DRAM and NAND Flash Prices May Surge in 4Q24 with Smart Output Management

According to the latest analysis from TrendForce, the downward trend in DRAM contract prices, which persisted for eight consecutive quarters since 4Q21, has finally come to an end in 4Q23. Similarly, NAND Flash has rebounded in 3Q23 after four quarters of decline. The key factor that will determine the continuation of this rally in memory prices throughout 2024 is the suppliers’ ability to effectively control their capacity utilization rates.

Avril Wu, the Senior Research Vice President at TrendForce, predicts that the first quarter of this year will be a period of growth, aligning with their initial projections. They anticipate a quarterly increase of approximately 13-18% for DRAM contract prices and 18-23% for NAND Flash contract prices. Although the overall market demand in 2Q24 is expected to be conservative, suppliers in both the DRAM and NAND Flash markets have already begun increasing their capacity utilization rates since the end of 4Q23. Additionally, NAND Flash buyers are projected to complete their inventory restocking in advance during 1Q24. As a result of these factors, the QoQ price increase for both DRAM and NAND Flash contract prices in 2Q24 is estimated to be a more moderate 3-8%.

Looking ahead to 3Q24, the traditional peak season will bring renewed energy for North American CSPs (Cloud Service Providers) to restock key components. If suppliers manage to keep their capacity utilization rates below 100%, there is potential for DRAM and NAND Flash contract prices to continue climbing, with a wider QoQ increase of 8-13%. In the DRAM market, the increasing penetration rates of DDR5 and HBM (High Bandwidth Memory) will further contribute to the overall ASP (Average Selling Price), resulting in a broader QoQ increase in contract prices.

Finally, in 4Q24, the general price rally is expected to continue as long as suppliers maintain effective strategies for controlling output. TrendForce forecasts an 8-13% QoQ increase in DRAM contract prices. It is worth noting that the rise in DRAM contract prices will primarily be driven by the growing market penetration of DDR5 and HBM products. However, when looking at individual products or product types, such as DDR5, there is a possibility of 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. For NAND Flash products, the forecasted QoQ increase in contract prices for 4Q24 is 0-5%.

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.

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