According to TrendForce’s latest memory spot price trend report, regarding DRAM, the spot market is still seeing an across-the-board price decline for both DDR4 and DDR5, while DDR4 products are noticeably suffering larger drops. As for NAND flash, the declination of spot prices remains unchanged. Details are as follows:

DRAM Spot Price:

Continuing from the previous week, the spot market is still seeing an across-the-board price decline for both DDR4 and DDR5 products. DDR4 products are noticeably suffering larger drops. Module houses’ high inventory levels, combined with demand shifting from DDR4 to DDR5, suggest that prices of DDR4 products still have substantial room for further drops. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has fallen by 0.16% from US$ 1.843 last week to US$ 1.840 this week.

NAND Flash Spot Price:

The declination of spot prices remains unchanged. Spot traders, after getting rid partial low-priced inventory in 1H24, have been absorbing increasing prices for subsequent stock ups, which raised their average cost of inventory, and the drastic depletion of spot prices would only become even more detrimental towards their losses in 2H24. TrendForce projects such tendency to persist for the short term.

According to TrendForce’s latest memory spot price trend report, regarding DRAM, the decline in DDR5’s spot prices has been relatively modest, while DDR4 and DDR3 products experience more significant pressure. As for NAND flash, spot prices could continue to fall also due to the possible expansions of wafer provision from suppliers at the end of the year. Details are as follows:

DRAM Spot Price:

Regarding DDR5 products, the decline in their spot prices has been relatively modest, but the trading momentum remains sluggish. As for DDR4 and DDR3 products, their spot prices continue to drop due to experiencing more significant pressure. Looking at DDR4’s future spot price trend, demand has been rapidly shifting towards platforms that primarily adopt DDR5. Consequently, clearing existing DDR4 inventories in the spot market is challenging, and the downward price trend is expected to persist for a considerable period. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has fallen by 2.33% from US$1.887 last week to US$1.843 this week.

NAND Flash Spot Price:

Transactions have been sluggish after the conclusion to the peak period of purchase momentum, and market rumors of production cuts among suppliers have proven to be ineffective towards halting the deterioration of spot prices that could continue to fall also due to the possible expansions of wafer provision from suppliers at the end of the year. Spot prices of 512Gb TLC wafers have dropped by 2.66% this week, arriving at US$2.380.

As South Korean memory giants Samsung and SK hynix announced their third quarter financial reports, posting a 112% and 94% year-over-year revenue growth, respectively, the threat from increasing output of Chinese rivals such as CXMT, which drives prices down, has reportedly prompted them to significantly cut back on legacy memory chip production, according to the report by the Korea Economic Daily.

According to the report, China’s ChangXin Memory Technologies (CXMT) has been ramping up the production of older chips like DDR4 and LPDDR4X, resulting in severe price pressure in legacy products.

CXMT has expanded its monthly DRAM production capacity from 40,000 wafer sheets in 2020 to 160,000 sheets. This capacity is expected to reach 200,000 sheets by year-end and 300,000 by the close of 2025, the report said.

SK hynix to Reduce DDR4 Production to 20% of Total DRAM Output

Industry sources cited by the report noted that in a recent investor relations session with Goldman Sachs, SK hynix suggested that it plans to reduce DDR4 DRAM production to 20% of its total DRAM output by the end of the year, down from 30% in September and 40% in June.

On the other hand, according to the report, in an earnings call with analysts on last week, Kim Jae-joon, executive vice president of Samsung’s device solutions (DS) division, confirmed plans to reduce production of legacy DRAM and NAND flash chips, aligning with industry expectations that chipmakers are scaling back on conventional memory output.

HBM and eSSD Emerge as the New Focus

Instead, both memory giants highlighted in their earnings call that they would shift their focus to highly profitable premium products like HBM and enterprise solid-drivers (eSSDs).

These adjustments by Samsung and SK hynix align with strong server DRAM demand driven by major tech firms like Google and China’s Baidu investing in server infrastructure, while PC DRAM sales have remained stagnant, according to the Korea Economic Daily.

According to SK hynix, as generative AI is developing into a multi-modal1 form and global big tech companies continue to invest to develop artificial general intelligence (AGI), the demand of memory for AI servers such as HBM and eSSD has grown noticeably this year. SK hynix predicts that this trend will continue next year.

According to the Korea Economic Daily, anticipating a prolonged global over supply, SK is accelerating the upgrade of its older DRAM lines in Wuxi, China, to advanced lines for producing fourth-generation 10-nanometer 1a DRAM.

While maintaining steady NAND flash production, in the meantime, SK is increasing the operation rate at its eSSD facility in Dalian, China, to nearly full capacity, according to sources cited by the report.

On the other hand, Samsung noted that in 2025, the company plans to expand the sales of HBM3E and the portion of high-end products such as DDR5 modules with 128GB density or higher for servers and LPDDR5X for mobile, PC, servers, and so on.

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• [News] SK hynix and Samsung Reportedly Step up Focus on HBM4 and CXL amid Rising Chinese Competition

(Photo credit: SK hynix)

Amid concerns on its HBM progress and yield issues on advanced nodes, Samsung has released its full Q3 2024 financial results, with the quarterly revenue reaching KRW 79.1 trillion won (approximately $57.35 billion), hitting an all-time high. However, its semiconductor business remains lackluster, as the DS Division recorded a quarterly operating profit of 3.86 trillion won, marking a 40% decline from the previous quarter.

According to a report by CNBC, while demand for memory chips driven by AI and traditional server products provided some support, Samsung noted that “inventory adjustments negatively impacted mobile demand.” The company also highlighted challenges with “the increasing supply of legacy products in China.”

Samsung continues to face challenges in its most advanced wafer foundry processes. According to TrendForce, the company has yet to solidify its reputation as a reliable partner for cutting-edge nodes, which may hinder its ability to secure orders from top IC design houses and potentially delay its efforts to expand capacity.

Losses in Foundry and System Chip Lead to Profit Drop in DS Division, while Memory Remains Strong

On October 31, Samsung Electronics reported Q3 consolidated revenue of KRW 79.1 trillion, an increase of 7% from the previous quarter, on the back of the launch effects of new smartphone models and increased sales of high-end memory products. According to Business Korea, the Q3 revenue exceeded its previous revenue record of KRW 77.78 trillion, set in Q1 2022.

However, operating profit declined to KRW 9.18 trillion, largely due to one-off costs, including the provision of incentives in the Device Solutions (DS) Division, according to its press release.

In terms of the DS Division, which encompasses the memory and foundry business, it posted KRW 29.27 trillion in consolidated revenue and KRW 3.86 trillion in operating profit in the third quarter, marking almost a 50% drop from the prior quarter’s KRW 6.45 trillion.

According the Korean Economic Daily, Samsung attributed the weaker profit to higher-than-anticipated one-time expenses totaling around KRW 1.5 trillion, which included employee performance bonuses, as well as escalating losses in its foundry and system chip divisions, each estimated at over KRW 1.5 trillion.

On the other hand, the company noted that its memory chip business performed better than anticipated, with an estimated profit of around KRW 7 trillion for the quarter, the Korean Economic Daily notes.

Memory business sales reached KRW 22.27 trillion, more than doubling from the previous year, driven by increased demand for high-end chips used in AI devices and servers, such as HBM, DDR5, and server SSDs, according to Samsung.

Key Takeaways for 2025 Outlook

In the fourth quarter, Samsung notes that while memory demand for mobile and PC may encounter softness, growth in AI will keep demand at robust levels.

As for the Foundry Business, Samsung claims that the unit successfully met its order targets — particularly in sub-5nm technologies — and released the 2nm GAA process design kit (PDK), enabling customers to proceed with their product designs. It notes that the Foundry Business will strive to acquire customers by improving the process maturity of its 2nm GAA technology.

Looking ahead to 2025, for DRAM, Samsung plans to expand the sales of HBM3E and the portion of high-end products such as DDR5 modules with 128GB density or higher for servers and LPDDR5X for mobile, PC, servers, and so on. For NAND, it will proactively respond to the high-density trend based on QLC products — including 64TB and 128TB SSDs — and solidify leadership in the PCIe Gen5 market by accelerating the tech migration from V6 to V8.

The Foundry Business, on the other hand, aims to expand revenue through ongoing yield improvements in advanced technology while securing major customers through successful 2nm mass production. In addition, integrating advanced nodes and packaging solutions to further develop the HBM buffer die is expected to help acquire new customers in the AI and HPC sectors, according to Samsung.

(Photo credit: Samsung)

According to TrendForce’s latest memory spot price trend report, regarding DRAM, price trends for DDR5 and DDR4 in the spot market will diverge, and DDR4 is unlikely to experience a price rebound anytime soon. As for NAND flash, Samsung’s recent notification of EOL (End of Life) for MLC products has led to a small price hike for small-capacity MLC eMMC in the spot market, though the phenomenon is likely to be temporal. Details are as follows:

DRAM Spot Price:

The spot market is showing an overall price trend similar to that of the contract market. Spot prices of DDR5 products remain relatively stable, whereas spot quotes for DDR4 products are under significant downward pressure. To avoid subsequent inventory pressure, the three major DRAM suppliers are eager to offload their DDR4 chip inventories. Hence, TrendForce forecasts that price trends for DDR5 and DDR4 in the spot market will diverge, and DDR4 is unlikely to experience a price rebound anytime soon. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) has fallen by 0.94% from US$1.905 last week to US$1.887 this week.

NAND Flash Spot Price:

The competitions of price slashing are becoming even more severe within the spot market as suppliers are rushing to cash out their inventory with the imminent arrival of Chinese New Year. It is worth noting that Samsung’s recent notification of EOL for MLC products has prompted spot traders to control their stocks and clients of industrial/automotive applications to advance in stocking activities, which led to a small price hike for small-capacity MLC eMMC in the spot market. With that said, the aforementioned phenomenon is likely to be temporal since there is still quite a bit of time before the said EOL arrives, and that market provision remains relatively ample. Spot prices will thus continue to drop as a result. Spot prices of 512Gb TLC wafers have dropped by 1.93% this week, arriving at US$2.445.