DRAM Fixed Price Decline Stops... "Q4 Prices Will Rise"

The representative price indicator showing the semiconductor demand and supply market situation, the fixed transaction price of DRAM, has been confirmed to have stopped declining last month.

On the 4th, global market research firm DRAMeXchange announced that the average fixed transaction price of PC DRAM general-purpose products (DDR4 8Gb 1Gx8) in September remained at $1.30, the same level as the previous month. The average fixed price of DRAM had fallen for five consecutive months until August after dropping 19.89% month-on-month in April this year, but the decline stopped in September as the memory industry's production cuts took effect. Most of the third-quarter DRAM contracts were completed in July and August, which also influenced the price stability in September.

The decline in DRAM prices had been mainly driven by legacy (older) process Double Data Rate 4 (DDR4), which was the target of production cuts in the memory semiconductor industry. The average price drop of DDR4 in the third quarter reached 5.3%. On the other hand, DDR5, which has stronger price defense, saw a 0.7% price rebound.

The industry views that the additional decline in DRAM prices in the fourth quarter will be limited as inventory conditions improve due to DDR4 production cuts and demand for DDR5 increases. DRAM suppliers are no longer offering price discounts, and price rebounds centered on DDR5 are emerging.

Semiconductor market research firm TrendForce also diagnosed that the overall market sentiment is changing as Samsung Electronics, the world's number one memory semiconductor company, announced plans to expand DRAM production cuts and is pushing for price increases. TrendForce forecasted that contract prices for DDR4 products in the fourth quarter could rise by 0-5%, and DDR5 products by 3-8%.

The DRAM spot price, which moves ahead of the fixed transaction price, has also rebounded early. Accordingly, expectations are rising that DRAM inventory adjustments will be completed by the fourth quarter of this year, leading to a full-fledged price recovery next year.

Meanwhile, NAND flash, which is still in the midst of inventory adjustments, showed an average price of $3.82 in September for general-purpose products for memory cards and USB (128Gb 16Gx8 MLC), remaining flat for five consecutive months. Although the semiconductor industry is increasing the scale of NAND production cuts in the second half of this year, which may cause a short-term price rebound within this month, the supply-demand imbalance remains large, making meaningful price recovery difficult.

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