Over the past few months, we have seen a continuous decline in the spot price of DRAM and NAND flash memory. Although each price drop has been small, they have been consistent. And now, it seems that the price of DRAM and NAND is continuing its downward trend in the spot market, as there has been yet another decrease in the spot price.
It comes at an interesting time as CNBC recently reported that there may be a memory shortage on the horizon – which would likely see prices of both DRAM and NAND increase.
DRAM and NAND prices continue to decline
TrendForce has been continuously reporting on the spot prices of DRAM and NAND flash memory. Back in April, the price of DRAM in the Spot Market fell by 0.26%, from $1.921 to $1.916. In May, the price dipped further by 0.42% to $1.909. This month has been no different, as the price further fell to $1.881. And now, there has been another decline in the same month, as the spot price for DRAM has fallen by 2.54%, which has reduced the price to $1.835. As for NAND, its price has dropped by 0.57% and is currently at $3.309. For comparison, the price of NAND in the Spot Market was $3.764 just two months ago.
Various factors are contributing to the decline in price. For instance, module houses (companies that buy memory in bulk) are currently sitting on excess inventory, something that has reduced the demand as they don’t really need more of it at the moment. On top of that, the Chinese government has also been recently cracking down on smuggling activities in the spot market. This has taken a hit on the prices of reballed DRAM chips.
Considering how things are at the moment, this downward trajectory is expected to continue in the near future, with no signs of a significant price hike on the horizon. However, it is important to keep in mind that this only applies to the spot market and does not affect contract prices, which are negotiated between manufacturers and major clients.
Will we see an increase in the price?
While TrendForce’s latest report indicates that the prices of memory aren’t going to increase anytime soon, a report from Morgan Stanley suggests something different. According to the report, the memory market is expected to experience a ‘supply shock,’ leading to an 11% supply shortage in the HBM market and a 23% shortage in the DRAM industry by 2025. This is mainly due to the massive demand for AI accelerators, which use HBM memory as one of their primary components. The report further mentions that “server DRAM and ultra-high-density QLC solid-state drives will lead this price increase trend.” So, while the current decline in memory prices in the spot market doesn’t indicate an increase, things could change drastically once shortage issues surface.
