Industry: Commodity DRAM to Face Supply Shortage

In recent developments within the semiconductor storage sector, there are indications of an impending shortage of commodity DRAM chips. This trend arises as investments in High Bandwidth Memory (HBM) DRAM intensify, contrasting sharply with the robust production of NAND flash memory.

Reports highlight that major manufacturers such as Samsung and SK Hynix are currently operating their commodity DRAM production facilities at utilization rates ranging from 80% to 90%. However, the capacity for commodity DRAM has seen only a modest increase of approximately 10% since the beginning of 2024.

Commodity DRAM, essential for smartphones and personal computers (PCs), faces increased demand driven by the rising need for enterprise solid-state drives (eSSDs) amidst the widespread adoption of artificial intelligence (AI). Consequently, manufacturers like Samsung and SK Hynix are maximizing their NAND production lines to meet market demands. Additionally, favorable market conditions have enabled Kioxia to restore NAND production capacity utilization to 100% by ceasing production cuts as of June.

Despite the primary role of the server market in driving DRAM demand, reductions in AI infrastructure investments by global cloud computing and technology firms have tempered overall DRAM demand recovery expectations. Analysts foresee a modest growth outlook of 2% to 3% for the smartphone, PC, and server markets throughout 2024, influenced by extended device replacement cycles.

Experts in the field suggest the potential for a resurgence in commodity DRAM demand contingent upon the wider integration of AI capabilities across consumer devices. Notably, manufacturers are actively exploring AI-enabled concepts in PCs and smartphones. However, the impact of these advancements on the commodity DRAM market remains uncertain and warrants ongoing monitoring.