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DRAM prices rebound amid Japan's export curbs: report

All Headlines 10:46 July 12, 2019

By Kim Eun-jung

SEOUL, July 12 (Yonhap) -- Prices of DRAM rose for the first time in 10 months, a price chart showed Friday, partly attributable to increased purchases of memory chips following Japan's strict material export regulations on South Korea.

The average price of 8-gigabit DDR4 DRAM, a benchmark price for the category, stood at US$3 on Wednesday, up 1.2 percent from the previous day, according to DRAMeXchange, a division of TrendForce.

It was the first hike since the spot price marked a daily gain of 0.2 percent on Sept. 14.

The average prices of DRAM, memory chips used in computers and servers, have kept sliding this year due to supply glut and softening demand, exacerbated by a trade war between the United States and China.

Semiconductor chips are on display at Samsung Electronics Co.'s exhibition hall in Seoul on July 5, 2019. (Yonhap)

While analysts earlier predicted a continued slump in the chip prices later this year, Japan's export curbs against Seoul on key materials used in the chip fabrication process, which went into effect on July 4, fueled concerns over global supply disruption.

Two South Korean chip giants -- Samsung Electronics Co. and SK hynix Inc. -- accounted for 70 percent of the DRAM chip market in 2018, followed by Micron of the United States.

"DRAM prices temporarily increased on concerns over potential supply disruption due to Japan's export curbs and lack of chip supplies, but it is not yet clear whether that's a signal for an industry turnaround in general," Choi Do-yeon, an analyst at Shinhan Investment, said.

"As major chipmakers were expected to cut back spending on DRAM capacity this year, it would help the semiconductor industry in general."

IC Insights said supply glut in DRAM capacity and weak prices caused by trade uncertainties will continue to put pressure on chip prices in the latter half of 2019, but it predicted slower than expected declines this year and a recovery next year as major chipmakers are set to cut back their capital expenses.

"Actual DRAM capex spending in 2019 is forecast to be less than what is required to maintain 20 percent bit volume growth," IC Insights said. "That could offset the overspending in 2018 and help start a return to supply-demand balance within the DRAM market in 2020."


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