Market dynamics in the realm of DRAM and flash components are undergoing a notable transformation as analyses confirm a substantial upswing in prices, signaling potential challenges for the tech industry throughout 2024. TrendForce, a prominent market research firm, identified this significant shift in the spot market for DRAM and flash towards the close of the preceding year. The trend marks a departure from the two-year trend of declining prices since 2021, raising concerns about the potential ramifications on the costs of critical components like memory modules and SSDs. Projections indicate a robust surge in contract market prices for DRAM, anticipated to range between 13 to 18 percent in the initial quarter, coupled with expected hikes for NAND flash ranging between 18 to 23 percent.
The spot market, akin to a “grocery store” for electronic components, serves as a crucial indicator of market dynamics. Large bulk orders placed in this arena set the stage for contract prices—the primary domain for transactions involving DRAM and flash. Observations within the industry indicate buyers locking in higher prices, reflecting a consensus on the evolving pricing landscape for these integral components. While projections hint at a potential drop in NAND flash contract prices as buyers complete their restocking phase by the first quarter, a more tempered increase, ranging between 3 to 8 percent in the second quarter, is anticipated throughout the year.
In the DRAM market, a trajectory of smaller yet steady gains is anticipated across the entire year. The prevalence of DDR5 memory is expected to contribute to this trend, elevating the overall average price. However, inherent in these projections is a historical nuance likened to oil cartels, where market dynamics are shaped by a delicate balance of production volumes and capacity utilization. Notably, memory manufacturing capacity remains below full utilization, introducing a cautionary note regarding the potential impact of aggressive production increases. While not an immediate concern, industry stakeholders remain vigilant, acknowledging the potential risks that could tip the balance and influence the trajectory of prices in these critical markets.