that the unfortunate event is unlikely to affect commodity DRAM prices in the first quarter of the year.
According to DRAMeXchange – a research division of TrendForce – the global supply of DRAM chips will not be affected in Q1 2020, mainly because numerous PC makers have already stocked up on DRAM chips in Q4 2019 in anticipation of higher US taxes on imported goods from China in 2020. They already have a healthy supply of DRAM chips for their upcoming products, and likewise, their demand won't be too high in the first quarter of the year.
Nevertheless, even if prices won't increase drastically because of low supply, DRAMeXchange now expects memory vendors to want and build up their inventories preemptively. Demand is likely to increase and TrendForce has adjusted its price forecast from “mostly holding steady” to “slightly trending upward.”
The situation could change for commodity DRAM vendors in Q2, but there's no danger of a price hike in Q1 at least. On the other hand, specialty DRAM vendors could take a hit in the first quarter. Unlike commodity DRAM contracts, specialty DRAM orders are placed quarterly and vendors usually don't have a backup stock. Therefore, DRAMeXchange predicts that specialty DRAMs could see a bump in prices starting this January.
There won't be a huge demand for 5G chipsets in Q1
Although 2020 will be the year of 5G, TrendForce estimates that demand for 5G chipsets will be relatively low in the first quarter of the year.
Samsung is the biggest mobile 5G chipset vendor and other market watchers expect the company to post an annual profit higher by nearly 40% in 2020, partly thanks to the predicted increase in sales of 5G solutions. However, this boost in revenue will happen gradually, and judging by TrendForce's estimates, Q1 will represent a relatively slow start for Samsung's 5G chip business this year.
