DRAM and NAND Prices Soar in Synchronized Surge

Recent developments in the memory market have been influenced by reduced production from major memory chip manufacturers over the past year. This extended period of decreased supply, coupled with a slight resurgence in end-user demand, has driven up prices for DRAM and NAND Flash memory components. Industry experts anticipate that the upcoming year-end shopping season in Europe and the Lunar New Year buying season in mainland China will continue to bolster the prices of DRAM and NAND Flash memory.

Prominent companies in the memory chip manufacturing sector, such as Samsung, SK Hynix, and Micron, have been consistently adjusting their production capacities. In the past few quarters, market supply has steadily decreased, while signs of a gradual resurgence in market demand have appeared since the third quarter. This has created a fertile ground for a new wave of memory price increases, benefiting various market participants operating with prices below a healthy level.

Market observers note that Original Equipment Manufacturers (OEM) and Original Design Manufacturers (ODM) are gearing up for the year-end shopping frenzy in Europe and the United States, as well as the shopping surge during the Lunar New Year in mainland China early next year. This renewed demand is expected to drive up the pricing of DRAM and NAND Flash memory components.

Even as market demand warms up, the industry expects that global memory manufacturers will not blindly increase production this year. The earliest potential resumption of expansion in production is anticipated to be towards the end of the first quarter or the beginning of the second quarter next year.

On the other hand, when production equipment becomes idle, it may take one to two months, at the very least, for it to rejoin the production line. Therefore, the increase in production capacity may not materialize until the end of the second quarter or the beginning of the third quarter. This means that supply for DRAM and NAND Flash memory will likely remain on a trajectory of "decrease-only," making it one of the primary drivers behind rising prices. It is estimated that NAND Flash average prices in the fourth quarter of this year are expected to remain stable or see a slight increase. Additionally, the DRAM market is expected to follow suit with price increases, beginning next year, as a result of controlled production outputs by memory manufacturers.