DRAM Slam
DRAM prices have been on a tear this year, with spot prices for a basket[1] of DDR 4 DRAM up 177% YTD. Over the last 4 weeks however the relentless increases have been quelled and that same basket saw a 3.9% price decline. We note that this is a very small blip on a much large screen, but according to Trendforce the industry is getting ready for another round of price increases as we head into the peak season for the CE space. Trendforce cites Commercial Times as Taiwanese DRAM producers Winbond (2344.TT) and Nanya (2408.TT) raise prices.
There have been a number of factors that have influenced the rise in DDR 4 prices this year with three underlying drivers. Driver #1 is AI, and its relentless thirst for HBM (High bandwidth memory). Given the higher profitability and strong demand for HBM, large DRAM producers have shifted production away from DDR 4 and DDR 5 production, with major producers like Samsung Electronics (005930.KS), SK Hynix (000660.KS), and Micron (MU) expecting to wind down DDR 4 production by the end of this year.
Driver #2 was tariffs, which caused buyers to pull-in inventory stocking, creating a bit of ‘phantom’ demand that helped to push up prices, along with an intentional production cutback late last year. This set the stage for these factors to generate significant positive momentum behind DRAM pricing and pushed up DDR 4 prices so much that they exceeded DDR 5 prices, a very rare inversion,
While the major DRAM producers have to follow the macro trends, smaller producers can capitalize on the continuing price strength in DDR 4 and it seems they are taking full advantage of that strength by keeping capacity tight and raising prices again. Thus far it has had only a small effect on spot pricing, but as we enter the seasonally strong period for CE products expectations are that DDR 4 prices will rise further. To us, this is a test. We are quite curious to see if the tariff pull-ins have a dampening effect on demand for the holiday build period. If they were truly pull-ins with no incremental demand behind them, it could be difficult to get such price increases to stick. If there is some real demand, the increases will be effective. While each product category in the CE space is different, there are a number of other products where a similar scenario is playing out, so any indication of whether there is real demand behind current prices will help to map out the remainder of the year and 1Q ’26 for the CE space in general.
[1] 16GB 2Gx8 MIT/s; 6GB 2Gx8 eTT; 8GB 1Gx8 3200 MIT/s; 8GB 512Mx16 3200 MIT/s; 8GB 1Gx8 eTT; 4GB 512Mx8 1600 MIT/s
There have been a number of factors that have influenced the rise in DDR 4 prices this year with three underlying drivers. Driver #1 is AI, and its relentless thirst for HBM (High bandwidth memory). Given the higher profitability and strong demand for HBM, large DRAM producers have shifted production away from DDR 4 and DDR 5 production, with major producers like Samsung Electronics (005930.KS), SK Hynix (000660.KS), and Micron (MU) expecting to wind down DDR 4 production by the end of this year.
Driver #2 was tariffs, which caused buyers to pull-in inventory stocking, creating a bit of ‘phantom’ demand that helped to push up prices, along with an intentional production cutback late last year. This set the stage for these factors to generate significant positive momentum behind DRAM pricing and pushed up DDR 4 prices so much that they exceeded DDR 5 prices, a very rare inversion,
While the major DRAM producers have to follow the macro trends, smaller producers can capitalize on the continuing price strength in DDR 4 and it seems they are taking full advantage of that strength by keeping capacity tight and raising prices again. Thus far it has had only a small effect on spot pricing, but as we enter the seasonally strong period for CE products expectations are that DDR 4 prices will rise further. To us, this is a test. We are quite curious to see if the tariff pull-ins have a dampening effect on demand for the holiday build period. If they were truly pull-ins with no incremental demand behind them, it could be difficult to get such price increases to stick. If there is some real demand, the increases will be effective. While each product category in the CE space is different, there are a number of other products where a similar scenario is playing out, so any indication of whether there is real demand behind current prices will help to map out the remainder of the year and 1Q ’26 for the CE space in general.
[1] 16GB 2Gx8 MIT/s; 6GB 2Gx8 eTT; 8GB 1Gx8 3200 MIT/s; 8GB 512Mx16 3200 MIT/s; 8GB 1Gx8 eTT; 4GB 512Mx8 1600 MIT/s
Figure 1 - DDR 4Weekly Pricing - Source: SCMR LLC, Trendforce
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