The Korea Herald


Chip prices projected to rebound

By KH디지털2

Published : June 20, 2016 - 17:31

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[THE INVESTOR] Speculation has grown over the possible rally of semiconductor prices amid the industry’s efforts to control the supply and releases of new smartphones, industry sources said Monday.

According to global online semiconductor market DRAMeXchange, the spot price of DDR3 began its rebound early this month. 

The prices of DDR3 and DDR4 have been on the decline since late 2014, with each hitting record lows last month, at $1.25 and $1.31, respectively. 

The fall of DRAM price has, consequently, led to sales decreases for Samsung Electronics and SK hynix, the world’s two biggest chipmakers.

In the first quarter of this year, Samsung Electronics’ sales dropped by 16.6 percent to 3.9 billion won ($3.36 million) on-year. SK hynix also showed a sales decline by 19.2 percent to 2.3 billion won compared to the previous quarter.

Despite the sales drop, Korea has sustained its No. 1 position in the DRAM market with the largest share, at 74.4 percent.

Companies’ efforts to control the supply and release of new smartphones have contributed to the semiconductor prices rebound, analysts said.

As the DRAM price started to plunge, Samsung Electronics and SK hynix slowed down the pace of supply, while manufacturers changed their DRAM investment plans to reduce concerns on oversupply.

Greater use of DRAM in smartphones also triggered the price rebound, they added.

In addition to Samsung’s latest smartphone Galaxy S7, which is backed by four gigabytes of RAM, the upcoming Galaxy Note 7 will be equipped with 6GB RAM. The Note 7 Series is slated to be released in August.

Chinese companies such as Huawei and Vivo also recently unveiled new smartphones that have larger 6GB memory chips.

Apple’s iPhone 7 and 7 Plus are also likely to stimulate the DRAM sales jump, as they are backed by 2GB and 3GB RAM.

Along with the DRAM price rebound, the price of NAND Flash is likely to stop declining and stabilize, experts said.

At recent information technology event Compuforum, DRAMeXchange forecast that the NAND Flash price will likely rebound in the second half of the year upon rising demand from Chinese companies and Apple.

It said that new iPhone usually draws a 3 percent rise of NAND Flash demand, while the demand of the NAND Flash-based e-MultiMediaCard has already surged 36 percent, it added.

By Lee Hyun-jeong (