AI Boom Drives Memory Market, SanDisk Plans 10% Price Hike

The memory semiconductor market is undergoing a major transformation, fueled by the resurgence of demand for IT devices like smartphones and personal computers. This recovery has led to rising prices for key components such as DRAM and NAND flash memory, reversing the oversupply and price declines seen last year. This shift can largely be attributed to the global artificial intelligence (AI) boom and improved economic conditions, which have reignited consumer interest in high-performance semiconductors.

Last year, the semiconductor industry found itself in a tough spot. While there was strong demand for high-performance semiconductors, such as High Bandwidth Memory (HBM) for AI servers, an oversupply of general-purpose memory used in personal computers and smartphones was caused by the economic slowdown and reduced consumer spending. This led to nearly a 30% drop in NAND flash memory prices during October and November. However, signs of market recovery began to emerge early this year, with the fixed trading price of 128Gb Multi-Level Cell (MLC) NAND flash memory rising to $2.18 in January and $2.29 in February.

According to data from DRAMeXchange on March 13, the spot price for general-purpose DRAM DDR4 8Gb products reached $1466, marking a five-day consecutive increase since March 7. Similarly, the spot price for 16Gb DDR5 products rose by over 6% in March 12 compared to the previous month, reaching $5068. This upward trend is expected to continue, with SanDisk planning a price hike of more than 10% on April 1, driven by expectations that demand will soon surpass supply.

Forecasts from U.S. market research firm Gartner also support this outlook, projecting that the AI computer market will surge by 165.5% this year, reaching 114.22 million units, up from 43.02 million units last year. This growth is expected to drive demand for memory semiconductors, and if prices continue to rise, leading companies like Samsung Electronics and SK Hynix may consider expanding production of general-purpose products.

Samsung Securities analyst Lee Jong-uk commented, "There is also a possibility of a price increase for Low Power DRAM (LPDDR5) in the second quarter, following the rise in DDR5 prices. It is expected that the sentiment around general-purpose products will shift from a pessimistic to a more optimistic outlook in the second quarter."