The prices for general-purpose DRAM and NAND flash chips have remained flat for four consecutive months, suggesting a slower-than-expected pace of demand recovery.
According to South Korean media Newsis, the prices of general DRAM and NAND flash products, which had increased for four consecutive months until January 2024, have since plateaued. After a slight increase in April, they have stayed flat.
Industry insiders attributed this price stagnation to a slower-than-expected recovery in the Chinese economy. Despite expectations that DRAM and NAND prices would rise in line with improving market conditions in the second half of 2024, the sluggishness in the Chinese market is likely to hold back prices.
China now dominates 60-70% of global electronics production. However, a recent slump in demand for major electronic devices such as computers, TVs, and smartphones has hindered inventory depletion of commodity DRAM and NAND flash chips at downstream manufacturers, slowing down price increases.
As China currently absorbs 37% of South Korea's total semiconductor exports, a sluggish Chinese market is bound to impact South Korea's memory industry, a major export sector for the country. Additionally, the current global economic downturn and the resultant increase in demand for budget PCs have also caused the profit performance of general-purpose memory to fall short of expectations.
Market observers noted that the improvement in market demand for smartphones and other devices in the second half of 2024 will be less than 10%, limiting the room for memory chip price growth. However, due to active production cuts by major players such as Samsung Electronics and SK Hynix in 2023, prices are unlikely to fall.
Some analysts also believe that overall memory chip prices are likely to rise in the second half of 2024 due to the industry's focus on producing High Bandwidth Memory (HBM) and the rising demand for storage devices driven by the AI boom.
