Semiconductor Fixed Prices Rise for 4 Consecutive Months, Demand Expands Due to COVID-19

[Asia Economy Reporter Changhwan Lee] Fixed prices for memory semiconductors continued to rise for the fourth consecutive month. While major industries have been hit by the spread of the novel coronavirus (COVID-19), semiconductor prices have instead increased due to rising demand from non-face-to-face activities and reduced supply.

According to market research firm DRAMeXchange on the 3rd, the fixed transaction price of DDR4 8-gigabit (Gb) DRAM products, mainly used in PCs, recorded an average of $3.29 in April, up 11.9% from the previous month.

The fixed price of DDR4 8Gb DRAM rebounded to $2.84 in January after 13 months, then rose to $2.88 in February and $2.94 in March, showing a significant increase in April as well. The April increase was the largest in 3 years and 3 months since January 2017.

The rise in overall DRAM prices was led by a sharp increase in server DRAM demand. The average price increase rate for server DRAM in April was 19.9% compared to the previous month, a significant jump from 5.2% in the prior month.

The increase in server DRAM demand is attributed to COVID-19. As the virus spread, demand for remote work and online activities increased, and semiconductor inventory accumulation by server and PC companies also rose. With limited supply and growing demand, product prices increased.

Hana Financial Investment stated, "The rise in server DRAM prices is due to strong demand in the cloud market, streaming demand, the impact of remote work, and increased demand for high-capacity 64GB products," adding, "Continuous price increases are expected through the third quarter."

PC DRAM prices also continued to rise. The average price increase rate for PC DRAM in April was 11.3%, significantly higher than 2.0% in the previous month. The overall average price increase rate for DRAM and NAND memory semiconductors in April was 10%.

Kim Kyungmin, a researcher at Hana Financial Investment, analyzed, "Demand for server and PC DRAM was stronger than previously known, and supply was tight. Although weakening consumer market demand is a factor to watch, the current situation suggests a bright outlook for fixed prices through the third quarter."

This content was produced with the assistance of AI translation services.