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Declines in DRAM prices to slow down in Q4: report

Industry 08:00 November 16, 2019

SEOUL, Nov. 16 (Yonhap) -- The pace of the fall in DRAM prices is expected to slow down in the fourth quarter on a gradual recovery in global demand, a report showed Saturday.

The average sales prices of DRAM are anticipated to shrink 5 percent in the October-December period compared with a year ago, according to industry tracker DRAMeXchange.

DRAM prices dropped 20-25 percent on-year in the first half on weak demand and high inventory levels amid a protracted trade war between the United States and China, but a fall in prices has moderated in recent months on increased purchases from data centers.

A wafer, a thin slice of a semiconductor, is displayed at Samsung Electronics Co.'s exhibition center in southern Seoul on Oct. 31, 2019. (Yonhap)

The total trading volume in October considerably grew from three months earlier, the market researcher said, anticipating price stabilization starting from next year.

"Once suppliers' inventory levels have sufficiently lowered, they will no longer need to cut prices to encourage further sales," DRAMeXchange said in a report. "These factors have the potential to help DRAM prices stabilize and recover in 2020."

During a third-quarter earnings conference call, Samsung Electronics Co., the world's largest memory chipmaker, expected DRAM inventory to normalize in the first half of 2020 on increased purchases from data centers and expansion of 5G smartphones.

Its smaller rival SK hynix Inc. last month announced plans to reduce capital spending next year, which will result in chip supply reduction.

ejkim@yna.co.kr
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