Faster-than-Expected DRAM Price Increase... "Up to 23% Rise Expected in Q2 This Year"

[Asia Economy Reporter Jeong Hyunjin] As the semiconductor shortage continues, it is forecasted that DRAM prices will rise by up to 23% in the second quarter of this year. This is expected to exceed the initially anticipated mid-to-high teens increase of around 10%, leading to improved earnings for Samsung Electronics and SK Hynix.

On the 21st, Taiwanese market research firm TrendForce announced that it has revised its forecast for the overall DRAM price increase in the second quarter from the original 13-18% to 18-23%. This adjustment was made due to expected price increases across PC, mobile, and server DRAM segments. TrendForce explained that the average selling price (ASP) of the PC DRAM module 'DDR4 1G*266Mbps' currently being traded rose by 25% compared to the previous quarter. Although price negotiations for the second quarter are not yet complete, the increase has already far exceeded the previously expected rise of about 20%.

(Data provided by TrendForce)

In particular, TrendForce expects PC DRAM prices in the second quarter to rise by 23-28%, which is more than 10 percentage points higher than the initial forecast of 13-18%. PC DRAM prices have surged recently due to a sharp increase in laptop demand. The COVID-19 pandemic has boosted non-face-to-face demand such as remote classes and telecommuting, increasing laptop sales and prompting manufacturers to aggressively raise production targets. Additionally, the second quarter is generally the peak season for laptop production, and TrendForce expects manufacturers’ quarterly laptop production volume to increase by about 7.9% compared to the previous quarter.

Server DRAM prices have also been revised upward from the initial forecast of up to 20% to an expected increase of about 20-25% compared to the previous quarter. This is attributed to stronger-than-expected investment expansion by IT companies and demand for cloud migration.

DRAM prices have been rising rapidly since the beginning of this year. For example, the spot price of PC DRAM DDR4 8Gb was around $3.4 at the start of the year but rose to $4.5 by mid-last month, an increase of about 30%. Spot prices tend to lead fixed transaction prices, which are contract prices used for large-scale transactions between companies.

The rise in DRAM prices is favorable for Samsung Electronics and SK Hynix. According to TrendForce, as of the end of last year, Samsung Electronics held the largest share of the global DRAM market sales at 42.1%. SK Hynix followed in second place with 29.5%, and US-based Micron ranked third with 23%. SK Hynix and Samsung Electronics are scheduled to announce their first-quarter earnings on the 28th and 29th of this month, respectively.

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