DRAM and NAND market trends are driving spot prices lower, although contract prices could rise due to strong demand from chipmakers.
Memory prices
Drop in DRAM and NAND costs
According to a recent TrendForce report, spot prices for DRAM and NAND memory will probably not increase, but on the contrary, may decrease. The reason for this is the excess inventory on the market, as well as the fight by the Chinese authorities against the smuggling of recovered memory, which has a noticeable impact on pricing.
Spot DRAM prices continue to fall in contrast to contract prices. A weak consumer market is driving prices down as hardware manufacturers don't need more memory than they already have. Another major factor contributing to the decline is the crackdown on smuggling in the Chinese market, which has led to further decline in prices for remanufactured DRAM chips.
Since the end of May, the average spot price of a DDR4 1Gx8 2666 MT/s chip has decreased by 2.54%, falling from $1,881 to $1,835 in the past week alone. Although the decrease may seem small, it is permanent.
NAND Market Situation
The spot market for NAND flash memory has seen a decline in activity due to sufficient inventory levels at SSD manufacturers, which is preventing demand from recovering despite to reduce prices by spot suppliers. This has already led to a long-term discrepancy between spot and contract prices. Additionally, there is uncertainty regarding potential replenishment demand in the third quarter of 2024. The spot price of a 512Gb 3D TLC NAND wafer fell 0.57% this week to $3,309.
Kioxia's plans and consequences
Kioxia recently stopped cutting production of its 3D NAND memory and plans to increase production to increase market share. This move alone could have major implications for the supply and price of 3D NAND. TrendForce does not expect prices to rise again in the short term.
TSMC Price Increase
TrendForce also reports that due to costs associated with Overseas expansion, rising electricity prices and strong demand, TSMC plans to raise prices for its advanced process technologies. Production of 3 nm chips may rise in price by 5%.
TSMC N5, N4 (5 nm and 4 nm) and N3 (3 nm) process lines are running at full capacity. They are used to create virtually all leading AI, HPC, personal computer and smartphone processors, which sell at high prices. The contract chipmaker's capacity utilization is expected to exceed 100% in the second half of the year, with strong demand forecast to continue through 2025.
Demand for TSMC N3 chips is extremely high, with production fully booked by major customers including Apple (for M4 and SM18 chips) and NVIDIA until 2026. As a result, next year TSMC plans to increase the cost of N3 by 5%, and prices for advanced packaging by 10-20%. As a major supplier of 3nm process technology, TSMC may increase prices to expand production and because the market allows it.
NVIDIA will likely pass on the increased costs to its partners or end users. While a 5% price increase for video cards may not seem like much, it's still tens of dollars for high-end models. Since everyone in the supply chain wants added value, the price increase for end customers can be significant.
Glossary
- TrendForce is an analytical company specializing in semiconductor market research.
- DRAM (Dynamic Random Access Memory) - dynamic random access memory used in computers and other electronic devices.
- NAND is a type of flash memory used in solid-state drives (SSDs) and other storage devices.
- TSMC (Taiwan Semiconductor Manufacturing Company) is a Taiwanese company, the world's largest contract manufacturer of semiconductor chips.
- NVIDIA is an American company, a developer of graphics processors and systems on a chip for gaming devices, personal computers and servers.
Links
- Insights - Memory Spot Price Update: High Inventory and China's Crackdown on Smuggling Cause DRAM Spot Price to Drop
- TSMC to Raise Prices for Advanced Node Manufacturing in 2024 Due to High Capex and Power Costs
- NAND and DRAM Prices Dropping in Spot Market, Continuing Downward Trend
Questions answered
What are the prices for DRAM and NAND memory in the near future?
What factors are driving DRAM prices down?
How is the NAND memory spot market doing?
How will TSMC price its advanced process technology?
How could TSMC's price increase affect the cost of video cards?
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Discussion of the topic – Prices for DRAM and NAND memory will decrease, and video cards and processors will rise in price by 5-20%
According to a TrendForce report, prices for DRAM and NAND memory can be expected to drop in the near future, while graphics cards and processors could rise in price by 5-20%.
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Günther
I think this is good news for consumers. Reducing memory prices will allow manufacturers to reduce prices for finished products. 🤑
Grzegorz
Yes, but this could have a negative impact on memory chip manufacturers. They will have to find ways to reduce costs to maintain profits. 🧐
Пётр
But this will spur innovation in the industry! They will have to introduce more efficient production technologies. 💡 And consumers win.
Антонио
Don't forget that the Chinese market plays a big role. The fight against smuggling there has a serious impact on prices. 🇨🇳
Филипп
In any case, this is a temporary phenomenon. When supplies are depleted, prices will go up again. 💰 Such cycles are common in this industry.
Иван
Phew, again it’s all about money and prices! 😒 What about technical progress? New memory technologies, increased capacity and speed - that's what's really important!
Франсуа
I agree with you, Ivan! 3D NAND, TSMC's 3 nm process technology is where the real breakthroughs happen. 🔬 Prices are secondary compared to such technical improvement.
Марио
Let's not forget about the environmental component. Memory production is very energy intensive. 💚 It would be great if manufacturers introduced greener technologies along with innovation.