DRAMeXchange Research Director Avril Wu said: “Worldwide notebook demand was satisfactory in the fourth quarter of 2015, so PC OEMs shipped their products in advance. We expect notebook shipments to have a quarterly decline of 20% in the first quarter of 2016 on account of seasonality. Therefore, DRAM manufacturers are under pressure to lower contract prices in order to digest inventory.”

Additionally, the release of Intel’s Skylake platform, which supports DDR4, will result in a generational replacement of shipped memory products in the second half of this year. As DRAM suppliers are strategically lowering DDR4 prices to close the gap with DDR3 prices, TrendForce also anticipates price parity between DDR4 and DDR3 to take place in the first quarter at the earliest – a sign that DDR4 is on its way to becoming the market mainstream.

Wu noted that while DRAM manufacturers control prices and are likely to lower the prices of DDR4 to about the same level as DDR3 in the first quarter, pricing alone does not guarantee DDR4 will become the market mainstream specification overnight. Intel, which dominates the PC market, will also be instrumental in setting the pace of the generational transition in memory products.

Skylake, which was released in the second half of 2015, is currently the only Intel platform that supports DDR4. Moreover, Intel has over 95% of the notebook chipset market. Due to its monopolistic position, Intel will probably use Skylake in high-end notebooks initially. The new CPU will not begin to penetrate the mid-end segment until PC OEMs have cleared their current inventories.

“DDR3 will still account for a large share of the PC DRAM market during the first half of 2016,” said Wu. “DDR4’s market share will not expand rapidly until the end of the second quarter, when PC OEMs finished clearing their inventories.”

Samsung currently has the edge in DDR4 manufacturing. Its 20nm process for the next-generation memory products already reached maturity in 2015. The memory maker will continue with the technology migration and move DDR4 to the 18nm process in the second half of 2016, further improving its cost advantage of the competitors. Samsung’s current mainstream DDR4 specification is 8Gb.

SK Hynix is producing DDR4 on the 25nm process, but it still needs 21nm technology to manufacture 8Gb mono die. Samples are expected to ship after the Chinese New Year, and shipments are expected to increase after verification by clients.

Micron’s DDR4 is mostly manufactured on the 25nm/30nm technology. The memory maker’s 8Gb mono-die production on the 20nm process has run into problems. Besides low yield rate, Micron’s 20nm process has smaller capacity compared with counterparts used by the South Korean suppliers. For the time being, Micron will focus on higher margin products such as server DRAM. The production of 20nm PC DDR4 will reach a sizable volume until the second half of 2016.