[News] Controlled Market Demand Amid Earthquake Impact, Second Quarter DRAM Prices Expected to Rise by Over 20%

According to a report from TechNews, there has been a significant surge in demand in the memory market, driving prices steadily upward. This surge has led to the latest quotations from Korean memory manufacturers, with DDR5 prices set to increase by 13% in May.

Additionally, DDR4 prices are also expected to rise by 10%. As for DDR3, which currently serves as the main supply for Taiwanese memory manufacturers, there is also room for a 10% to 15% increase. Overall, contract prices for the second quarter are anticipated to rise by 20% to 25%.

Following in the wake of an earthquake that struck on April 3rd, TrendForce undertook an in-depth analysis of its effects on the DRAM industry, uncovering a sector that has shown remarkable resilience and faced minimal interruptions. Despite some damage and the necessity for inspections or disposal of wafers among suppliers, the facilities’ strong earthquake preparedness of the facilities has kept the overall impact to a minimum.

Leading DRAM producers, including Micron, Nanya, PSMC, and Winbond had all returned to full operational status by April 8th. In particular, Micron’s progression to cutting-edge processes—specifically the 1alpha and 1beta nm technologies—is anticipated to significantly alter the landscape of DRAM bit production. In contrast, other Taiwanese DRAM manufacturers are still working with 38 and 25nm processes, contributing less to total output. TrendForce estimates that the earthquake’s effect on DRAM production for the second quarter will be limited to a manageable 1%.

With the earthquake’s impact under control, for each manufacturer, Micron temporarily suspended quotations due to the earthquake’s impact on production. After completing the assessment of losses, it notified customers of a 25% increase in DRAM and SSD contract prices.

Additionally, due to Samsung’s production line conversion, the early cessation of DDR3 production has prompted many customers to turn to Nanya and Winbond for procurement orders, leading to the completion of product verification. As a result, Nanya and Winbond have informed customers in the second quarter that DDR3 prices are expected to increase by 10-15%.

Per TrendForce’s observations, as the three major memory manufacturers continue to transition their production capacity to highly demanded products such as HBM and DDR5, the production capacity of products like DDR4 and DDR3 has significantly decreased.

Overall, the supply-demand gap is expected to exceed 20-30% by the second half of 2024. This situation will lead to a substantial increase in DDR3 prices in the second half of the year, with price hikes reaching 50-100% as current prices remain below costs. This scenario will also be advantageous for the operational performance of various domestic memory manufacturers.

Read more

• DRAM Manufacturers Gradually Resume Production, Impact on Total Q2 DRAM Output Estimated to Be Less Than 1%, Says TrendForce
• [Insights] DRAM Spot Prices Expected to Decline Post-Manufacturer Quoting Resumption