Q3 DRAM Price Forecast Revised Down Again... TrendForce Predicts 13-18% Decline

TrendForce Revises Consumer DRAM Price Forecast After Just Over a Month

Samsung Electronics Semiconductor (DS) Division Hwaseong Campus. (Photo by Samsung Electronics)

[Asia Economy Reporter Moon Chaeseok] It is forecasted that the price of memory semiconductor DRAM in the third quarter will fall by up to about 18% compared to the second quarter. This is a downward revision of 5 percentage points (p) from the previous estimate of a maximum 13% decline quarter-on-quarter. Products sold by companies such as Samsung Electronics and SK Hynix are also affected, raising concerns about profitability decline due to increased management uncertainty.

According to the industry on the 11th, Taiwanese market research firm TrendForce stated yesterday afternoon, "Korean suppliers, who are strong in DRAM, increased their willingness to compromise on prices to promote purchases by distributors and customers, causing prices to fall, and other companies had no choice but to significantly lower their selling prices accordingly," and predicted, "Consumer DRAM prices in the third quarter will drop by up to 18%."

On the 4th of last month, TrendForce forecasted that consumer DRAM prices in the third quarter would be 8-13% lower than in the second quarter. At that time, the decline range was already expanded by 5 percentage points from the previous estimate of 3-8%, and now, after about a month, the decline range has been raised by another 5 percentage points.

TrendForce also expects consumer DRAM prices in the fourth quarter to be 3-8% lower than in the third quarter. This is an expansion of the decline range by 3 percentage points from the estimate of 0-5% on the 4th of last month. TrendForce said, "We expect consumer DRAM prices to continue to fall until the market oversupply is resolved," adding, "Therefore, consumer DRAM prices are likely to be 3-8% lower in the fourth quarter as well, and the possibility of continuous decline cannot be ruled out."

The forecast released by TrendForce this time is for consumer DRAM prices such as high-performance set-top boxes, game consoles, and smart TVs. It did not disclose price forecasts for high value-added DRAM such as PC, server, mobile, and graphics.

TrendForce's analysis drew attention as it came right after U.S. companies such as memory semiconductor company Micron, graphics processing unit (GPU) semiconductor company Nvidia, and comprehensive semiconductor company Intel announced downward revisions of their earnings. This analysis implies a sluggish semiconductor market due to a global demand decline. On the 9th (local time), Micron announced that its revenue forecast for the fourth quarter (June to August) under its accounting standards would fall below the previously predicted $6.8 billion to $7.6 billion (approximately 8.9 trillion to 9.9 trillion KRW). Nvidia revised its second-quarter earnings down by 17% the day before, and Intel also reported last month that its second-quarter revenue decreased by 22% year-on-year.

The domestic industry responded that this analysis result cannot be ignored. The fact that the forecast for servers and mobile was not downgraded brought some relief to the industry. According to the industry, SK Hynix's sales proportion of server and mobile DRAM is about 80%. An industry official said, "A maximum 5 percentage point adjustment is a considerable proportion (adjustment)," and interpreted it as an analysis result emphasizing that the DRAM market in the second half will be worse than expected.

The industry showed a cautious response, expecting to adopt management strategies to defend profitability by adjusting production volume and offering high value-added solution products. An industry official explained, "In the case of DRAM, rather than reckless sales expansion, we plan to supply flexibly according to demand."

Samsung Electronics showcased large-capacity petabyte memory solutions and CXL memory semantic SSD solutions consecutively at FMS on the 3rd. SK Hynix also entered the competition to dominate the next-generation memory semiconductor market by releasing a DDR5 (Double Data Rate 5) DRAM-based CXL memory sample on the 1st.