Despite the onset of what many in the industry call “Semiconductor Spring,” Samsung Electronics and SK hynix are not resuming production increases. As of May 20, both companies maintain a conservative approach toward ramping up production of standard DRAM and NAND chips.

Industry expectations had suggested that both firms might plan increases this year as semiconductor conditions improved. However, during their Q1 earnings call this year, both companies subtly communicated that “there will be constraints in DRAM production bit growth this year,” indicating they will continue with reduced production levels.

The market for standard DRAM and NAND, excluding HBM, remains uncertain. With the upcoming U.S. elections in November and potential changes in economic policy and trade regulations with China, the industry remains cautious. This uncertainty is further exacerbated by geopolitical tensions in the Middle East.

Last month, the average fixed transaction price for a standard 8Gb DDR4 DRAM used in PCs jumped by about 17% compared to the previous month. However, this increase is seen as a temporary phenomenon rather than a genuine recovery in demand. Micron’s memory production facility in Taiwan faced disruptions due to an earthquake last month, temporarily strengthening the bargaining power of suppliers. Conversely, prices for standard NAND (memory cards and USBs, 128Gb 16Gx8 MLC) have been stable since March, showing no increase.

According to market research firm TrendForce, demand surged briefly due to the earthquake in Taiwan, but the overall procurement volume of PC DRAM in Q2 is expected to decrease significantly due to high inventory levels held by PC manufacturers.

Samsung Electronics and SK hynix are instead focusing on expanding HBM production, which inherently reduces the production of standard memory due to the higher wafer requirements of HBM. Within the limited capacity, increasing HBM production means a more significant reduction in standard memory production.

The possibility of increasing production of standard products might become feasible in the second half of the year. Several smartphone releases are expected, including new Galaxy foldables and iPhones, which are significant events for the mobile sector, a key application area for standard memory.

By: DocMemory
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