Due to Cryptocurrency Price Decline... Soaring Graphic DRAM Prices Expected to Stabilize in 4Q

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The price of graphic DRAM, which showed double-digit increases throughout the first half of this year, is expected to stabilize starting from the fourth quarter.

On the 3rd, Taiwanese market research firm TrendForce forecasted that the contract price of graphic DRAM in the third quarter of this year would rise by 10-15% compared to the previous quarter. This is slightly lower than the 20-25% price increase seen in the second quarter. At the same time, TrendForce revised its previous forecast of a 5-10% increase in graphic DRAM prices for the fourth quarter down to a stable trend.

The reason for TrendForce’s adjustment in price outlook is interpreted as reflecting the sharp decline in cryptocurrency prices such as Bitcoin and Ethereum since May. In recent months, successive regulations by major governments have led to a drop in cryptocurrency prices and reduced interest among miners and investors. Representative cryptocurrencies Bitcoin and Ethereum have plummeted by more than 50% within two months since May. Consequently, the spot prices of graphic cards have fallen by 20-60% over the past month, narrowing the price gap with contract prices, especially for high-performance graphic DRAM like GDDR6, which had previously been significantly higher than contract prices.

TrendForce stated, "With the cryptocurrency market remaining weak and ongoing issues such as the COVID-19 pandemic and component supply problems, if smartphone and PC manufacturers reduce production volumes in the future, graphic DRAM prices will no longer rise in the fourth quarter."

However, despite this situation, graphic DRAM prices are not expected to immediately turn downward. This is because DRAM manufacturers are prioritizing the production of server DRAM, resulting in relatively limited supply of graphic DRAM due to production line constraints, while demand for graphic DRAM used in PCs and laptops remains high. Additionally, cryptocurrency prices have shown a slight upward trend since mid-last month, so the impact of these price changes on future graphic card demand will need to be monitored.

TrendForce added, "The spot price of graphic DRAM, which is highly influenced by market conditions, is already reflecting the reduced demand for graphic cards used in cryptocurrency mining," and "the supply of used graphic cards is also increasing, so some graphic card manufacturers may offer promotional prices to expand sales."

Graphic DRAM is memory used for processing graphics such as images and videos. It is used in PCs, video playback devices, and other equipment to quickly process graphics or videos according to commands from the graphics processing unit (GPU). However, recently, graphic cards have been used for cryptocurrency mining, causing prices to rise significantly this year.