Samsung Electronics NAND Prices Rise Following DRAM After Production Cuts (Comprehensive)

DRAM Exchange Spot Price Statistics
Price Increase After Samsung's Production Cut Announcement (7th)
Full-Scale Market Recovery Expected in the Second Half

After Samsung Electronics announced production cuts, the spot prices of major DRAM and NAND flash products all rose. It is evaluated that Samsung Electronics' production cut declaration, as the number one player in the memory industry, may have had a ripple effect on the market. However, a full-fledged industry rebound is expected to be possible around the second half of the year.

On the 13th, market research firm DRAMeXchange reported that the price of the 'Double Data Rate (DDR4) 16-gigabit (Gb) 2666' DRAM product was $3.235. This price is the average spot price of the product collected until the afternoon of that day. The DDR4 16Gb 2666 product rose 0.78% compared to the previous day on the 11th and has maintained its price without falling again. The spot price of this product has risen for the first time in 1 year and 1 month since March 7 last year ($7.873).

NAND flash is also showing an upward trend in spot prices. The price of the '3D (3-dimensional) Triple-Level Cell (TLC) 512Gb' product was $4.642 as of the morning of the 13th, up 0.37% from the previous day. This product's price has been rising since Samsung Electronics' production cut announcement. On the day of the announcement, the 7th, it recorded $4.608, marking the first increase since December 22 last year ($4.94). Although the price dipped back to $4.608 on the 11th, it showed an upward trend with $4.625 on the 12th and $4.642 on the 13th.

[Image source=Pixabay]

These products have recently attracted attention due to increasing demand for high-capacity products in the market. DDR4 DRAM is undergoing a generational shift from 8Gb to 16Gb, and TLC NAND is transitioning from 256Gb to 512Gb. The industry places significance on this being the first market change observed after Samsung Electronics officially formalized artificial production cuts by adjusting wafer input volume to reduce memory production.

In the memory industry, major players such as SK Hynix, Micron, and Kioxia had already been cutting production. With Samsung Electronics, the industry leader, joining in, the impact on the market is growing. In the case of DRAM, Samsung Electronics' production cut declaration, which holds nearly half of the market share, is also evaluated to have stimulated buyer sentiment. According to market research firm TrendForce statistics, Samsung Electronics recorded a 45.1% market share in the DRAM market and a 33.8% market share in the NAND market in the fourth quarter of last year.

Of course, it remains to be seen whether this rise in spot prices is a clear signal of market change, as spot price data is highly volatile. The market expects the effects of production cuts in the memory industry to become fully apparent in the second half of the year. Song Myung-seop, a researcher at Hi Investment & Securities, said, "If customers' inventories sufficiently decrease after the third quarter and semiconductor demand revives from the fourth quarter, the semiconductor industry could enter a recovery phase supported by a low production growth rate."

Spot prices are transaction prices centered on actual demanders through distributors. While the industry mainly monitors contract prices between companies (fixed transaction prices), the spot price trend is considered a leading indicator to gauge market conditions because it is reflected in fixed transaction prices.