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DRAM Spot Price Soars 43% in Just Two Weeks
Semiconductors
DRAM Spot Price Soars 43% in Just Two Weeks
  • By matthew
  • September 24, 2013, 06:23
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Two gigabytes of Hynix PC3 12800s DDR3 RAM that runs at a clock speed of 1600Mhz and sometimes burns down manufacturing plants.
Two gigabytes of Hynix PC3 12800s DDR3 RAM that runs at a clock speed of 1600Mhz and sometimes burns down manufacturing plants.

 

The DRAM spot price, which moved sideways for months, has been skyrocketing since the fire accident in SK Hynix’s Plant in Wuxi, China. In particular, that of the DDR3 2Gb (1,666MHz) has jumped by over 43% when compared to before the accident. 

According to DRAMeXchange’s data made available on September 22, the spot price of the DDR3 2Gb (1,666MHz) increased more than 43% in two weeks to reach US$2.277. The price has continued its upward trend this month. On September 5, the day following the fire accident, it jumped 19%. 

The price soared to US$1.97 on September 9, even though SK Hynix announced on the previous day that it resumed production in part of the Wuxi Plant. The price went further up to US$2.013 on September 11 to break the US$2 mark for the first time in nine quarters since the second quarter of 2011. Two days later, SK Hynix announced that it would resume the production in a full scale from October, but the spot quotation rose to US$2.06 again due to concerns over a possible supply shortage. 

“SK Hynix is going to restart the manufacturing in Wuxi from October and raise the production volume to pre-accident levels before the end of November, but the production resumption will be reflected to the demand and supply conditions with at least some time gap,” said an industry insider, adding, “The supply conditions will not be stabilized until mid-December this year.” In general, it takes an average of 40 to 45 days until wafers are input into DRAM manufacturing processes to produce finished goods. 

At the same time, Chinese electronics manufacturers that have been supplied with a quantity of DRAM chips by the Wuxi Plant are hoarding chips at higher prices to provide against the year-end peak season. This is accelerating the upward movement of the DRAM spot price. 

In the meantime, some experts are forecasting that the spot quotation can be stabilized earlier than expected in that SK Hynix is maximizing its production volume in Korea to normalize its DRAM supply. “The Korean company is planning to increase its Icheon Plant’s production volume by at least 30%,” one of them explained, adding, “As the case may be, some of the NAND flash fabrication facilities in Chengdu can be converted for DRAM manufacturing purposes.”

The halt of the operation of the Wuxi Plant is expected to drag down the global DRAM supply volume by 8% to 9% until this year’s end. SK Hynix is accounting for 30% of the global DRAM market. The Wuxi Plant is responsible for 49.7% of SK Hynix’s total DRAM production.