Analysts at TrendForce, prior to the April earthquake in Taiwan, predicted a 3-8% rise in contract prices for DRAM and a 13-18% rise in flash memory prices for Q2. However, the current situation allows them to anticipate a more significant price increase for DRAM and NAND due to a various factors.
Specially, they now foresee a 13-18% rise in contract prices for DRAM and a 15-20% rise in the NAND segment for the second quarter. The Taiwan earthquake alone will only have an impact on some segments of the memory market. However, the high demand for HBM and the expansion of HBM3E chips production will greatly impact the market.
According to TrendForce experts, before the April earthquake, prices for DRAM and NAND memory for smartphones and PCs had been increasing for two to three consecutive quarters. However, following the earthquake, some computer manufacturers started to ensure their supplies, buying memory at significantly increased prices. As a result, contract memory prices had risen more significantly than predicted at the beginning of the quarter, as per TrendForce.
Secondly, memory manufacturers are started to prioritize HBM production more aggressively, which caused a reduction in the production of other types of DRAM and NAND. Samsung Electronics, for example, plans to allocate up to 60% of all its memory production capacities for HBM3E stacks by the end of the year. This will naturally reduce the manufacturing options of other memory types like DDR5. Furthermore, due to anticipated shortfall in Q3, buyers begin to stock up on memory. TrendForce estimates that HBM type memory will account for no more than 4% of supplier deliveries in Q2.
In the server solid-state drive segment, cloud service providers are purchasing QLC-based drives more actively in a bid to achieve higher power efficiency in artificial intelligence systems. Suppliers are holding back on delivery rates in response to the sudden surge in demand because they still do not have clarity on how the market will evolve. Currently, NAND type memory is mainly sold at a price that ensures production payback, but companies are not rushing to invest in expanding flash memory production.
TrendForce representatives clarify that eMMC and UFS-type memory will see a minimal contract price increase of 10% in the second quarter, setting themselves apart from these trends.
