The recovery in demand for PCs and smartphones will take time, leading to a halt in the upward trend of DRAM prices, remaining stable for two consecutive months. However, the rapid growth in demand for High Bandwidth Memory (HBM), essential for data center servers and generative AI, is expected to boost future DRAM prices as the production trend of HBM rises.

The Nikkei News reported on May 18th that the recovery in demand for PCs and smartphones will take time, leading to a halt in the upward trend of DRAM prices used in smartphones, PCs, and data center servers for temporary data storage.

In April 2024, the wholesale price (bulk transaction price) of the benchmark product DDR4 8Gb was around USD 1.95 per unit, and the price of the smaller capacity 4Gb product was around USD 1.50 per unit, both remaining unchanged from the previous month (March 2024) and marking the second consecutive month of stability.

As of February 2024, DRAM prices had risen for four consecutive months. DRAM wholesale prices are negotiated between memory manufacturers and customers monthly or quarterly. Reportedly, approximately 50% of DRAM demand comes from PCs and servers, while around 35% comes from smartphones.

The report indicated that the demand for HBM, essential for generative AI, is rapidly increasing, and market expectations for the production trend of HBM are expected to boost future DRAM price increases.

A source cited in the report, which is an Electronic product trader, noted that some major manufacturers have accepted the memory manufacturers’ price hike requests. A PC manufacturer source cited by the report also stated that DRAM wholesale prices from April to June are expected to rise by 5-10% compared to January to March.

Another source cited by the report stated that the facilities required to produce HBM are approximately three times larger than those needed for producing general DRAM. If HBM production increases, the production volume of other DRAMs will decrease, thereby driving up prices. Another source cited in the report stated that supply cannot keep up with demand, and pricing power is currently in the hands of memory manufacturers.

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• [News] Samsung and SK Hynix Urgently Reallocate 20% of DRAM Production Capacity to Support Rising HBM demand
• [News] Three-way Contest for HBM Dominance, Uncertainties Surrounding China’s Supply Chain Involvement

(Photo credit: SK Hynix)

The surge in memory product prices continues, driven by the AI wave revitalizing the memory market. According to a report from Liberty Times Net, prices of high-performance DRAM are also on the rise. Industry sources cited by the same report have indicated that SK Hynix’s LPDDR5/LPDDR4/DDR5 and other DRAM products will see a comprehensive price hike of 15-20%.

According to a report from Chinese media Wallstreetcn, it has cited industry sources, noting that SK Hynix’s DRAM product prices have been steadily increasing month by month since the fourth quarter of last year, with cumulative increases ranging from approximately 60% to 100%. This upward trend in memory prices is expected to continue until the second half of the year.

On April 25th, SK Hynix announced its first-quarter financial results, with revenue soaring to KRW 12.42 trillion, marking a staggering 144.3% increase compared to the same period last year. Operating profit reached KRW 2.88 trillion, far exceeding market expectations of KRW 1.8 trillion, and achieving the second-highest historical figure for the same period.

Contrasting with the loss of KRW 3.4 trillion in the same period last year, this performance represents a significant turnaround for SK Hynix, signaling a shift from a prolonged period of stagnation to comprehensive recovery.

Looking ahead, SK Hynix expressed optimism, stating that the growing demand for memory driven by AI and the recovery of demand for general DRAM products starting from the second half of this year will contribute to a stable growth trend in the memory market for the rest of the year.

Industry sources cited by the report predict that as demand for high-end products like HBM increases, requiring larger capacity compared to general DRAM products, the increase in output of high-end products will lead to a relative decrease in supply of general DRAM products. Consequently, both suppliers and clients are expected to deplete their inventories.

In line with the trend of growing memory demand for AI applications, SK Hynix has decided to ramp up the production of its HBM3e products, which began global production in March this year, and expand its customer base. Additionally, the company plans to launch its fifth-generation 10-nanometer class (1b) 32Gb DDR5 DRAM products within this year, aiming to strengthen its market leadership in high-capacity DRAM products for servers.

Read more

• [News] HBM Craze Continues! SK Hynix Reports Sold Out for this Year, Next Year’s HBM Capacity Nearly Fully Booked
• [News] HBM Boosts SK Hynix’s Q1 Revenue to Record High, 734% Jump in Operating Profit QoQ

(Photo credit: SK Hynix)

According to a report from Korean media outlet viva100, Samsung has signed a new USD 3 billion agreement with processor giant AMD to supply HBM3e 12-layer DRAM for use in the Instinct MI350 series AI chips. Reportedly, Samsung has also agreed to purchase AMD GPUs in exchange for HBM products, although details regarding the specific products and quantities involved remain unclear.

Earlier market reports indicated that AMD plans to launch the Instinct MI350 series in the second half of the year as an upgraded version of the Instinct MI300 series. The MI350 series is reportedly expected to adopt TSMC’s 4-nanometer process, delivering improved computational performance with lower power consumption. The inclusion of 12-layer stacked HBM3e memory will enhance both bandwidth and capacity.

In October 2023, at Samsung Memory Tech Day 2023, Samsung announced the launch of a new HBM3e codenamed “Shinebolt.” In February of this year, Samsung unveiled the industry’s first HBM3e 12H DRAM, featuring 12 layers and a capacity of 36GB, marking the highest bandwidth and capacity HBM product to date. Samsung has provided samples and plans to commence mass production in the second half of the year.

Samsung’s HBM3e 12H DRAM offers up to 1280GB/s bandwidth and 36GB capacity, representing a 50% increase compared to the previous generation of eight-layer stacked memory. Advanced Thermal Compression Non-Conductive Film (TC NCF) technology enables the 12-layer stack to meet HBM packaging requirements while maintaining chip height consistency with eight-layer chips.

Additionally, optimizing the size of chip bumps improves HBM thermal performance, with smaller bumps located in signal transmission areas and larger bumps in heat dissipation areas, contributing to higher product yields.

The adoption of HBM3e 12-layer DRAM over HBM3e 8-layer DRAM has shown an average speed improvement of 34% in AI applications, with inference service users increasing by over 11.5 times.

In view of this matter, industry sources cited by the report from TechNews has indicated that this deal is separate from negotiations between AMD and Samsung Foundry for wafer production. AMD plans to assign a portion of new CPUs/GPUs to Samsung for manufacturing, which is unrelated to this specific transaction.

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• [News] Samsung Reportedly Establishes New HBM Team, Looking to Improve AI Chip Yield
• [News] Memory Manufacturers Vie for HBM3e Market

(Photo credit: Samsung)

Amid the memory market’s gradual recovery, memory manufacturers are aggressively increasing prices back to pre-reduction levels and achieve profitability. According to a report from TechNews, however, module suppliers are reportedly resisting these price hikes and considering ways to negotiate with manufacturers, potentially through non-purchasing actions.

With the continued growth in demand for AI and high-performance computing, memory prices are on the rise. According to TrendForce, Kioxia and WDC have increased capacity utilization since Q1 2024, while others maintain low production strategies. Although NAND Flash procurement slightly decreased in the second quarter compared to the first quarter, the overall market sentiment continues to be influenced by reduced supplier inventory and production cut effects. As a result, NAND Flash contract prices for the second quarter are expected to see a strong increase of approximately 13-18%.

Apart from NAND Flash, in the realm of DRAM, although suppliers’ inventories have decreased, they have not yet returned to healthy levels. Moreover, in the context of improving losses, suppliers are increasing capacity utilization.

However, due to unfavorable overall demand prospects for 2024 and significant price hikes by suppliers since the fourth quarter of 2023, the momentum for inventory replenishment is expected to weaken gradually. Therefore, TrendForce predicts that the second-quarter contract price increase for DRAM will converge to 3% to 8%.

Despite the continuous rise in memory prices driven by applications in artificial intelligence and high-performance computing data centers, demand in the consumer market remains subdued. Manufacturers persist in strong pricing strategies, prompting backlash from module suppliers.

Additionally, it is reported that Micron is preparing to increase second-quarter quotes by over 25%, which is putting pressure on module suppliers and potentially leading to a standoff with manufacturers.

On the other hand, module suppliers are showing a lukewarm response to the price increases and are particularly hesitant to accept price increases themselves.

However, with the three major memory manufacturers facing constraints on adding new capacity in the short term, whether module suppliers will be forced to accept significant price increases remains to be seen.

Read more

• [News] Micron Expects 4-6% Quarterly DRAM Supply Impact Post Taiwan Earthquake
• [Insights] The Spot Price of DRAM Continues to Decline, Weak Trading Volume for NAND Flash

Recently, major memory manufacturers such as Micron, Samsung, and Western Digital have all announced price hikes. Industry sources indicate that since 1Q24, memory manufacturers stay steadfastly in controlling supply and raising prices. Coupled with the impact of the recent earthquake in Taiwan, the supply-demand imbalance has further driven up memory prices.

However, it’s worth noting that according to industry experts, the primary driving force behind the recent price increases in the memory market is still from manufacturers. As to the demand side, significant growth are mainly seen in industrial control needs, AI large models, and automotive intelligentization, while other fields have not yet seen obvious growth.

Regarding the impact of the 403 earthquake, TrendForce expects the influence on the output bit of DRAM in 2Q24 to remain within 1%. Specifically, due to Micron’s earthquake-related damages being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing. The subsequent price trends still require observation.

• Has Micron Increased Prices by More Than 20% in Q2?

On April 9th, Taiwanese media reported that Micron has proposed price increases of over 20% for its products in Q2 to most customers, with price negotiations still ongoing.

It is reported that after the earthquake on April 3, Micron temporarily suspended the announcement of DRAM product quotation for the second quarter.

Currently, TrendForce maintains its previous expectations for the second-quarter contract price of Mobile DRAM, with an increase of about 3-8% QoQ. As for Server DRAM, due to the earthquake-related damages to Micron being more concentrated in advanced processes, TrendForce does not rule out the possibility of Micron’s Server DRAM final transaction prices increasing, and the subsequent price trends still require observation. In regard to HBM, since most of Micron’s HBM 1beta production and TSV lines are located in Hiroshima, Japan, supply or price remain unchanged.

In the spot market, some module manufacturers like Kingston and ADATA have restarted quoting prices, but no price increase has been implemented yet. TrendForce believes that the earthquake’s impact on pushing up prices is limited.

Overall, due to the relatively low inventory of DDR3, there is still room for price increases. Whereas, DDR4 and DDR5 inventory is comparatively sufficient, coupled with weak demand, which are expected bring the situation of small consecutive price increases caused by the earthquake to return back to normal within a few days.

• Western Digital Continuously Increases NAND Flash and HDD Prices

On April 8, Western Digital confirmed for the first time that there is a shortage of supply for both HDD and SSD, and issued formal customer letters notifying of price adjustments for NAND Flash and hard drive products. Western Digital stated that the demand for flash memory and hard drive products has exceeded expectations, leading to supply shortages. Prices for these products will continue to be adjusted this quarter, with some adjustments taking immediate effect.

Western Digital acknowledged that it will perform the frequent price reviewing and adjust it accordingly. Furthermore, Western Digital also stated that its ability to handle orders outside of the plan is quite limited, so any order changes need to be notified in advance.

• Samsung Raises Prices of Enterprise SSD?

In the past two weeks, rumor has it that enterprise SSD fell into a supply shortage. According to industry sources, due to the optimistic outlook for SSD to become a part of AI in the future, paired with recent supply tensions, their prices have started to rise. Samsung is rumored to increase prices for enterprise SSD by 20-25% in 2Q24, reversing the downward trend seen in 2023.

Reportedly, Samsung initially planned to raise prices by about 15% compared to the previous quarter, but higher-than-expected demand led Samsung to expand the price hike. Samsung’s enterprise SSD accounts for approximately half of the market share, thus exerting a significant influence on pricing decisions.

A study by TrendForce on March 7 shows that in 4Q23, Samsung ranked first globally in the Enterprise SSD market with a market share of 41.7%, followed by SK Hynix (33.2%), Micron (10.8%), Kioxia (9.4%), and Western Digital (4.9%).

• TrendForce Released Forecasts for DRAM and NAND Flash Contract Prices for 2Q24

In terms of overall price trends, TrendForce estimates that although the inventory of DRAM suppliers has decreased, it has not yet returned to a healthy level. Furthermore, as they gradually shake of the loss situation, suppliers are expected to further increase their capacity utilization rates.

However, due to the lackluster overall demand outlook for this year and the large price increases by suppliers since 4Q23, the momentum for inventory replenishment is expected to weaken. Therefore, TrendForce anticipates that the quarterly increase in DRAM contract prices in the second quarter will converge to 3-8%.

Regarding NAND Flash, TrendForce stated that, except for Kioxia and Western Digital, which have been increasing their capacity utilization rates since 1Q24, other suppliers are generally maintaining a low production strategy.

Although the procurement volume of NAND Flash in 2Q24 has declined slightly compared to 1Q24, the overall market climate continues to be influenced by reduced supplier inventory and the impact of production cuts. Consequently, TrendForce forecasts a strong increase of around 13-18% in NAND Flash contract prices in 2Q24.

Read more

• [Insights] The Spot Price of DRAM Continues to Decline, Weak Trading Volume for NAND Flash
• [Insights] DRAM and NAND Flash Spot Prices Drop as Demand Weakens

(Photo credit: Samsung)