Taiwanese Earthquake’s Q2 Impact on DRAM Output Expected to be Insignificant

The recent Taiwan earthquake had a minimal impact on the country's DRAM production, with TrendForce estimating a 1% effect on Q2 production and DRAM industry operations resuming quickly.

Taiwan's robust earthquake preparedness measures have minimized the impact on the Taiwanese DRAM industry.
The DRAM producers in Taiwan quickly resumed full operations after the earthquake, with only a minor impact on production.
The DRAM industry has demonstrated resilience and is expected to recover quickly, with minimal disruptions and potential price increases expected to normalize quickly.

In the wake of the recent magnitude 7.2 earthquake in Taiwan, concerns arose regarding the impact on chip production in the country. However, according to research conducted by TrendForce, the production of DRAM is expected to remain largely unaffected. Despite being the strongest quake in the region in 25 years, Taiwan’s robust earthquake preparedness measures have played a significant role in minimizing the impact on the Taiwanese DRAM industry.

Taiwan is home to four major memory makers, including Micron, which is the only member of the “big three” memory manufacturers on the island and operates two fabs. The other players include Nanya, Winbond, and PSMC, each with their own fab or plant. The study revealed that these DRAM producers quickly resumed full operations after the earthquake, albeit with some discarded wafers. TrendForce estimates that the earthquake will have a minor effect on Q2 DRAM production, with a negligible 1% impact.

Interestingly, Micron is currently increasing its production of DRAM using advanced process technologies, which will positively impact the supply of commodity DRAM in Q2 2025.

Following the earthquake, there was a temporary halt in quotations for both the contract and spot DRAM markets. While spot market quotations have largely resumed, contract prices are yet to fully restart. Notably, Micron and Samsung halted issuing quotes for mobile DRAM immediately after the earthquake, with no updates provided as of April 8th. In contrast, SK hynix resumed quotations for smartphone customers on the same day and proposed more moderate price adjustments for Q2 mobile DRAM.

TrendForce predicts a seasonal contract price increase of 3% to 8% for Q2 mobile DRAM. This moderate increase can be attributed to SK hynix’s restrained pricing strategy, which is likely to influence pricing strategies across the industry. The earthquake’s impact on server DRAM primarily affected Micron’s advanced fabrication nodes, potentially leading to higher sale prices for Micron’s server DRAM. However, the direction of future prices remains uncertain.

It is worth noting that DRAM fabs outside of Taiwan, including Micron’s HBM production line in Hiroshima, Japan, and Samsung’s and SK hynix’s HBM lines in South Korea, have not been directly affected by the earthquake and continue to operate normally.

Overall, the DRAM industry has demonstrated resilience in the face of the earthquake, with minimal disruptions and a swift recovery. Abundant inventory levels for DDR4 and DDR5, coupled with weak demand, indicate that any slight price increases resulting from the earthquake are expected to normalize quickly. The only potential exception is DDR3, which is nearing the end of its commercial lifespan, leading to a decrease in production.

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Background Information

About Samsung: Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

About SK hynix: SK Hynix is a important South Korean semiconductor company known for its innovative contributions to the global technology landscape. Specializing in the production of memory solutions, SK Hynix has played a vital role in shaping the semiconductor industry. With a commitment to research and development, they have continuously pushed the boundaries of memory technology, resulting in products that power various devices and applications.

Technology Explained

DDR3: DDR3 (double data rate 3) is a type of computer transfer technology that is commonly used in modern computers. It is the successor to the original DDR and DDR2 technologies used to communicate data between the main memory and the CPU (central processing unit). It works by allowing two sets of information to be sent per clock 'tick', which helps to boost overall speed and efficiency. With DDR3, the computer industry has seen a significant increase in speed and performance. DDR3 is used in a variety of computer applications, from gaming to intense data processing and artificial intelligence tasks. It is used in PCs, laptops, and Macs, as well as in tablet technologies like the iPad. It also helps to provide better video streaming and signal data processing in networking. DDR3 is an essential and versatile technology in the modern computer industry.

DDR4: DDR4 is a generation of Double Data Rate (DDR) dynamic random access memory (RAM) technology. It is a type of RAM that utilizes a higher clock frequency and is more power-efficient than its predecessors. As a result, it is capable of processing data more quickly than other RAM in the computer industry. Its increased speed and power efficiency are beneficial for applications such as gaming, rendering, and machine learning. It is designed for high-performance computing and enables faster access to stored information, resulting in better overall performance for the user. Furthermore, because of its low voltage requirements it requires less power consumption, making it an attractive option for many computer systems. DDR4 is set to become the primary RAM in most computer systems as the industry transitions away from its predecessors.

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.