Semiconductor Industry, Rising Expectations for Memory Price Rebound Increasing

"Expectations for a rebound in the second half... Possible as early as Q2"

DRAM Module

[Asia Economy Reporter Park Sun-mi] As Samsung Electronics and SK Hynix have both completed their announcements of the 2021 performance with the superlative 'largest,' the market is focusing on the timing of the memory price rebound that will steer this year's performance.

On the 29th, the semiconductor and securities industries are placing weight on the possibility that the memory price rebound will occur in the second half of this year, or as early as the second quarter. Samsung Electronics stated during its earnings conference call on the 27th that regarding DRAM prices, "We have definitely detected a trend where the volatility and cycle of the memory market compared to the past are shrinking," and "External institutions have made predictions about a market turnaround, and (a rebound in the first half) is a scenario that we also consider possible." SK Hynix also forecasted during its conference call on the 28th that "Supply chain issues will gradually be resolved in the second half, leading to increased memory demand."

The securities industry is also optimistic about the possibility of a rebound starting from the second quarter, although it is difficult to expect a memory price rebound immediately in the first quarter. Lee Jae-yoon, a semiconductor analyst at Yuanta Securities, explained, "Initially, the timing of the DRAM price rebound was expected in the third quarter of this year, but the possibility of a rebound from the second quarter is increasing," adding, "The overall demand base (servers, PCs, etc.) is better than market concerns."

Choi Do-yeon, a researcher at Shinhan Financial Investment, also said, "We expect a price rebound for both DRAM and NAND in the second quarter of this year," adding, "The memory semiconductor market is improving faster than expected," and diagnosed, "The approximately one-month production disruption at Samsung Electronics' Xi'an NAND front-end fab and Micron's memory back-end fab due to the COVID-19 outbreak and lockdown in Xi'an, China, is an event that can accelerate the timing of the market rebound by depleting inventory."

The decline in memory prices began in earnest from the fourth quarter of last year. The industry is keeping open the possibility that semiconductor profits could be hit by falling memory prices at least through the first quarter of this year.

According to market research firm TrendForce, the fixed transaction price of PC DRAM general-purpose products (DDR4 8Gb), which turned downward with a sharp 9.5% drop in October last year, continued to decline in January this year. The average price in January recorded $3.41, down 8.09% from the previous month. The fixed transaction price of server DRAM products has also been declining for four consecutive months. However, NAND prices have remained flat for six consecutive months since August last year.