The latest report TrendForce shows that spot prices for memory DRAM and NAND are unlikely to rise in price — on the contrary, conditions may develop for a price reduction. First, there is a large stock on the market. Second, as it turned out, the Chinese government’s actions to combat smuggling of refurbished memory have a significant impact on the price of memory.
DRAM spot prices continue to fall, in contrast to contract prices. Weak consumer goods markets are contributing to the price decline, as hardware manufacturers do not need more memory than they already have Another important factor contributing to the decline is the crackdown on smuggling in the Chinese market, which has led to a further drop in prices for reballed DRAM chips.
Since the end of May, the average spot price of a 1Gx8 2666 MT/s DDR4 chip has dropped by 2.54%, with a drop from $1,881 to $1,835 in the past week alone. While the decline may seem small, it is consistent.
The NAND flash spot market is experiencing a decline in transaction due to ample inventory levels at SSD manufacturers, which is preventing demand from recovering despite price cuts by spot suppliers. This has already resulted in a prolonged divergence between spot and contract prices. In addition, there is uncertainty about the potential demand for restocking in the third quarter of 2024. The spot price of a 512Gbit 3D TLC NAND wafer fell by 0.57% to $3,309 this week.
Kioxia has recently stopped cutting production of its 3D NAND memory and is set to ramp up production to increase market share. This move alone could have serious consequences for the supply and price of 3D NAND. TrendForce does not expect price growth to resume in the short term.
TrendForce also reportsTSMC is planning to raise prices for its advanced manufacturing processes due to the costs associated with overseas expansion and rising electricity prices, as well as high demand. The production of 3 nm chips may rise by 5%.
TSMC’s N5, N4 (5 nm and 4 nm) and N3 (3 nm) process lines are operating at full capacity. They are used to create almost all the leading artificial intelligence, HPC, personal computers, and smartphones, which are sold at a high price like hot cakes. The capacity utilization of the contract chipmaker is expected to exceed 100% in the second half of the year, and high demand is projected to continue until 2025, TrendForce expects.
Demand for TSMC N3 chips is extremely high, with production fully booked by major customers, including Apple (for M4 and SM18 chips) and NVIDIA by 2026. As a result, TSMC plans to raise N3 prices by 5% next year and advanced packaging prices by 10-20%. As the main supplier of the 3nm process, TSMC can raise prices to expand production and because the market allows it.
Likely, NVIDIA to pass on cost increases on their partners or end users. While a 5% increase in the price of a video card may not seem like much, it is tens of dollars for top-of-the-line graphics cards. Since everyone in the supply chain wants to add value, the price increase for end users can be significant.
Source: Tom`s Hardware