15 Apr 2024 -

Memory price hikes loom after Taiwan quake

server DRAM

The recent earthquake in Taiwan continues to be felt throughout the electronics industry, especially the memory market. Major manufacturers like Micron, Samsung Electronics, and SK Hynix have halted publishing contract DRAM prices, a move that signals further price increases are on the horizon. This disruption comes as the industry was already poised for price adjustments to stem ongoing losses.

The fallout from the quake is significant. “Industry insiders revealed that these leading memory chip manufacturers had already initiated measures to maintain a rising trend in their product prices,” reports DigiTimes. The natural disaster provides an opportunity to accelerate this trend and recoup losses incurred in recent years.

Electronics engineers and purchasers should brace for the impact. Prior to the earthquake, price increases for DRAM and NAND flash were anticipated to be more modest for Q2. Now, the supply disruption caused by wafer fab shutdowns could lead to sharper hikes than initially projected.

Memory module manufacturers with low chip inventories may feel the squeeze most acutely. While hopes were pinned on a slowdown in the rising price trend, memory suppliers had strategically reduced production during last year’s demand slump. This, coupled with potential stockpiling by downstream customers anticipating shortages, could further exacerbate the price pressure.

Industry dynamics add a layer of complexity. Despite the anticipated price crunch in the contract market, DigiTimes notes the spot market remains weak due to low consumer demand post-Lunar New Year. This oversupply in the spot market creates an unusual juxtaposition likely to lead to further market volatility.

The earthquake highlights the delicate balance of the memory chip market and the electronics industry’s reliance on a stable supply chain. Price fluctuations and potential shortages are likely to be felt throughout the sector, underscoring the need for contingency planning and diversification strategies in the face of unforeseen disruptions.

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