DRAM Prices Surge in April as Non-face-to-face Activity Increases

DRAM contract prices surged in April as “untact” or non-face-to-face activities increased amid the spread of the COVID-19 virus. Server demand increased thanks to telecommuting and online classes.

The contract prices of DDR4 8 Gigabit (Gb) DRAMs, which are used for personal computers (PCs), averaged US$3.29 as of the end of April, up 11.9 percent from US$2.94 in March, according to market research firm DRAMeXchange on May 4.

It was the first time since April 2017 that DRAM prices recorded a double-digit monthly increase. It was also in 10 months that DRAM prices rose to the US$3 range.

DRAM prices have been on the rise since this January, after a slowdown in the global semiconductor market that continued until the end of 2019. The uptrend was boosted by the novel coronavirus spread.

Sales of memory semiconductors increased as data centers installed more servers to meet increasing demand for telecommuting and online classes. In addition, demand from Chinese PC makers increased as they resumed operations after lockdowns by the COVID-19 crisis.

However, NAND flash prices, which are used in solid state drives (SSDs), did not change. The price of a 128-gigabit (Gb) multi-level cell (MLC) NAND flash stood at US$4.68 as of April, the same as March. Although demand for mobile devices such as smartphones decreased, no change was made in prices as supply and demand in the entire market are balanced, industry watchers say.

The market for smartphone and automobile semiconductors has shrunk, but a surge in demand for chips for industrial and medical devices and equipment will offset the drop, they added. Omdia predicted that the growth of wireless chips will slide from 4.8 percent to 2 percent, while automotive semiconductors will shrink 7.5 percent. On the other hand, the industrial semiconductor market is expected to grow 2.5 percent compared to the previous year. Particularly in the market of semiconductors for medical devices and equipment will swell seven percent from US$5.5 billion to US$6 billion in 2019 due to the aftermaths of the pandemic.

They expected that PC and server demand for memories will increase further with the spread of “untact” culture.