10 Jan 2024 -

DRAM price hikes: Temporary blip or new normal?

There’s rumours in the market about an upward trend in DRAM prices. Analysts at TrendForce estimate a jump of 13-18% in contract prices, a significant shift from the recent downward trend.

This potential price hike stems from a confluence of factors. On the one hand, demand for DRAM is expected to rise, driven by factors like the ongoing boom in the PC market and the increasing adoption of AI and 5G technologies. As TrendForce notes, “rising demand for servers and high-performance computing applications is also contributing to the expected price increase.”

On the other hand, supply remains constrained. Major DRAM manufacturers like Samsung and Micron are reportedly planning production cuts or delays due to various factors like the ongoing shift towards more advanced production processes. This limited supply, coupled with increasing demand, creates a classic recipe for price rises.

However, the extent and duration of this price hike remain uncertain. Nanya Technology, another major DRAM player, expresses “optimism about the DRAM market” in the second half of 2024, suggesting a potential return to normalcy later in the year. Analysts at TrendForce echo this sentiment, noting that “the price increase is expected to be temporary, with prices likely to stabilize or even decline in the second half of the year.”

This potential price volatility presents both challenges and opportunities for the electronics industry. Consumers might face higher prices for memory-intensive devices in the short term. However, for manufacturers and distributors, this could be an opportunity to adjust their pricing strategies and inventory levels to navigate the changing market dynamics.

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