TrendForce releases the latest memory spot prices, with DRAM showing limited price increases due to sluggish trading momentum. On the other hand, NAND Flash is affected by inventory dynamics, leading to a gradual elimination of the premium for 512Gb. Details are as follows:

DRAM Spot Market:

In the spot market, the price decline caused by used chips extracted from decommissioned modules has shown signs of easing. The overall price trend is now relatively stable. With the winter holidays in North America and Europe, spot trading activities have slowed down. However, due to the market consensus that contract prices will rise in 1Q24, some buyers are stocking up, resulting in relatively insignificant increases in spot prices. The average spot price of mainstream DRAM chips (i.e., DDR4 1Gx8 2666MT/s) rose by 0.34% from US$1.747 last week to US$1.753 this week.

NAND Flash Spot Market:

Several suppliers, having witnessed the price hike of wafers that lasted for a few consecutive months, are starting to release their stocks since this week. The previous destitution in product availability has thus been slight remedied. 512Gb is currently sitting on about US$3.2, and is approaching to its contract price under a slow dissipation in premium, with the focus of subsequent observations being whether purchase dynamics would further deteriorate. 512Gb TLC wafer spots have risen by 1.72% this week, arriving at US$3.128.

In the latest financial report and guidance released on the 20th, U.S. memory chip giant Micron outperformed analysts’ expectations for both the last quarter and the current quarter. CEO Sanjay Mehrotra believes that product pricing will rebound next year, with the upward trend continuing until 2025, as Micron aims to return to a path of operational innovation and reach new record levels by 2025, according to The Economic Daily.

Mehrotra anticipates a price recovery in memory prices next year, and rise further in 2025. He reiterated in a statement that 2024 will be a year of recovery for the memory industry setting the stage for record results in 2025.

Micron expects the supply of PC, mobile devices, and other chips to approach normal levels in the first half of next year. Despite two consecutive years of declining PC shipments, Micron forecasts low to mid-single-digit percentage growth in 2024, with signs of a recovery in smartphone demand.

TrendForce also anticipates that the upward momentum in DRAM products is expected to continue until 2025.

The reason behind this is the continuous benefit to the DRAM market from the increasing penetration of premium products such as HBM, DDR5 and LPDDR5. This is expected to have a positive impact on the overall memory prices.

Simultaneously, TrendForce believes that 2025 will witness the emergence of more edge AI applications, such as AI on smartphones or PCs. This is expected to result in an increase in DRAM capacity, becoming the driving force for the next wave of growth in DRAM demand.

(Image: Micron)

Amid a gradual recovery in the memory market, South Korean memory giants Samsung and SK Hynix are reportedly set to expand their equipment investments significantly next year.

Samsung aims for a 25% increase in investment, while SK Hynix plans to more than double its investment compared to this year, concurrently increasing production capacity, sparking industry attention.

According to South Korean media outlet ETNEWS, both Samsung and SK Hynix are planning to boost semiconductor equipment investments in 2024. Samsung’s investment is estimated at around KRW 27 trillion (approximately USD 20.78 billion), representing a 25% growth, while SK Hynix plans an investment of around KRW 5.3 trillion (approximately USD 4.07 billion), signaling a 100% increase from this year’s investment.

As ETNEWS’ report revealed, in addition to increasing equipment investment, Samsung and SK Hynix have also raised their production capacity targets for 2024. Samsung plans to expand both DRAM and NAND Flash production by approximately 24%, while SK Hynix aims to elevate DRAM output to levels seen by the end of 2022.

Looking at market share, according to TrendForce’s released data, in terms of third-quarter revenue figures, Samsung holds approximately 38.9% market share in DRAM, while SK Hynix stands at 34.3%.

In the NAND segment, Samsung holds approximately 31.4% market share, while SK Hynix stands at 20.2%.

Market concerns arise as the memory industry, which has recently seen relief from the long-standing oversupply pressure due to major manufacturers reducing production, faces the possibility of disruption once again. Amid the rebound in prices, the significant investments planned by the two major South Korean companies are causing apprehension that the memory industry may face new challenges.

Memory industry sources believe that despite Samsung and SK Hynix’s plans to increase semiconductor equipment investment and boost production capacity in 2024, the tool-in still take time. Improving production capacity utilization is not an instantaneous process.

Furthermore, there is a general consensus in the industry that several AI-related applications in the future will require large-capacity memory support. For instance, the expected 3% growth in global smartphone shipments (based on TrendForce’s report) next year is anticipated to contribute to the expansion of demand in the high-value memory market.

TrendForce also pointed out that recent news about memory manufacturers expanding investment and increasing production capacity is primarily driven by the growing demand in the HBM market, rather than capacity expansion for all products.

Read more

• NAND Flash Industry Revenue Grows 2.9% in 3Q23, Expected to Surge Over 20% in Q4, Says TrendForce
• Contract Prices Bottom Out in Q3, Reigniting Buyer Momentum and Boosting DRAM Revenue by Nearly 20%, Says TrendForce

(Photo credit: Samsung)

Affected by the year-end and relatively sluggish demand, spot prices of DRAM and NAND Flash have shown a hovering trend this week. Details are as follows:

DRAM Spot Market:

With the year ending, some DRAM suppliers have released more their existing stocks into the spot market in order to lower their inventories further. As a result, spot prices of DRAM chips on the whole have fallen slightly. Currently, spot prices are still mostly hovering because buyers have yet to increase procurement quantities despite the rally of contract prices. The average spot price of the mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 0.11% from US$1.745 last week to US$1.747 this week.

NAND Flash Spot Market:

The spot market, bearing resemblances to that of DRAM, lacks drivers for a continuous increase in prices due to buyers’ stagnated purchase sentiment at the end of the year. Fortunately, the market is currently at a price correction phase as provision remains exceedingly restricted among suppliers due to their unchanged reluctance in sales. 512Gb TLC wafer spots have risen by 1.62% this week, arriving at US$3.075.

According to TechNews’ report, in the midst of production cutbacks by Samsung, SK Hynix, and Micron, NAND Flash wafer prices are surging.

As the traditional peak season for end-user stockpiling comes to an end, memory module manufacturers wish to position themselves favorably during a dip in demand. However, the reduced supply resulting from production cutbacks paradoxically elevates the demand for NAND Flash, intensifying the momentum of price rebounds. Memory module manufacturers are left with no choice but to accept the price increases imposed by memory manufacturers.

Fueled by the expectation that memory manufacturers will continue to raise prices, memory module manufacturers continue aggressive purchasing, contributing to an upward price trend in December.

Major memory manufacturers Samsung, SK Hynix, and Micron had previously announced significant production reduction plans. Samsung initiated a decrease in NAND Flash production from the second quarter and further expanded the reduction to 50% of total capacity in September, focusing mainly on products with less than 128 layers. This move instilled confidence in price hikes among industry peers.

Due to the unexpectedly substantial reduction in production by major memory manufacturers, coupled with generally low inventory levels on the client side, NAND Flash prices continue to rise.

In the latter half of this year, the demand for Mobile DRAM and NAND Flash (eMMC, UFS) has not only been driven by the traditional peak season but also stimulated by the production expansion goals of other Chinese smartphone brands, including the Huawei Mate 60 series. This sudden influx of demand is contributing to the price hikes in fourth-quarter contracts.

The most significant price surge in this wave is undoubtedly in NAND Flash wafer prices. According to the latest research from TrendForce, the current industry situation indicates that module manufacturers’ inventories have rapidly depleted due to increased orders from customers. This has prompted module manufacturers to turn to memory manufacturers, requesting expanded supply.

However, with memory manufacturers persisting in their production reduction strategies, the imbalance between supply and demand has led to a robust rebound in NAND Flash wafer prices in the fourth quarter. According to TrendForce’s data, the month of November alone witnessed a price increase of over 25% for NAND Flash wafers.

Industry sources reveal that in the current scenario of limited supply and significantly increased demand, module manufacturers have no choice but to accept the forceful price hikes imposed by memory manufacturers. The industry, anticipating that memory manufacturers will continue to raise prices, has resulted in a situation where “Everyone just keeps scrambling for inventory.”

Based on the current market conditions, TrendForce believes that in December, with tight supply, NAND Flash prices will continue to rise. However, whether prices will continue to surge significantly in the first quarter next year depends on the production reduction strategies of NAND manufacturers and the state of demand.

It is reported that there are industry rumors suggesting that some memory manufacturers are considering increasing production capacity due to the strong downstream demand. If memory manufacturers decide to increase its capacity earlier, coupled with unclear improvements in demand, the extent of price increases may be noticeably limited.

(Photo credit: Samsung)