DRAM, NAND Prices Surge: 2.5-Year First Rise Confirmed

Industry data reveals a discernible shift in the semiconductor landscape, attributed to production cuts by major manufacturers such as Samsung and Micron. This, coupled with the effective absorption of excess inventory, confirms an upward trajectory in the prices of semiconductor storage chips. Noteworthy is the fact that the price of a representative DRAM has seen its first increase in two and a half years.

Within the DRAM product category, the bulk transaction price for the representative DDR4 8Gb product in November hovers around $1.65 per chip. This reflects an 11% increase compared to October, marking the first uptick since June 2021. Turning to the NAND product category, the representative TLC product of 256Gb is priced at approximately $1.85 per chip from October to December 2023. This indicates a 12% increase from the previous quarter, marking the first such increase in nine quarters.

The report underscores that due to subdued demand for PCs and smartphones, key storage chip manufacturers such as Samsung, Micron, SK Hynix, and Kioxia have strategically implemented production cuts since the latter half of 2022 in a concerted effort to stabilize prices. A prominent Japanese electronic product trading company has noted that the alleviation of the "overstock situation of storage chips" is underway, with the effects of production cuts becoming increasingly evident.

Buyers of DRAM and NAND, prioritizing stable procurement, find themselves amenable to accepting price increases. A spokesperson from a leading PC manufacturer shared insights, stating that due to assertions by storage chip manufacturers that "if prices remain at a low level, they will not ship," the industry is compelled to embrace a measured degree of price adjustment.

It is pertinent to note that the semiconductor industry traditionally experiences a cyclic phenomenon known as the "Silicon Cycle," characterized by alternating periods of prosperity and downturns, occurring approximately every 3 to 4 years. Presently, industry sentiment aligns with the belief that 2023 marks the bottom of the cycle, with anticipated improvements in 2024.

TrendForce, a reputable industry analyst, forecasts that prices of mobile device DRAM and NAND (eMMC, UFS) storage chips will continue their upward trajectory. The first quarter of 2024 is anticipated to witness a quarter-on-quarter price increase ranging between 18% to 23%, according to their recent projections.