DRAM chip prices forecast to drop 13-18% in Q4 2022

SEOUL: DRAM, or dynamic random-access memory, prices are estimated to post a quarterly decline of 13-18 per cent in the fourth quarter, steeper than the previous quarter, a report has said, as consumer demand for electronic devices remains stagnant and macroeconomic conditions aggravated.

Research firm TrendForce said rising inflation has significantly weakened the appetite for consumer products, likely to put cold water on the year-end holiday shopping demand.

Lower demand, it said, would lead to DRAM's bigger price drops from the 10-15 per cent it had forecast for the third quarter, reports Yonhap news agency. DRAM is a type of volatile semiconductor memory that retains data as long as power is supplied. It is commonly used in personal computers, workstations and servers. According to TrendForce, declining consumer demand resulted in delayed purchases by DRAM customers and the escalation of supplier inventory pressure. Falling DRAM prices bode ill for South Korea's two chip giants -- Samsung Electronics and SK hynix, with a combined market share of more than 70 per cent. Samsung led the DRAM market with a 42.7 per cent market share in the first quarter, followed by SK hynix at 27.1 per cent. Server DRAM demand, which has largely supported the bottom lines of South Korean chipmakers amid difficult market conditions, has also slowed amid growing inventory level. TrendForce estimated server DRAM prices to drop by around 13-18 percent in the three months ending in December. The global chip market has entered a downcycle. The research firm forecast DRAM market demand bit growth will amount to only 8.3 per cent next year, below 10 per cent for the first time in history. It said supply is likely to grow about 14 per cent, suggesting the DRAM market could be "severely oversupplied" and "prices may continue to decline."