TrendForce’s latest report indicates that the fourth quarter of 2023 will witness a substantial surge in contract prices for mobile DRAM, with a projected increase of 13–18 percent.
Notably, NAND Flash isn’t lagging behind, as contract prices for eMMC and UFS are expected to climb by approximately 10–15 percent within the same timeframe. This surprising shift in momentum is positioning mobile DRAM, traditionally considered an underperformer in profit margins compared to its DRAM counterparts, at the forefront of this round of price increases.
The reasons behind this expanded quarterly increase are multifaceted. On the supply side, Samsung’s notable reduction in production capacity and Micron’s recent announcement of a price hike exceeding 20 percent have laid a strong foundation for industry-wide confidence in the prospect of price increases. On the demand side, the latter half of 2023 saw surging demand for mobile DRAM and NAND Flash (eMMC, UFS).
This demand was not solely driven by the traditional peak season; rather, it was amplified by factors such as the release of the Huawei Mate 60 series. This, in turn, spurred other Chinese smartphone brands to expand their production targets. The rapid rise in demand within a short span has emerged as a key factor propelling Q4 contract prices upward.
TrendForce’s projections suggest that memory prices will continue their upward trajectory into the first quarter of 2024. However, the usual off-season lull and a reduction in workdays due to the Lunar New Year might temper the enthusiasm for price increases to some extent.
Nevertheless, the current outlook still anticipates ongoing growth in first-quarter contract prices for mobile DRAM and NAND Flash (eMMC, UFS) in the coming year. The pace of this increase will depend on whether suppliers continue to adopt a conservative production strategy and whether there is sufficient consumer demand to buoy the market.
These developments underscore the dynamic and ever-evolving nature of the semiconductor industry, where shifts in supply and demand, as well as the introduction of new products and innovations, can significantly impact pricing and market trends. Industry stakeholders will be closely monitoring these developments as they navigate an environment of increasing volatility and opportunity.