Market research firm TrendForce has predicted a significant decline in memory prices for the first quarter of 2024, with DRAM prices expected to fall by 8-13% and NAND prices by 10-15%. This forecast, announced on Jan. 1, has raised concerns about a potential semiconductor cold wave, reminiscent of the downturn experienced in 2023.
TrendForce explained that memory companies are likely to face increased inventory levels and deteriorating order demand in the first quarter. The firm noted, “Early stockpiling by laptop manufacturers in preparation for potential import tariffs by the Trump administration has further exacerbated price declines.” This early stockpiling has led to an oversupply, putting additional downward pressure on prices.
The decline is not limited to DRAM and NAND flash; even enterprise SSDs, which saw a boom last year due to AI demand, are expected to see a price drop of about 5-10% in the first quarter.
Despite these challenges, there are some bright spots in the semiconductor market. Demand for AI-related semiconductors, such as High Bandwidth Memory (HBM) and enterprise SSDs, is expected to remain strong. TrendForce highlighted, “HBM has emerged as a key growth driver for the DRAM industry, driven by surging AI demand.” The firm also predicted that HBM3E (5th generation) would maintain tight supply even in 2025.
SK Hynix, a major player in the semiconductor industry, echoed this sentiment. Last October, the company dismissed concerns about a slowdown in HBM demand and oversupply, stating, “HBM demand next year (2025) is expected to increase more than anticipated as AI chip demand and customers’ willingness to expand AI investment are confirmed.”
In addition to HBM, the prices of server products such as DDR5 and enterprise SSDs are expected to recover as early as the second quarter or the second half of the year. TrendForce stated, “Enterprise SSD demand will increase even in 2025,” and added, “Some suppliers are switching to high-capacity products to meet the expected demand for enterprise SSDs next year.”
However, the market faces potential disruptions from Chinese memory semiconductor company CXMT (Changxin Memory Technologies). CXMT, which has primarily produced older DDR4, has recently launched the latest DDR5 product into the market. If Chinese companies enter the server DDR5 market and expand production capacity this year, a resulting price decline is expected to be unavoidable.
