[Asia Economy Reporter Changhwan Lee] The spot price of semiconductors has continued to decline for two consecutive months, casting a shadow over the semiconductor market outlook for the second half of the year.
According to market research firm DRAMeXchange on the 23rd, the spot price of DDR4 8-gigabit (Gb) DRAM products, mainly used in PCs, was $3.11 as of the previous day.
The spot price of semiconductors has been steadily falling since early last month when it peaked at $3.60. It has dropped about 14% over two months.
The decline in semiconductor spot prices is attributed to the recent spread of the novel coronavirus (COVID-19), which has significantly reduced smartphone sales, thereby weakening demand for smartphone semiconductors.
According to market research firm Counterpoint Research, global smartphone sales in the first quarter fell 13% year-on-year due to the impact of COVID-19.
The drop in semiconductor spot prices also affects fixed prices. The fixed price for DDR4 8Gb DRAM was recorded at $3.29 last month. Although fixed prices had been steadily rising from January to April this year, the sharp decline in spot prices has made future trends uncertain.
In particular, as spot prices fall below fixed prices, there is a possibility that fixed prices will also decline in the future.
Researcher Seungwoo Lee of Eugene Investment & Securities said, "In past cases, even when spot prices fell, fixed prices rose when spot prices were higher than fixed prices. However, when spot prices fall below fixed prices, fixed prices inevitably fall as well."
He added, "If spot prices continue to decline, the possibility of a bearish reversal in fixed prices will increase."
However, if COVID-19 ends early, semiconductor demand may recover. Although demand for smartphone semiconductors is sluggish, the increase in server demand due to the spread of untact (contactless) services is a positive factor.
It is also positive that semiconductor exports turned to an increase this month. According to the Korea Customs Service, semiconductor exports from the 1st to the 20th of this month increased by 13.4% compared to the same period last year. This was influenced by the continued increase in DRAM exports and the recent rise in exports of multi-chip packaging (MCP) semiconductors, which had been sluggish.
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