D-RAM Fixed Price Plummets, Semiconductor Export Pillar Also at Risk

Samsung Electronics DRAM (file photo)

[Asia Economy Reporter Changhwan Lee] The fixed price of semiconductor DRAM has fallen for the first time this year. Concerns are growing over the decline in third-quarter earnings of our leading companies such as Samsung Electronics and SK Hynix, which focus on DRAM.

According to market research firm DRAMeXchange on the 1st, the average fixed price of DDR4 8-gigabit (Gb) DRAM products, mainly used in PCs, fell 5.4% from the previous month to $3.13 in July.

The fixed price of DRAM had continuously risen from January to May this year but remained flat in June and then turned downward last month.

Prices of server DRAM also declined. The price of server DRAM (32GB) in July recorded $134, down 6.39% from $143 in June.

The spot price, which precedes the fixed price, had already plunged, making the decline in fixed prices virtually predictable. The spot price of DDR4 8Gb DRAM was $2.62 as of the previous day.

The spot price of DDR4 8Gb DRAM has been falling for four consecutive months since hitting a yearly high of around $3.6 in early April. The spot price has been significantly below the fixed price, fueling ongoing concerns about a drop in fixed prices.

DRAM showed a solid price trend in the first half of this year, benefiting from the special demand caused by online education and remote work due to the COVID-19 pandemic. However, it is reported that orders have decreased recently as companies' inventories have increased.

Samsung Electronics and SK Hynix both forecast a decline in DRAM prices in the second half during their recent earnings conference calls.

Samsung Electronics stated, "We believe customers have slightly increased inventories within the normal range to improve responsiveness to urgent orders," and predicted, "Server demand will somewhat decrease compared to the first half."

SK Hynix also anticipated, "A partial decline in DRAM selling prices is inevitable in the third quarter."

The downward trend in semiconductor prices is expected to continue for the time being. Market research firm TrendForce predicted, "Semiconductor prices, which started to fall in July, will decline by 5 to 7% in August as well."

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