"D-RAM Prices Rise"…Price Increase Due to Reduced Supply of Korean DDR3 Amid Generation Shift

After Weakness Recovery in Q1, Prices Expected to Rebound 5% in Q2

[Asia Economy Reporter Park Sun-mi] Korean DRAM manufacturers such as Samsung Electronics and SK Hynix are sharply reducing the supply of DDR3 consumer DRAM, leading to a forecast of price increases worldwide this year due to supply shortages.

On the 8th, market research firm TrendForce predicted that DDR3 consumer DRAM prices in the second quarter of this year will rise by approximately 0-5% due to the rapid decrease in supply. After a downward trend until last year, DDR3 prices are expected to recover in the first quarter of this year and turn to a price rebound in the second quarter.

DDR3, used in networking product groups such as set-top boxes (STB), routers, and modems that do not require high-performance chips, still has strong demand. However, leading Korean DRAM manufacturers like Samsung Electronics and SK Hynix are reducing DDR3 production and focusing on producing high-performance, low-power DRAM, causing demand to exceed supply.

The memory semiconductor industry is currently undergoing a generational shift in DRAM.

Intel and AMD have announced plans to release new PC CPUs supporting DDR5 within this year. Accordingly, Samsung Electronics and SK Hynix plan to complete DDR5 product development and expand supply in line with the launch of new server processors supporting DDR5. As DRAM manufacturers proceed with the generational shift to DDR5, they are reducing existing DDR3 supply, which is expected to lead to price increases.

Although Korean DRAM manufacturers are accelerating the reduction of DDR3 production, there are few alternatives worldwide to replace it. Taiwanese DRAM companies such as Nanya and Winbond are focusing on DDR3 production and increasing production facilities, but new lines will only be operational in 2023-2024. Chinese companies like CXMT and GigaDevice still have low yields (the ratio of good products among finished products).

TrendForce explained, "From the DDR3 supply perspective, Samsung and SK Hynix are reducing DDR3 production and plan to declare end-of-life (EOL) for some product lines. Although a sharp decline in DDR3 supply is imminent, demanders are anticipating further price increases and are procuring DDR3, making supply and demand even tighter."

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