DRAM Contract Prices Set to Surge Across Different Segments in 1Q24

The dynamic random-access memory (DRAM) market is set to experience price hikes across various sectors in the first quarter of 2024. The estimations from TrendForce suggest an increase ranging from 13 percent to 18 percent, with different segments experiencing differing impacts.
DRAM price trends in Q1 2024Mobile DRAM Takes the Lead in Surge

Among the segments, mobile DRAM emerges as the frontrunner in this price surge. Marked by low contract prices, the mobile DRAM market is poised for an estimated 18 percent to 23 percent uptick in prices in 1Q24. This surge is fueled by strategic purchasing by buyers looking to bolster cost-effective inventories, despite lingering uncertainties in the smartphone market. With limited supply meeting aggressive buying, manufacturers are benefiting in price negotiations.

PC DRAM Faces Transition Amid Price Rally

For PC DRAM, the scenario is nuanced. While DDR4 orders remain unfilled and procurement engines continue running, the industry is gradually shifting toward DDR5, casting uncertainty over DDR4 expansion. Nonetheless, both DDR4 and DDR5 prices have not yet hit manufacturer targets, setting the stage for an anticipated 10 percent to 15 percent price increase in PC DRAM contracts for 1Q24.

Server DRAM Sees Robust Price Spikes

Buyers strategically depleted DDR4 stocks in the past year, leading to a remarkable 40 percent inventory of DDR5 by the end of 4Q23. However, the full extent of market demand remains untapped, with DDR5 production ramping up while DDR4 supply is constricted. This sets the scene for a robust 10 percent to 15 percent spike in server DRAM contract prices for the upcoming quarter, though some manufacturers locked in higher price baselines, resulting in a more moderated 8 percent to 13 percent hike for a few players in early 2024.

Graphics and Consumer DRAM Follow Suit

Graphics DRAM continues its upward price trajectory, with an anticipated 10 percent to 15 percent rise in contract prices in 1Q24. This surge is driven by continuous demand for mainstream specifications like GDDR6 16Gb, prompting early stocking strategies by buyers.

On the other hand, in the consumer DRAM sector, manufacturers are aggressively raising contract prices, spurring buyers to stockpile early. This, however, aligns with the industry’s off-season, which might result in weaker end sales and increased inventory levels, particularly with DDR4 capacity being crowded out by expanding HBM and DDR5 penetration throughout 2024.

In summary, the DRAM market in 1Q24 anticipates significant price hikes across various segments, driven by shifting demands, constrained supply, and strategic purchasing by both manufacturers and buyers. This dynamic landscape underscores the complexities within the memory industry as it navigates transitions between different DDR generations and adjusts to fluctuating market conditions.