"Global DRAM Market to Shift to 'Oversupply' Next Year... Possible Price Rebound in Second Half"

[Asia Economy Reporter Jeong Hyunjin] The global DRAM market's sales volume for next year is expected to remain at a level similar to this year. Although an oversupply situation, where supply exceeds demand, is anticipated in the first half of next year, causing DRAM prices to drop significantly, major DRAM suppliers such as Samsung Electronics and SK Hynix are expected to adjust supply and demand, potentially ending the 'downcycle' early and leading to a price rebound from the second half of the year.

On the 5th, Taiwanese market research firm TrendForce forecasted that the total global DRAM market sales next year will reach $91.544 billion (approximately 108.5 trillion KRW), a 0.3% increase compared to this year's estimated sales of $91.27 billion. The total DRAM market sales, which remained in the $60 billion range in 2019 and last year, are expected to exceed $90 billion this year, growing 36% year-on-year thanks to the semiconductor boom.

Due to ongoing concerns about a downturn in the DRAM market, next year's sales volume is projected to be nearly flat. While DRAM supply is expected to increase by 18.6% next year, demand is forecasted to grow by only 17.1%, leading to an oversupply in the market, according to TrendForce's estimate. As a result, even though both supply and demand increase, the average selling price (ASP) of DRAM is expected to drop by 15% next year, meaning sales revenue will not significantly increase.

However, TrendForce's forecast that the price decline will reverse has drawn attention. TrendForce expects the price decline to be pronounced in the first half of next year but predicts that the price drop will narrow in the second half due to increased DDR5 adoption and seasonal demand growth, adding that "there is also a possibility that DRAM ASP will stabilize or rebound." This follows TrendForce's August forecast, which shook the market by predicting DRAM prices would peak and then decline starting in the fourth quarter, now suggesting a potential price rebound in the second half of next year.

In fact, market forecasts suggest that the DRAM market will experience a short-term downturn but gradually recover from the second half of next year. In particular, major DRAM suppliers such as Samsung Electronics and SK Hynix are expected to influence prices by adjusting supply and demand. SK Hynix stated during its Q3 earnings announcement on the 26th of last month, "We are forecasting a conservative business outlook until the first half of next year and plan to respond accordingly." Han Jinman, Vice President of Samsung Electronics' Memory Business Division, also said on the 28th of last month, "The memory market outlook is highly uncertain due to various macro issues," but added, "We expect the situation to ease from the second half of next year."

Meanwhile, the global market sales of NAND flash, another representative memory semiconductor product alongside DRAM, are expected to increase by 7.4% next year to about $74.192 billion. Although NAND supply in bit units is forecasted to increase by 31.8% compared to this year, TrendForce predicts that the average selling price will fall by nearly 18%, similar to DRAM.

According to TrendForce, based on Q2 sales this year, Samsung Electronics holds the largest share of the global DRAM market at 43.6%, followed by SK Hynix at 27.9%. In NAND, Samsung holds the top spot with a 34.0% market share, while SK Hynix ranks fourth with 12.3%. However, when combined with the Intel NAND business division, which SK Hynix is set to acquire, its market share rises to 19%, moving it up to second place.

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