The rally continues, and DRAM contract prices are expected to rise 13-18% in the first quarter of 2024.

Jessie January 08, 2024

TrendForce Consulting said that DRAM contract prices in the first quarter of 2024 rose by about 13 to 18 percent on a quarterly basis, with Mobile DRAM continuing to lead the way. At present, because the demand outlook for the whole year of 2024 is still unclear, the original factory believes that continuous production reduction is still necessary to maintain the supply and demand balance of the memory industry.

PC DRAM, due to the DDR5 order demand has not been met, while buyers expect DDR4 prices will continue to rise, driving buyers to continue to pull momentum, but by the gradual upgrade of the machine to DDR5 impact, the DDR4 bit purchase volume will not necessarily expand. However, since the price of DDR4 and DDR5 has not reached the original factory target, and the buyer can still accept the increase in the first quarter, it is estimated that the overall PC DRAM contract price will increase by about 10 to 15%, of which DDR5 will increase slightly higher than DDR4.

In terms of Server DRAM, due to the buyer's emphasis on accelerating DDR4 de-mineralization last year, the DDR5 inventory proportion in the fourth quarter of 2023 has risen to about 40%, compared with the market penetration rate of 20-25%, which clearly shows that the market demand is still not fully realized. However, the original manufacturer continued to limit DDR4 supply, while significantly increasing DDR5 output to improve profitability, resulting in Server DRAM contract price increases of 10 to 15 percent in the first quarter of 2024. Only some original manufacturers negotiated prices earlier, making the contract price benchmark higher in the fourth quarter of last year, so some companies in the first quarter of 2024 price increases of about 8 to 13%.

In terms of Mobile DRAM, as the contract price is still at a relatively low historical level, buyers are more inclined to continue to establish a safe and relatively low inventory level, so they continue to amplify the purchase demand, so the demand for Mobile DRAM in the first quarter is not reduced. Due to the buyer's active procurement, supply and demand have become tight, but due to the subsequent uncertainty of the smartphone market, the original factory does not dare to rush to resume full production. On the other hand, the semiconductor process takes a long time, and the tight supply and demand situation is difficult to ease in the short term, which will pull up the price of the original factory. Therefore, it is estimated that the quarterly price increase of Mobile DRAM contract in the first quarter is about 18-23%, and it is not ruled out that the quarterly increase is possible to expand in the case of oligopoly market pattern or panic price chasing by brand customers.

Graphics DRAM, due to the continuation of the rising atmosphere, buyers also continue to stock, so the mainstream specification GDDR6 16Gb demand is still strong, procurement mentality is generally willing to accept the rise, the first quarter Graphics DRAM contract price increase of about 10 to 15%. TrendForce consulting observed that Graphics DRAM has no signs of price decline in the short term, and the current momentum of pulling goods is mainly driven by buyers' advance stocking, plus Graphics DRAM belongs to the shallow market products, so it is necessary to pay special attention to whether the sales momentum of subsequent terminal consumer electronics products can keep up.

In terms of Consumer DRAM, the original factory strongly pulled up the contract price, prompting buyers to stock up in advance, and the momentum of pulling goods improved. However, the first quarter coincided with a low season for the industry, and it is expected that inventories will rise due to the advance stocking strategy of buyers in the face of weak terminal sales. The original factory generally believes that in 2024, due to the expansion of HBM and DDR5 penetration, low-margin DDR4 production capacity will be crowded out and form a shortage, so the DDR4 contract price in the first quarter will increase by about 10 to 15% compared with DDR3. DDR3 manufacturers continue to supply, and the general inventory level is still high, the first quarter contract price rose about 8 to 13 percent.

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