Increasing PC Demand from Staying Home... 2Q DRAM Prices to Rise Up to 18%

PC Shipments Expected to Increase 18% Year-on-Year This Year
Rising PC Demand Also Drives Up PC DRAM Prices
NAND Flash Prices Projected to Rise 3-8% in 2Q This Year

[Asia Economy Reporter Suyeon Woo] With the increase in non-face-to-face demand due to COVID-19 and the surge in global PC shipments this year, it is forecasted that the price of DRAM for PCs will also rise. The momentum in the PC market that began last year is expected to continue this year, with PC DRAM prices predicted to increase by up to 18% in the second quarter compared to the previous quarter.

According to the industry on the 18th, market research firm IDC recently projected that global PC (notebooks, desktops, workstations, etc.) shipments this year will grow 18.2% year-on-year to 357.4 million units. This figure surpasses last year's growth rate of 12.9%, which was driven by the explosive demand for PCs due to COVID-19.

IDC stated, "As the backlog of programs waiting for development continues to increase worldwide, inventory levels in PC retail channels are at an all-time low," adding, "Because there is a significant backlog of PC shipments postponed from last year to this year, demand is expected to remain robust."

Since COVID-19, remote work, online meetings, and remote learning have become widespread, causing a surge in global PC demand. Initially thought to be a pent-up effect from suppressed demand due to COVID-19, it has now become a ‘new normal’ established by fundamental changes in lifestyle. Researcher Seungwoo Lee from Eugene Investment & Securities said, "The surge in PC demand is not temporary," and added, "The PC, which was a ‘home computer,’ is evolving into a true ‘personal computer’ after COVID-19."

As PC demand surges, price increases for PC semiconductors (DRAM) have become inevitable. Market research firm TrendForce forecasted that due to increased notebook production, PC DRAM prices will rise by 13-18% in the second quarter compared to the previous quarter. While the increase will be limited to 5% until the first quarter of this year, prices are expected to rise sharply from the second quarter, reaching up to 18%.

PC DRAM Price Fixed Price and Spot Price Trends / Data = DRAMeXchange, Eugene Investment & Securities

As of this day, the average transaction price of PC DRAM (DDR4 8Gb) in the spot market was $4.40, a 46% increase compared to the fixed transaction price of $3 announced at the end of last month. TrendForce noted that PC DRAM buyers are recording a low inventory cycle of about 4-5 weeks, and with rising demand for mobile and server DRAM as well, the shortage of PC DRAM, which shares production facilities, may intensify.

Recently, the global semiconductor supply shortage has prolonged, causing manufacturing difficulties across the board in automobiles, smartphones, PCs, and home appliances. Additionally, natural disasters such as cold waves, droughts, and earthquakes have further reduced supply and driven semiconductor prices up.

Not only DRAM but also the NAND flash market, another memory semiconductor, is showing signs of price increases due to supply shortages. TrendForce predicts NAND flash prices will rise 3-8% in the second quarter of this year. The month-long shutdown of Samsung Electronics' Austin plant disrupted the supply of NAND flash controllers, which could cause NAND flash prices to rise more than expected.

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