The sharp rise in DRAM and NAND flash prices that has continued since last year is expected to ease somewhat in the third quarter this year. As memory prices surged eight to nine times over the past year and PC and smartphone prices climbed in tandem, an analysis said consumers have approached their price tolerance limit.
On the 6th, market research firm TrendForce said the DRAM market in the third quarter will still face ongoing supply shortages, but due to weakening demand for electronics and a high base effect, contract prices are expected to rise only about 13% to 18% from the previous quarter. Compared with the second quarter, when DRAM prices jumped 58% to 63% from the prior quarter, the increase would slow sharply.
NAND flash prices are also expected to keep rising, but at a slower pace. TrendForce projected third-quarter NAND contract prices will increase 10% to 15% from the previous quarter. That would be well below the second quarter's 55% to 60% rise.
TrendForce said NAND demand will remain solid, supported by increased investment in AI data centers. However, as prices have climbed to record highs, consumers' purchasing burdens are growing, raising the possibility that demand growth will gradually slow.
The smartphone market is also expected to be affected. Manufacturers are likely to raise product prices in the third quarter to reflect the expense of sourcing high-priced low-power DRAM, which could lead to slower smartphone sales. If weak sales materialize, manufacturers may adjust production volumes, and an adverse cycle could emerge in which this consolidation to reduced memory demand.
Even so, memory prices themselves are likely to keep rising. With major memory makers continuing production cuts, increased DDR4 output by Taiwanese companies alone will not be enough to resolve the shortage. Considering these supply and demand conditions, TrendForce expects DRAM prices to keep climbing in the third quarter.