DRAM Price Surge: Samsung, Micron Up 20% in Q1 2024

As per statements from insiders at a storage module company, major players in the memory chip industry, including Samsung Electronics and Micron Technology, are deliberating a potential 15%-20% increase in DRAM prices during the first quarter of 2024.

Despite the recent rebound in NAND chip prices, prevailing quotations still demonstrate a substantial variance compared to suppliers such as Samsung, Kioxia, SK Hynix, and Micron, achieving a breakeven point. The ongoing ascent in NAND chip prices marks the preliminary phase of price adjustments, with the subsequent surge anticipated to reach up to 50%, characterized as a "significant price increase."

In contrast to the soaring NAND flash prices, DRAM pricing remained relatively stable in the fourth quarter of 2023. However, industry insiders suggest that memory chip manufacturers are contemplating prioritizing DDR4 and DDR5 DRAM in the forthcoming round of price adjustments to accelerate profit recovery.

Certain storage module manufacturers have reportedly received notifications from Samsung regarding a minimum 15% increase in DRAM prices during the first quarter of 2024. While Samsung did not specify NAND flash pricing, an upward trend in NAND prices is expected to persist. In December 2023, DRAM prices witnessed a 2%-3% increase, substantially elevating DRAM prices but still falling short of the approximately 10% increase observed in 3D TLC NAND during the same month.

As demand for smartphones and servers gradually improves, a tightening of DRAM supply is expected. Memory chip manufacturers are currently inclined to raise DDR4 and DDR5 prices in the first half of 2024, with DDR3 production and prices anticipated to remain relatively stable.

Insiders suggest that storage module manufacturers have been strategically acquiring inventory at lower prices in recent months, and Samsung is expected to lead the upcoming round of DRAM price adjustments.

Korean DRAM suppliers have reduced the utilization rate of DRAM in the second half of 2023. Samsung's DRAM production in the fourth quarter of 2023 was only about 70% of the first quarter of the same year, with reports indicating an increase in the proportion of advanced manufacturing process output. DRAM production is expected to remain tightly controlled in the first quarter of 2024. Chip suppliers are increasingly relying on advanced nodes while reducing output from mature processes.

The leading three DRAM chip manufacturers previously employed 1X nm or 1Y nm processes for DDR4. However, in 2023, Samsung transitioned its 8Gb and 16Gb products to the 1Z nm process, while Micron shifted its DDR4 production to the 1α nm process. Memory chip manufacturers have also transitioned from the 1α node for 16Gb DDR5 to the 1β node.

In the fourth quarter of 2023, both DRAM and NAND did not experience a supply shortage, indicating that the recovery of end-market demand is yet to occur, and the outlook is expected to be conservative until before the February Lunar New Year.