Rising DRAM prices bode well for S. Korean chipmakers

SEOUL, Feb. 4 (Yonhap) -- Spot market prices for DRAM chips are on a rising course, industry data showed Thursday, boding well for South Korean chipmakers that dominate the memory market.

The spot price of 8-gigabit DDR4 DRAM, a benchmark price for the category, reached as high as US$3.93 as of Wednesday, according to data from DRAMeXchange, a research division of market tracker TrendForce.

Its spot price reached $2.54 on Aug. 20, 2020, but rebounded above the $3 mark in mid-December.

A spot price is the price quoted in the market, while contract prices are negotiated as monthly or quarterly deals. Changes in spot prices affect contract prices. Generally, 90 percent of DRAM chips are traded on contract quotes.

Contract prices of DRAM chips have been also showing an upward trend recently.

The average contract price of 8-gigabit DDR4 DRAM was $3 at the end of January, up $0.15 from the previous month and its first hike in eight months.

The contract quotes for server DRAM have also climbed up 3-5 percent from a month ago.

The contract price for 16-gigabyte DDR4 DRAM went up 3.08 percent to $67, while that of 32-gigabyte chips rose 4.55 percent to $115 at the end of January.

TrendForce said DRAM contract prices are moving on an upward trend with chip suppliers' inventory reduction and strong demand from the market.

The rising DRAM prices are to benefit two major South Korean chipmakers -- Samsung Electronics Co. and SK hynix Inc.

As of the third quarter of 2020, Samsung dominated the global DRAM market with a 41.3 percent share, with SK hynix coming in second with a 28.2 percent share, according to TrendForce.

Both Samsung and SK hynix earlier projected this year's DRAM demand to be strong on the back of growth in mobile and server applications.

Samsung said its memory business, specifically the DRAM market, is expected to see a recovery during the first half of the year, while SK hynix estimated DRAM demand growth in 2021 to be around the high 10 percent and 20 percentage range.

According to market researcher IC Insights, DRAM is expected to be the fastest growing semiconductor product this year with 18 percent sales growth.

kdon@yna.co.kr
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