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Recently, a trend that is disappointing for consumers has emerged in the DRAM and NAND memory markets to rising prices, which already directly affects the price of end devices (SSD and RAM for mobile gadgets and computers). It is likely that this trend will only intensify in the future.
DigiTimes reports that Taiwan's April 3 earthquake, the strongest in 25 years, caused some damage to local semiconductor factories, severely disrupting the supply chains of leading manufacturers Micron, Samsung Electronics and SK Hynix. This could cause prices to rise more than expected, especially as the industry attempts to recover from recent years of losses due to higher prices.
And while in the past memory prices have typically skyrocketed following production disruptions caused by natural or man-made disasters, the current situation opens the door for suppliers to offset losses in 2022 and 2023. Before the earthquake, the growth rate of contract prices for DRAM and NAND memory slowed down compared to the first quarter. In particular, for NAND the growth was 15%-20% versus 20+% in the first quarter. Now it is likely that price growth will accelerate.
It is reported that major players have stopped publishing contract prices for DRAM, preparing for a review of pricing policies. And after the earthquake, Micron began discussing with customers a new product delivery schedule and possible delays. Yes, for now this is all unofficial information from insiders, but given the circumstances, it looks plausible.
Memory module manufacturers, who currently have limited supplies, are preparing for increased costs for purchasing chips. They had hoped the rising price trend would slow, but suppliers cut production significantly last year to push up prices amid stagnant demand. New circumstances will likely prompt customers, especially server manufacturers, to actively buy up memory in anticipation of a likely shortage, which, in turn, will push prices even higher.
If this is true, then this will hit server manufacturers the hardest, but the segment of consumer solid-state drives, where price increases have been observed over the past few months, will also not be spared by the new wave.
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