Since the beginning of this year, prices for RAM chips have already been rising with varying degrees of success after last year's overstocking, and the earthquake in Taiwan in early April gave them an additional incentive. As a result, contract prices for DRAM will increase in the second quarter by 20 or 25%, according to TrendForce experts.
Image Source: Samsung Electronics
The growing demand for RAM has already forced South Korean manufacturers to raise prices; in May alone, DDR5 chips will rise in price by 13%, and DDR4 by about 10%. For Taiwanese suppliers, who mainly make money from the production of DDR3 chips, there is an opportunity to raise prices for their products by 10-15%. In general, according to the source, contract prices for DRAM in the second quarter will increase by 20-25%.
The earthquake, which peaked on April 3 of this year off the east coast of Taiwan, caused limited damage to local memory production facilities. In fact, by April 8, the main enterprises Micron, Nanya and Winbond had already completely restored the production of memory chips in Taiwan, and in the case of Micron and PSMC at individual sites, productivity by that time had reached 80-90% of the maximum. According to TrendForce estimates, the April earthquake reduced DRAM output in Taiwan by 1% for the entire second quarter.
However, this did not stop Micron from raising prices for DRAM and SSD by 25% based on an assessment of the damage and the market situation as a whole. Samsung stopped production of DDR3 ahead of schedule, which is why many buyers of this type of memory were forced to turn to Nanya and Winbond for additional orders, and they eventually raised prices for the second quarter by 10–15%. The transition to the production of more modern types of memory aggravates the shortage of old ones and contributes to rising prices. By the second half of the year, demand will outstrip supply by 20–30%, according to TrendForce representatives. Now DDR3 manufacturers are forced to sell memory at a price below cost, and in the second half of the year prices may rise by 50 or even 100%. This situation will be beneficial for Taiwanese memory manufacturers.
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