The DRAM market is currently experiencing a phase of significant downturn, primarily driven by weakened demand for IT products and an increase in supply from Chinese companiesThis situation has led analysts to forecast continued price declines well into the latter half of this yearParticularly noteworthy is the phenomenon in server DRAM pricing, which, having remained stable the previous year, has now witnessed significant reductions.

According to a report released on February 7 by market research firm Omdia, a further decrease in prices for PC, server, and mobile DRAM is anticipated to persist at least until the third quarter of this yearThe report specifically outlines an expected decline of about 10% during the first half and a further reduction of around 5% in the latter halfThis trend can be attributed to a combination of low semiconductor demand and an oversupply stemming from Chinese manufacturers, leading to diminished prices not only in older semiconductor products but also in the latest DDR5 offerings.

Omdia’s projections indicate that the price for a 64GB server DDR5 module, which was priced at $270 in the fourth quarter of last year, is expected to decrease to $248 in the first quarter of this year and further to $228 in the second quarterSpeculation also suggests that prices may fall below the $200 mark by the fourth quarter, significantly altering the landscape for server memory pricing.

This market contraction is largely due to restrictive supplies from server GPUs, combined with Chinese firms that, having previously focused on DDR4, are now entering the DDR5 marketMajor memory manufacturers like Samsung Electronics and SK Hynix have collectively reduced their shipping volumes in the first quarter, making the contraction of the DRAM market appear inevitable.

In its latest earnings report, Samsung highlighted that, "In the mobile and PC sectors, customer inventory adjustments are expected to continue through the first quarter," furthermore stating, "In the server segment, certain projects from data center customers are being delayed due to GPU supply constraints, leading to postponed memory needs." This points to a tightening of the market driven by specific consumer behavior and manufacturing capacities.

The industry is keeping a close eye on indicators signaling a potential rebound in the DRAM market in the latter half of the year

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Any recovery in shipments and the timing of inventory adjustments on the demand side are crucial to understanding when a market recovery may materializeAnalyst Jin Yun-ho from IBK Investment Securities remarked, "The recovery of shipments will be a key factor for the market's revival and subsequent price rebound," adding, "The pace of recovery in shipments after the second quarter will be an important indicator for the overall price rebound in the DRAM market."

At the beginning of this year, TrendForce had predicted a general decrease in DRAM prices by the first quarter of 2025, estimating that standard DRAM products could see declines ranging from 8% to 13%. If High Bandwidth Memory (HBM) products are included in the analysis, the overall market price decline is expected to be somewhat gentler, hovering in the 0% to 5% range.

PC DRAM, notably, is projected to face the most significant challenges, with anticipated price drops in the range of 8-13%. This movement stems from a variety of contributing factors including inventory reductions that began towards the end of 2024, diminished demand in end markets, an increase in DDR4 production by Chinese manufacturers, and a surplus of inexpensive chips in the spot market.

Similarly, server DRAM prices are forecasted to decline by 5-10%, partially influenced by seasonally low demandManufacturers have also transitioned parts of their DDR4 production lines to DDR5, alongside adjustments made in some HBM capacities, thereby amplifying the supply further.

Within the mobile sector, smartphone manufacturers are still exercising caution in their procurement plans, despite inventory levels stabilizingContract prices for LPDDR4X and LPDDR5X are expected to decrease by 8-13% and 3-8%, respectivelyThis trend signifies a holistic downturn in the DRAM market.

Moreover, graphics DRAM prices expect to decrease by 5-10%, largely reflective of sluggish demand across the board

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Even preparations for the upcoming GDDR7 to support next-generation GPUs have not managed to stem the downward pricing tide as consumer-grade DRAM prices have plummeted, with DDR3 expected to decrease by 3-8% and DDR4 anticipated to see even greater declines in the region of 10-15%.

Nevertheless, TechInsights predicts a notable rebound in the memory market by 2025, primarily propelled by the rapid adoption of artificial intelligence (AI) and related technologiesThe exploration of these markets is revealing several key trends likely to shape the future landscape of the memory market.

Data from TechInsights reveals that the rise of AI, particularly in data-intensive applications such as machine learning and deep learning, is driving an unprecedented demand for High Bandwidth Memory (HBM). With data centers and AI processors increasingly relying on this memory to process massive data loads with low latency, shipments of HBM are projected to soar by 70% year-on-yearThe surge in HBM demand is anticipated to redefine the DRAM market, as manufacturers prioritize the production of HBM over traditional DRAM categories.

Additionally, with AI increasingly penetrating various industries, the demand for high-capacity solid-state drives (SSDs) is on the riseThis is particularly pertinent for AI workloads that require extensive data storage coupled with swift retrieval timesConsequently, there is an expectation for increased shipments of products utilizing QLC NAND technology, which offers higher densities at lower costsWhile the write speeds of QLC SSDs are relatively slower compared to other NAND types, they are garnering more attention due to their cost-effectiveness and suitability for AI-driven data storage needsThe projected growth in NAND bit demand for data centers is expected to spike by approximately 70% in 2024, with continuing growth of over 30% in 2025.

Pushed by the surging demand for AI applications, capital expenditures within the memory market are increasingly being directed towards DRAM, particularly HBM

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