Has DRAM Price Hit Bottom?...Growing Optimism Amid Spot Price Rebound

[Asia Economy Reporter Jeong Hyunjin] The spot trading price of DRAM, which had been declining in the second half of this year, is rebounding. With the atmosphere changing after several months, there is growing expectation that the DRAM price has bottomed out and turned upward, potentially easing the previously worsening industry conditions.

According to DRAM Exchange on the 27th, the spot trading price of DDR4 8Gb (1G*8) 2666Mbps, a representative PC DRAM, averaged $3.214 on the 24th, an increase of 1.45% compared to the 22nd two days earlier. As COVID-19 vaccinations spread, PC demand gradually decreased, raising concerns that DRAM prices might fall below the $3 level, but recently they have shown signs of rebound.

Spot trading prices are generally regarded as a kind of indicator to preview the DRAM market conditions. Since DRAM is used in various applications, it is not easy to predict the overall market trend solely based on the representative PC DRAM product, but it greatly helps in grasping the general atmosphere. As spot trading prices fell, actual fixed transaction prices also showed a decline of up to about 9% last month.

The spot trading price of this product surged to $5.3 in March due to increased demand but then gradually declined, entering the $3 range in August. During this period, market research firms such as TrendForce and investment bank (IB) Morgan Stanley expressed concerns about worsening industry conditions, saying "a winter is coming to the semiconductor market." At that time, the market speculated that the DRAM market might enter a full-fledged downcycle, predicting possible earnings deterioration for major DRAM manufacturers.

However, in just three months, the atmosphere in the DRAM market has reversed again. On the 18th, Morgan Stanley stated in a Samsung Electronics report, "Although memory prices remain weak, fourth-quarter prices are 'less bad' than analysts expected," and forecasted that "the downcycle will be shorter next year." Citigroup also analyzed on the same day that "the DRAM price adjustment is entering its final stage."

As these outlooks change, the stock prices of major DRAM companies such as Samsung Electronics, SK Hynix, and US-based Micron are also soaring. Samsung Electronics' stock price, which was 70,200 won on the 18th, rose more than 7% within five trading days before slightly falling and closing at 72,300 won the day before. SK Hynix's price had fallen below 100,000 won in October but showed an upward trend afterward, recovering to the 120,000 won level intraday on the 22nd.

Lee Wonsik, a researcher at Korea Investment & Securities, said, "The DRAM spot trading price will pass the bottom through this rebound and continue a trend of increase," adding, "Although the spot price is still 14% lower than the fixed transaction price, and additional declines in fixed prices are expected in the first half of next year, if the decline in fixed prices does not significantly deviate from current market expectations, the negative impact on memory companies' stock prices will not be substantial."

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