July DRAM Price Decline Eases... NAND Spot Prices Partially Stir

PC DDR4 DRAM Contract Prices Decline Slows
Some NAND Spot Prices Rise After Additional Production Cuts
High-Value HBM and DDR5 Drive Industry Recovery Expectations

With the effect of artificial intelligence (AI) increasing demand for high-value-added DRAM, the price decline of general DRAM for PCs is slowing down. Following news of additional production cuts in the memory semiconductor industry, some NAND flash prices have turned to a recovery trend. From the second half of the year, a recovery in the DRAM-centered market is expected to begin in earnest.

Market research firm DRAMeXchange reported on the 31st that the fixed transaction price (B2B contract price) of Double Data Rate (DDR)4 DRAM (8Gb 1Gx8) used for PCs this month fell 1.47% from the previous month to $1.34. The price of this product has fallen for four consecutive months since April. However, the rate of decline has been decreasing from April (-19.89%) to May (-3.45%) and June (-2.86%). Amid the growing demand for high-value-added DRAM such as DDR5, the semiconductor bottom theory is gaining traction, and the price decline of DDR4 DRAM products is also slowing down.

The fixed transaction price of NAND flash (128Gb 16Gx8) used for memory cards and USBs this month is $3.82. It has maintained the same price since April. The spot prices (transaction amounts centered on actual demand at distributors, etc.) of some products turned to an upward trend on the 28th. As of the afternoon of the 31st, the price of Single-Level Cell (SLC) NAND (8Gb 1GBx8) rose 0.15% compared to the previous day, and 3D Triple-Level Cell (3D TLC) NAND (512Gb) increased by 0.18%. After Samsung Electronics (on the 27th) and SK Hynix (on the 26th) announced additional NAND production cut plans, the previously stable spot prices began to stir. While the industry mainly watches fixed transaction prices, the spot price trend is considered a leading market indicator as it is later reflected in fixed transaction prices.

The semiconductor industry expects that the market recovery centered on high-value-added DRAM will begin in earnest in the second half of the year. This is because demand for AI DRAM such as High Bandwidth Memory (HBM) and DDR5 is rapidly increasing. Prices are also expected to rise. Market research firm TrendForce predicted that DDR5 DRAM prices will rise 0-5% in the third quarter compared to the previous quarter. It also forecasted that DDR5 prices could increase from 15% in the second quarter to over 20% in the third quarter compared to DDR4. Although HBM is more than six times more expensive than general DRAM, demand exceeds supply in the market, so prices may rise further.

In the securities industry, it is expected that Samsung Electronics and SK Hynix, which are currently recording losses, will recover profitability in the DRAM business within the year thanks to this demand. Cha Min-sook, a researcher at Korea Investment & Securities, said, "(Samsung Electronics) will turn to DRAM profitability in the third quarter, and the memory market will fully enter an upcycle," adding, "With the seasonal peak in the third quarter and the supply adjustment effect through production cuts, memory supply and demand is expected to improve rapidly." Lee Min-hee, a researcher at BNK Investment & Securities, also said, "From the third quarter, (SK Hynix) is expected to turn to DRAM profitability."