Based on TrendForce’s weekly memory spot price trends released every Wednesday, due to the year-end holiday period, the spot market for DRAM and NAND Flash experiences light trading, and prices remain relatively stable. For details, please refer to the information below:

DRAM Spot Market:

Due to the year-end holiday period, the spot market has been quiet recently and showed no notable price fluctuations. The spot market is also relatively unaffected by smartphone brands’ restocking activities, so the overall sentiment is fairly conservative. Some spot sellers have begun to raise quotes for DRAM chips since January 2, but the demand quantities are insufficient to push up transaction prices. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) rose by 2.54% from US$1.773 last week to US$1.818 this week.

NAND Flash Spot Market:

Transactions have been rather sluggish from the spot market amidst the holiday period, with no apparent price fluctuations. The spot market is not as affected by the recent stock-up demand for smartphones and SSD, and has been relatively conservative in general sentiment, where the lack of demand is insufficient in pulling up concluded prices even with the aggressive ramp up of wafer quotations among several sellers since the beginning of the year. 512Gb TLC wafer has dropped by 0.29% in spot prices, arriving at US$3.117.

SK Hynix CEO Kwak Noh-Jung expressed optimism at the Consumer Electronics Show (CES) in the United States, stating that artificial intelligence (AI) chips would propel SK Hynix’s market value to double within three years, reaching KRW 200 trillion (approximately USD 152 billion).

Kwak also revealed plans to adjust the DRAM production reduction policy in the first quarter, while anticipating changes in NAND Flash production strategy in the latter half of the year.

At the CES exhibition in Las Vegas, Kwak emphasized that generative AI is gradually becoming widespread, and memories are increasingly crucial. With the advancement of AI systems, customer demands for memory will become more diverse. Kwak highlighted the development of a platform to offer customized options for various customers.

“If we prepare the products we are currently producing well, pay attention to maximising investment efficiency and maintaining financial soundness, I think we can attempt to double the current market capitalisation of 100 trillion won to 200 trillion won within three years,” Kwak said.

Kwak further stated in the CES: “There are only three HBM providers in the market. What I can say for sure is that SK Hynix is a clear leader in the HBM space.”

For the current HBM market, as reported by TrendForce earlier, SK hynix holds the lead in HBM3 production, serving as the principal supplier for NVIDIA’s server GPUs.

Samsung, on the other hand, is focusing on satisfying orders from other CSPs. The gap in market share between Samsung and SK hynix is expected to narrow significantly in 2023 due to an increasing number of orders for Samsung from CSPs. Both firms are predicted to command similar shares in the HBM market sometime between 2023 to 2024—collectively occupying around 95%.

Meanwhile, when asked if SK Hynix would ease its current chip production reduction policy, Kwak responded that the company’s policies are flexible and will be adjusted based on different product categories.

He mentioned that SK Hynix might change its DRAM production reduction policy in the first quarter, while adjustments for NAND Flash are anticipated to take place in the latter half of the year.

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(Photo credit: SK Hynix)

Global memory giants continue to reduce production, coupled with the situation where market demand is increasing due to the rise in artificial intelligence and high-performance computing applications, as well as inventory replenishment from the smartphone market. This combination is driving a continuous increase in memory prices, especially the astonishing surge in NAND Flash.

According to a report from TechNews, there are once again rumors in the market today that the upward trend in DRAM prices is resurfacing. This includes plans from both Samsung and Micron to implement a price increase ranging from 15% to 20% in the first quarter of 2024.

Currently, the market anticipates tight DRAM supply in 2024 due to the increasing adoption of artificial intelligence and high-performance computing, along with a gradual recovery in the smartphone and PC markets. As the contract price negotiation for the first quarter is underway, industry sources reveal that memory manufacturers have begun adjusting DRAM prices since January, urging customers to plan for future usage demands.

There are reports in the market that Samsung recently announced that DRAM prices will increase by at least 15% starting in the first quarter of 2024. While there is no clear indication of the NAND Flash memory price hike at the moment, it is expected to continue to rise. The upward trend in DRAM prices is expected to persist until the end of 2024.

Apart from Samsung, Micron, with a modest 2-3% increase in DRAM prices in December 2023, lower than the 10% increase in 3D TLC NAND, is reportedly considering a DRAM price hike of around 15-20%.

Regarding the price trend of DRAM in the first quarter of 2024, TrendForce currently maintains a forecast of a seasonally increased average of 13-18%, with the highest increase observed in the mobile DRAM category, while server DRAM appears relatively conservative. According to TrendForce’s observation, due to the uncertain demand outlook for the entire year 2024, memory manufacturers believe that a continued reduction in production is necessary to maintain the supply-demand balance in the memory industry.

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• Market Anticipates a 50% Price Surge for NAND Flash in Short-Term

(Image: Samsung )

The ongoing reduction in production by major manufacturers throughout this year has gradually restored balance to the market supply and demand. This is beneficial for chip manufacturers to regain control over prices. Signs of a bottoming out and rebound have emerged in the memory market in the third quarter of this year.

TrendForce data reveals that the overall price of DRAM has been declining since 4Q21 and only began to rebound in 4Q23, marking a total decline over 8 quarters. As for NAND Flash, the overall price started declining from 3Q22 and began to rebound from 3Q23, totaling a decline over 4 quarters.

However, despite the recovery in demand, achieving effective destocking and returning to a state of supply-demand equilibrium next year still heavily relies on suppliers exercising restraint in production capacity. If suppliers can control production capacity appropriately, there is a chance for the average memory prices to continue their rebound.

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• [News] Market Anticipates a 50% Price Surge for NAND Flash in Short-Term
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(Photo credit: Samsung)

After a rebound from the decline in NAND prices, the current quotations still show a gap from reaching the breakeven point for suppliers such as Samsung, Kioxia, SK Hynix, and Micron.

Major domestic players in the NAND Flash industry indicate that NAND Flash suppliers, driven by the goal of profitability, will continue to aggressively raise prices. It is anticipated that prices will need to increase by over 40% once again for major manufacturers to break even. To achieve profitability, future price hikes are expected to be at least 50% or even higher, according to Economic Daily News.

Looking at the global NAND Flash market share in 3Q23, according to a report from TrendForce, Samsung holds the leading position with a market share of 31.4%. The second position is held by the SK group, with a market share of 20.2%, followed by the U.S.-based Western Digital at third place with a market share of 16.9%. The Japanese company, Kioxia ranks fourth with a market share of approximately 14.5%.

The industry indicates that due to the lower profitability of NAND Flash compared to DRAM, international giants are actively reducing NAND Flash production.

Taking Samsung as an example, since September of this year, the reduction in NAND chip production has expanded to 50% of total capacity, focusing on products with stacked layers up to 128 layers. The goal is to accelerate destocking and stabilize prices, with plans to gradually increase prices in 2024.

TrendForce has indicated that following Samsung’s expansion of the production reduction to 50%, other suppliers are also maintaining a restrained wafer allocation strategy. After more than half a year of production reduction in some processes and capacities, there is a structural supply shortage, providing an advantage for chip manufacturers in price control. Observing the market in the fourth quarter, there are almost no low-priced sources available for purchase. However, buyers still tend to maintain high inventory levels and continue purchasing.

Industry sources revealed that the NAND chip prices had plummeted too deeply before. Although the quarterly increase in contract prices seems substantial, there is still a distance for chip manufacturers to achieve a turnaround. It is expected that prices need to increase by another 40% to allow suppliers to cross the breakeven point. Therefore, prices are expected to be quite strong in the coming quarters.

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(Photo credit: Samsung)