Prices for general-purpose DRAM and NAND flash chips have remained flat for four months in a row, suggesting demand recovery is slower than expected.

According to South Korean media Newssis, The prices of general DRAM and NAND flash products, which had risen for four months straight through January 2024, have since stagnated, remaining flat after a slight increase in April.

Industry insiders attributed this price stagnation to a slower than expected recovery of the Chinese economy. Despite expectations that DRAM and NAND prices would rise in line with improving market conditions in the second half of 2024, the sluggishness in the Chinese market will likely hold prices back.

China now dominates 60-70% of global electronics production. However, a recent drop in demand for large electronic devices such as computers, TVs and smartphones has hampered downstream manufacturers’ depletion of commodity DRAM and NAND flash chips, slowing price increases.

With China currently absorbing 37% of South Korea’s total semiconductor exports, a sluggish Chinese market will undoubtedly impact South Korea’s memory industry, a key export sector for the country. Additionally, the current global economic downturn and the resulting increase in demand for budget PCs has also caused the profit performance of general-purpose memory to fall short of expectations.

Market observers noted that the improvement in market demand for smartphones and other devices will be less than 10% in the second half of 2024, limiting the room for price growth of memory chips. However, due to active production cuts by major players such as Samsung Electronics and SK Hynix in 2023, it is unlikely that prices will decline.

Some analysts also expect memory chip prices to rise in the second half of 2024 due to the industry’s focus on High Bandwidth Memory (HBM) production and rising demand for storage devices due to the AI ​​boom.