PC DRAM Prices Enter $4 Range After Over 2 Years... NAND Also Hits Highest Level in 3 Years

[Asia Economy Reporter Jeong Hyunjin] The fixed transaction prices of DRAM and NAND flash surged sharply again in July, three months after April. As the semiconductor supercycle is in full swing and memory semiconductor demand continues to outpace supply, PC DRAM prices have risen to the $4 range for the first time in over two years, and NAND flash prices for memory cards and USBs have reached their highest levels in more than three years.

According to Taiwanese market research firm TrendForce on the 30th, the average fixed transaction price of DDR4 8Gb PC DRAM this month was $4.1, up 7.89% from the previous month. This is the first time since April 2019, two years and three months ago, that the fixed transaction price of DDR4 8Gb has exceeded $4.

The fixed transaction price of DDR4 8Gb, which was $2.85 at the end of last year, rose 5.26% in January to reach $3. In April, when the second quarter began, it surged 26.67%, marking the largest increase since January 2017. Since DRAM contracts are often made quarterly, price increases tend to be larger at the start of each quarter in January, April, July, and October.

Recently, some market views suggested that DRAM prices have peaked. This is because reports indicated that as electronic device manufacturers accumulated memory semiconductor inventories, customers resisted price increases during DRAM negotiations in the third quarter. TrendForce evaluated, "Demand for PC DRAM in the spot market has weakened since July, posing a risk of a decline in fixed transaction prices for PC DRAM in the fourth quarter."

TrendForce added, "DRAM sellers are busily adjusting inventories and lowering prices to sell them," noting that "for 8Gb modules, spot prices have already fallen about 10% below the third quarter fixed transaction prices." They continued, "This situation is very different from April, when spot prices exceeded fixed transaction prices by 30%, and considering the inventory levels currently held by PC OEM companies, there is a risk of DRAM price declines."

Another memory semiconductor, NAND flash, also showed an upward trend this month following April. The average fixed transaction price of the general-purpose 128Gb 16Gx8 MLC NAND flash for memory cards and USBs rose 5.48% this month to $4.81. This is the highest price since September 2018 ($5.07). The increase rate remained high following April's 8.57% rise.

Concerns about falling DRAM and NAND flash prices circulating in the market have led to forecasts that the earnings of domestic semiconductor companies such as Samsung Electronics and SK Hynix, leaders in memory semiconductors, could be affected. However, Samsung Electronics expressed a positive outlook on the market during its Q2 earnings announcement held the day before, stating, "Although various uncertainties remain, market demand fundamentals are expected to remain solid in the second half of the year," addressing concerns about a DRAM price peak.

SK Hynix also acknowledged concerns that DRAM demand might peak and decline in the second half of this year, saying that while this may be true for some products, overall memory demand growth is expected to continue. SK Hynix Vice President of Management Support, Noh Jong-won, said, "In the second half, demand is expected to continue from enterprises including data centers. Due to the expansion of 5G smartphone supply and the launch of new CPUs in the second half, demand for high-capacity DRAM and NAND flash is expected to increase through next year."