Next Year DRAM Demand 'Plummets'... Forecasted Growth Rate Hits Record Low

[Asia Economy Reporter Park Sun-mi] Due to the intensifying oversupply in the memory semiconductor market, forecasts indicate that next year's DRAM demand growth rate will drop to an all-time low.

On the 6th, Taiwanese market research firm TrendForce diagnosed that the 2023 DRAM market demand bit growth (bit unit shipment growth rate) will be only 8.3%, falling into single digits for the first time in history.

In 2021, supply and demand bit growth were 18.2% and 20.8% respectively, creating an atmosphere where supply could not keep up with demand. However, in 2023, demand bit growth is expected to fall below 10% for the first time, significantly lagging behind the supply bit growth of 14.1%. This means that the DRAM market will continue to face an intensifying oversupply situation at least until next year, with prices continuing to decline.

NAND flash is also expected to experience price declines in the first half of next year due to continued oversupply, but the situation is slightly better than DRAM. The forecasted growth rates for NAND demand and supply are 28.9% and 32.1%, respectively, indicating relatively stronger demand growth compared to DRAM.

The sharp drop in memory semiconductor demand is due to consumers' weakened IT device consumption sentiment amid high inflation and high interest rates. As products requiring memory semiconductors such as PCs and laptops are not selling well, demand has decreased, leading most memory manufacturers to begin inventory adjustment efforts.

In fact, the recent price decline in memory semiconductors has accelerated. The average fixed transaction price of PC DRAM general-purpose products (DDR4 8Gb) in July fell by 14.03% compared to the previous month. The fixed transaction price of NAND general-purpose products for memory cards and USBs also dropped by 3.8%, marking two consecutive months of weakness.

If the oversupply condition in the memory semiconductor market continues, it is expected that Korean companies with high global market shares will inevitably be impacted. As of the first quarter of this year, Samsung Electronics and SK Hynix, two Korean companies, hold market shares of 70% and 53% in the DRAM and NAND markets, respectively.

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