Bank of America further raises its expectations for DRAM price increases, with Q3 contract prices expected to surge by 30-40%

Glonhui, July 28 | According to the latest channel survey by Bank of America Global Research in late July, the momentum of memory price increases is spreading from spot surges to quarterly contracts. More second-tier OEMs and module manufacturers have accepted a further 15-20% increase in July PC DRAM contract prices compared to June. DRAM prices in the third quarter are expected to double directly, with the average selling price potentially rising by 30-40%, significantly higher than the 13-18% forecast previously given by TrendForce. Bank of America believes that the sustainability of DRAM price increases depends on two major factors. First, it is estimated that Google’s capital expenditures will reach nearly $300 billion by 2027. If cloud service providers slow down the construction of data centers, the procurement pace will be extended. Second, the average DRAM price increase will decrease from 53% in Q2 to 21% in Q3, and drop further to 7% in Q4, with the growth rate declining quarter by quarter. In the context of strong fundamentals and high leverage volatility in South Korean stocks, contract prices exceeding expectations offer manufacturers profit flexibility, but are not immune to valuation pressures.