The convergence of DDR5 server DRAM price decline has been reported due to an issue with PMIC on Server DDR5 RDIMMs.

TrendForce has reported that the mass production of new server platforms, such as Intel Sapphire Rapids and AMD Genoa, is imminent. However, there is a PMIC compatibility issue for server DDR5 RDIMMs, which DRAM suppliers and PMIC vendors are working to address. This will have two effects: DRAM suppliers will temporarily procure more PMICs from Monolithic Power Systems (MPS), and supply will be affected in the short term as current DDR5 server DRAM production still uses older processes. This will lead to a convergence in the price decline of DDR5 server DRAM in 2Q23, estimated to be 13-18%.

PMIC issues and the production process relying on older processes are having a short-term impact on the supply of DDR5 server DRAM. SK hynix has gradually ramped up production and sales of 1α-nm, which has yet to be fully verified by consumers. Current production processes are still being dominated by Samsung and SK hynix's 1y-nm and Micron's 1z-nm. TrendForce estimates that DDR5 server DRAM 32 GB prices are expected to decrease to US$80-90 during April and May, slightly higher than the previous Q2 average estimate of US$75. DDR4 prices are projected to fall by 18-23% in 2Q23, whereas DDR5 prices are expected to drop by 13-18%.

The explosive popularity of ChatBOT has indirectly driven up demand for AI server shipments, leading to talks about HBM and boosting purchasing power for 128 GB server DDR5 RDIMM to accommodate ChatGPT 4.0 computing architecture. This has led to an increase in demand for high-capacity RDIMMs in early 2Q23, primarily from US CSPs. TrendForce reports that 128 GB RDIMMs require Through-silicon VIA (TSV) packaging, as the DDR5 mono die is mostly 16Gb. However, main suppliers cannot increase their TSV production capacity in the short term, leading to further price increases for SK hynix's high-capacity DDR5 modules this month.

Overall, compared to DDR4, DDR5 modules require PMIC components, which introduces the possibility of compatibility risks. Clients have also been delaying the mass production of new server platform models. As the production of new products begins to ramp up, the price gap between DDR4 and DDR5 will converge, which will be reflected in Q2 and Q3 of this year.