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September 22, 2017

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DRAM, NAND prices rise amid shortage

Memory module prices are rising amid short supplies, industry sources said Monday. Simon Chen, chairman of ADATA Technology Co., one of Taiwan's leading memory and storage manufacturers, said global supplies of memory products, including DRAM and NAND Flash, will remain tight in the coming months.

Without the opening of new production lines, the DRAM supply could become even tighter in the third quarter of this year compared with Q2, Chen said.

Supplies of NAND Flash modules will also fall far short of demand in Q3 because of strong demand from solid-state drive (SSD), smartphone and tablet computer manufacturers, Chen said.

The shortage has pushed up prices for mainstream memory modules, Chen went on, noting that the spot price for DDR3 2Gb modules, for instance, has surged to a new high of US$1.81 over the weekend.

The Taipei-based Commercial Times also said in a front-page report Monday that South Korean technology titan Samsung Electronics Co. will cut supplies of DRAM and NAND Flash modules to Taiwan and China from June to satisfy its demand for memory chips for its own mobile devices.

Samsung, the world's largest memory module supplier, has reduced production of standard DRAM to make room for producing more mobile DRAM and NAND Flash modules to be fitted in the new large-screen Galaxy Note 3 smartphone, the report said.

Robust sales of Samsung's champion flagship model, the Galaxy S4, more than 10 million units of which have been sold since its launch in late April, was another reason behind Samsung's cutting into standard DRAM production, the report said.

Taiwanese smartphone and PC makers such as HTC, Acer and AsusTek have already been feeling the effect of Samsung's prioritization to meet its own demand for mobile DRAM and NAND Flash chips, the report said.

Two other factors have further squeezed global memory module supplies, the report said.

First, Apple Inc. has bought up nearly 50 percent of the NAND production capacity of other major memory module makers SK Hynix, Toshiba and SanDisk capacity, as the U.S. consumer electronics giant will launch new models of its iconic iPhone and iPad in the second half of the year.

Apple has also sucked up 80 percent of Elpida Memory Inc.'s mobile DRAM production capacity, the report said.

Second, NAND production lines of major U.S. memory module manufacturers Micron Technology Inc. and Intel Corp. have all been used to produce their own brand-name SSDs, according to the report.

The magnitude-6.3 earthquake that struck Taiwan Sunday might drive DRAM prices up even further because major Taiwan-based memory module makers such as Rexchip, Winbond, Nanya Technology and Inotera Memories reported silicon wafer damage problems after the quake, the report noted.

Against this backdrop, it forecast, the spot price for DDR3 2Gb could soar from the current US$1.81 to a new high of US$2 in the coming few days.

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