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.

As Samsung is reportedly scaling down its foundry and legacy DRAM production, the South Korean semiconductor giant is now said to be planning the sale for its outdated equipment in China, including the NAND Flash facilities in Xi’an, according to a report by the Chosun Daily.

The report notes that the struggling semiconductor giant is gearing up to sell old equipment from multiple front-end and back-end production lines, which could not be sold in a timely manner and have been accumulating due to pressure from Washington.

The equipment set for sale primarily consists of 100-layer 3D NAND machinery, according to the Chosun Daily. Since last year, Samsung has been transitioning its Xi’an plant to 200-layer production processes, the report notes.

According to another report by the Korea Economic Daily, following Samsung’s current mass production of its 286-layer V9 NAND flash chips, the company’s Device Solutions division is targeting the production of vertical NAND with a minimum of 400 stacked layers as early as 2026, which makes the 100-layer 3D NAND machinery outdated.

The Chosun Daily report indicates that the old machines are expected to be sold through local Chinese companies or third parties. Memory giants such as Samsung and SK hynix have traditionally sold their used equipment to external companies through brokers after replacing it with advanced machinery, with China rumored as a major buyer.

It is worth noting that following the U.S. Commerce Department’s ban in October 2022 on exporting advanced semiconductor equipment to Chinese companies, these sales have reportedly ceased. According to the report, under U.S. regulations, equipment used in DRAM production processes of 18nm or below, system semiconductors of 14nm or below, and NAND flash memory of 128 layers or above cannot be exported to China.

However, in order to secure Validated End User (VEU) status from the U.S. government, Samsung and SK hynix have rumored to refrain from selling old equipment, even those not restricted by these sanctions, the report suggests.

Once a company is included in the VEU program, it can export items specified in collaboration with the U.S. Commerce Department without a separate permit process or expiration, resulting in an indefinite waiver of U.S. export control regulations, the report explains.

Despite these concerns, following weaker third-quarter results, Samsung is set to begin extensive organizational restructuring and cost-saving measures by the end of the year. As Samsung is expected to adjust utilization rates and staffing levels on its domestic legacy lines, similar changes are anticipated for its Chinese facilities, according to senior management cited by the report.

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(Photo credit: Samsung)

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.

Though having abandoned its initial IPO plan in October due to lower market valuation, Kioxia asserts its optimism on NAND. According to a report by Reuters, the Japanese memory giant anticipates flash memory demand to grow approximately 2.7 times by 2028, fueled by the surge in artificial intelligence applications.

According to the report, Kioxia is preparing a significant capacity expansion at its new facility in Kitakami, Iwate Prefecture, in northern Japan, which was originally set to begin operation last year. Amid challenges due to a downturn in the memory chip market, the start date has reportedly been postponed to autumn 2025.

Kioxia announced in a press release that the building construction of Fab2 (K2) of its Kitakami Plant was completed in July. In addition, some administration and engineering departments will move into a new administration building located adjacent to K2 beginning in November 2024 to oversee the operation of K2.

Citing Tomoharu Watanabe, Kioxia’s executive vice president, the Reuters report notes that in addition to the sufficient capacity Kioxia has at Yokkaichi, Mei Perfecture, Kioxia’s Kitakami factory is set to begin operations next autumn, and the company expects to have ample space to meet demand.

According to a previous report by The Japan Times, Japan’s industry ministry will provide up to 242.9 billion yen (USD 1.64 billion) in subsidies to support Bain Capital-backed Kioxia and Western Digital in expanding memory chip production facilities in Mie and Iwate prefectures.

In July, the company began sample shipments of its newest generation of NAND flash memory, according to the report. In October, it also begun mass production of the industry’s first Universal Flash Storage Ver. 4.0 embedded flash memory devices with 4-bit-per-cell, quadruple-level cell (QLC) technology.

Kioxia achieved revenue of 428.5 billion yen (about USD 2.75 billion) in the first quarter of fiscal year 2024, ending June 30, reflecting a 33% increase from the prior quarter and setting a new record for quarterly revenue.

According to TrendForce, in the NAND Flash market, Kioxia ranked third in revenue in the second quarter of 2024, with a 13.8% market share, after Samsung (36.9%) and SK Group (22.1%).

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(Photo credit: Kioxia)

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.