DRAM Prices Continue to Rise... Positive Outlook for Memory Performance in the Second Half

DRAM Prices Continue to Rise in the Second Half
Focus on Supply Shortages of General-Purpose Products

As prices of memory semiconductors, specifically DRAM, continue to rise, a positive outlook is emerging for the second-half performance of domestic memory companies such as Samsung Electronics and SK Hynix. It is expected that the upward trend will persist throughout this year.

According to market research firm DRAMeXchange, the fixed transaction price (contract price) of PC-oriented Double Data Rate (DDR)4 general-purpose products (8Gb 1Gx8) last month was $2.10, marking a 40.0% increase compared to October of last year. DRAM prices have maintained an upward trajectory since October last year.

The recent rise in general-purpose DRAM prices is due to increasing demand while production has not significantly expanded. In particular, memory companies are focusing more on producing High Bandwidth Memory (HBM) rather than general-purpose products, which has amplified this effect. Shin Seok-hwan, a researcher at Daishin Securities, stated, "The aggressive expansion of HBM production capacity by memory companies will encroach upon the capacity for general-purpose DRAM," and predicted, "With conservative capital expenditure plans for 2024-2025, memory prices will continue to rise and profitability will improve."

The price increase trend is expected to continue into the second half of the year. Samsung Electronics, SK Hynix, and the U.S. company Micron are anticipated to focus on expanding production of HBM, which is memory for artificial intelligence (AI) applications. Industry consensus suggests that as demand recovers across various applications in the second half, memory prices may rise due to supply shortages. Market research firm TrendForce forecasts that the average selling price (ASP) of DRAM in the third quarter will increase by 8-13% compared to the previous quarter.

Kim Jae-jun, Vice President and Head of Strategy Marketing at Samsung Electronics’ Memory Business Division, also stated during the first-quarter conference call, "Inventory levels have improved, making supply availability limited," and added, "Additional supply constraints in advanced DRAM processes are expected due to the focus on HBM production in the second half." He further mentioned, "We plan to respond to supply based on actual demand."