The international spot prices of memory chips are rebounding fast with the Japanese government restricting the export of semiconductor materials to South Korea. Under the circumstances, global semiconductor market conditions are expected to get better earlier than previously thought.
According to market research firm DRAMeXchange, the DRAM spot price rose both last week and this week and the NAND flash price began to gradually rise late last month. The PC DRAM (DDR4 8Gb) price rose 11.8 percent from July 11 to 15 and the rate of increase was 13.7 percent for DDR3 4Gb. The NAND flash (64Gb MLC) price rose 3.6 percent during the same period.
This is more optimistic than previous forecasts. One month ago, DRAMeXchange predicted that the NAND flash and DRAM prices would hit the bottom in the third quarter of this year and the second quarter of 2020, respectively.
This unexpected change in situation has to do with the export restrictions that started last week. “The restrictions are leading to a rapid demand recovery in the NAND flash market,” Kiwoom Securities explained, adding, “Clients are looking to purchase more with the 3D NAND price close to its lower limit and supply further reduced in the wake of Toshiba’s power outage and the export restrictions are likely to further stimulate them to result in a rapid inventory reduction.”
Those in the industry are paying attention to the procurement of hydrogen fluoride, which is one of the chemicals restricted by the Japanese government. This is because an insufficient supply will significantly affect memory chip production if the economic disputes between South Korea and Japan continue for long.
At present, 43.9 percent of the hydrogen fluoride used by South Korean companies is supplied from Japan. The supply from Japan is almost irreplaceable as it is much higher in purity and semiconductor manufacturing processes by nature allow no mixed use of materials. This implies that extended export restrictions can lead to a decline in memory chip production attributable to an undersupply of hydrogen fluoride.