DRAM and NAND Prices Set to Rise in 2021 as Suppliers Regulate Production

In a recent analysis by TrendForce, it has been revealed that the downward trend of DRAM contract prices, which persisted for eight consecutive quarters since 4Q21, has finally been reversed in 4Q23. Similarly, NAND Flash has rebounded in 3Q23 after four quarters of decline. The future of memory prices in 2024 will largely depend on suppliers’ ability to effectively control their capacity utilization rates.

According to Avril Wu, Senior Research Vice President at TrendForce, the first quarter of this year is already showing signs of growth, aligning with TrendForce’s initial projections. DRAM contract prices are expected to increase by around 13-18% QoQ, while NAND Flash contract prices are projected to rise by 18-23%. Despite a conservative outlook for overall market demand in 2Q24, suppliers in both the DRAM and NAND Flash markets have started increasing their capacity utilization rates since the end of 4Q23. Additionally, NAND Flash buyers are anticipated to complete their inventory restocking in advance during 1Q24. These factors contribute to a more moderate QoQ price increase of 3-8% for both DRAM and NAND Flash contract prices in 2Q24.

Looking ahead to 3Q24, the traditional peak season will bring increased activity from North American CSPs in restocking key components. This could lead to further price increases, with DRAM and NAND Flash contract prices potentially climbing by 8-13% QoQ, as long as suppliers do not operate at full capacity. In the DRAM market, the rising penetration rates of DDR5 and HBM technologies will drive up the overall average selling price (ASP), resulting in a wider QoQ increase in contract prices.

In 4Q24, the general price rally is expected to continue if suppliers maintain effective output control strategies. DRAM contract prices are forecasted to increase by approximately 8-13% QoQ. However, it should be noted that the increase in DRAM contract prices will primarily be driven by the growing market penetration of DDR5 and HBM products. Individual products or product types, such as DDR5, may experience QoQ declines. Therefore, the overall rally in DRAM contract prices throughout 2024 reflects changes in the product mix rather than a universal increase for all types of DRAM chips. As for NAND Flash products, their contract prices are predicted to rise by 0-5% QoQ in 4Q24.

Technology Explained

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DDR5: DDR5 (Double Data Rate 5) is the next generation of memory technology for the computer industry. It is a modern day improvement on earlier DDR technologies, with faster speeds, greater bandwidth and higher capacities. DDR5 enables higher resolution, seamless gaming experiences and faster data transfer rates, making it an ideal choice for high-performance computing and 4K gaming. With its greater RAM compatibility, DDR5 provides faster buffering times and raised clock speeds, giving users an improved overall work system. DDR5 is also optimized for multi-tasking, allowing users to multitask without experiencing a significant drop in performance, increasing the productivity of digital tasks. As an ever-evolving technology, DDR5 is paving the way for the computer industry into a new and powerful era.

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NAND: NAND technology is a type of non-volatile memory that is used in many computer applications. It is a type of flash memory that is used to store data in a non-volatile manner, meaning that the data is not lost when the power is turned off. NAND technology is used in many computer applications, such as solid-state drives, USB flash drives, digital cameras, and memory cards. It is also used in many embedded systems, such as cell phones, tablets, and other consumer electronics. NAND technology is a reliable and cost-effective way to store data, making it a popular choice for many computer applications.