This article is reproduced from Lei Technology
For the digital circle in 2020, "out of stock" and "price increase" are definitely the two most prominent keywords. Due to the sudden outbreak of the new crown epidemic, workers were forced to suspend work and production, and domestic and foreign foundries fell into a situation of insufficient production capacity. This series of chain reactions completely disrupted the established plan of the entire electronics industry in early 2020. iPhone 12 series, PS5 game console, Xbox One X game console, RTX 3000 series graphics card, RX 6000 series graphics card, all these popular products are facing the frenzy of price increases in the crisis of shortage, consumers are caught off guard.
What's interesting is that even in this wave of out-of-stock price increases last year, memory is still in a price-declining cycle. The main reason is that the DRAM yield rate is increasing day by day, the supply of memory exceeds demand, and domestic and foreign manufacturers are actively competing for market share, resulting in product prices that have always remained low. It is precisely because of reasonable market competition and sufficient production capacity that everything is moving in the direction of benefiting consumers.
Unfortunately, this situation seems to only last until this month. Entering 2021, the industry-wide price increase trend has finally hit the memory side. According to domestic media reports, many memory products on e-commerce platforms have quietly increased prices, and some products have increased prices by nearly 100% compared to the end of last year. This is certainly not good news for DIY players who are interested in installing machines.
So the question is, why does memory increase in price at this time? What is the current price of memory? Is it a more appropriate time to buy memory now?
Why is the price of memory rising?
In fact, as early as December last year, the industry had already signaled that the price of memory was about to increase. According to the IT House report, the memory IC design company Jinghao Technology has publicly stated that the prices of niche DRAM and NOR Flash have both increased, and the contract price will start to increase from the first quarter of next year. The price is expected to rise all the way in the first half of the year. The tight supply-demand relationship has led to IC price increases. Not only have many raw material manufacturers issued price adjustment letters, but also major memory chip manufacturers such as Samsung, Hynix and Micron are also increasing their shipment prices.
From the actual situation, according to the latest quotation from ChinaFlashMarket, in December last year, the price of the memory market increased significantly, and the price of memory bars in some channels has increased by more than 10%. Comparing the quotations of memory sticks in February this year, we can see that the current prices of memory sticks in the industry are on a continuous upward trend, which is nearly 26% higher than that in December last year.
It can be seen that the increase in demand has effectively driven the increase in the price of memory sticks. SK Hynix predicted at the financial report that due to the continued strong demand for PCs, the gradual recovery of demand in the enterprise data center market, and the hot sales of 5G mobile phones, the demand for memory chips is expected to be strong in 2021. Micron Technology said that in the next few years, people will see 5G technology bring new telemedicine, distance learning and virtual entertainment applications, and these applications put forward higher demand for memory, the market for high-bandwidth, low-power memory (Such as LPDDR5) demand continues to grow.
On the other hand, the low price of memory cannot tolerate, and some memory manufacturers have begun to actively regulate the supply of memory. According to a report by South Korean media Money Today, Samsung Electronics and SK Hynix’s investment in DRAM equipment this year has both declined compared to previous years, and DRAM capital expenditures in 2021 will be lower than in 2020. The reduction of the original production capacity and supply of foreign chip manufacturers is also one of the reasons for the price increase.
(Source: Money Today)
Finally, it is because of the direct impact of the recent Texas cold wave. Because of the cold wave, a large-scale blackout occurred in Texas, the United States. According to the Yonhap News Agency, due to the power supply interruption, the local semiconductor factories of many companies, including Samsung Electronics, NXP Semiconductors, and Infineon Technologies, were forced to shut down.
According to data, Samsung’s fab in Austin, Texas is an important production base for its semiconductor business. It was formally established in 1996 and is now a huge production base with multiple factories. The fab mainly produces DRAM memory chips and NAND Flash chips, accounting for approximately 28% of Samsung's total logic chip production capacity. In addition, NXP Semiconductors has two fabs in Austin, and Infineon also has a fab. The shutdown will inevitably cause huge losses to the global supply of DRAM and NAND Flash.
It is precisely because of the impact of many of the above factors that the current memory has fallen into a situation of comprehensive price increases. According to the "Weather Warning" issued by the National Weather Service, Texas is still facing continuous cold waves. Cold weather and road icing are expected to last for several days. From this point of view, the local fabs of various chip manufacturers may not be able to resume work in a relatively short period of time, and the wave of memory price increases will continue.
Current memory prices
With chip and pellet manufacturers increasing their prices, what price is the current domestic e-commerce platform's memory? Xiao Lei actually investigated it and found that the ADATA DDR4-3200 16GB memory combination, which generally uses Samsung and Hynix particles, was 389 yuan in November last year. It has risen to 589 yuan before the deadline, and the price is still steadily increasing.
The familiar Kingston hacking DDR4-3200 16GB memory combination, which was priced at 439 yuan in October last year, has risen to 639 yuan before the deadline. Not only that, the product is still out of stock pre-order status, and the situation of memory supply in short supply has begun to appear.
From this point of view, the use of foreign particles of memory has indeed generally seen continuous price increases. As a matter of fact, this round of memory prices rising across the board should be an excellent opportunity for domestic memory manufacturers and memory particle manufacturers. The domestic DRAM products of Changxin Storage have been adopted by mainstream memory brand manufacturers such as ADATA and Guangwei. Taking advantage of the price increase of memory and memory particles in other countries and regions, domestic manufacturers can start a price war and gain market sales and consumer recognition in the low-end and mid-range sectors.
So, what is the current situation of the memory sticks that use domestically-made particles? We can see that the Guangweiyi Pro DDR4-2666 16GB memory using domestic Changxin particles, the price in October last year was 364 yuan, and it had risen to 459 yuan before the deadline. It can be seen that whether domestic pellets or imported pellets are used, the price increase of memory is generally occurring.
Price increase is inevitable.
In fact, Xiao Lei can understand the current situation of memory price increase. In recent years, the long-term low price of memory has made it intolerable for raw material manufacturers, chip manufacturers and memory manufacturers. Now that market demand exceeds production capacity, prices will naturally rise. According to the 2021 version of the Macleans Report released by ICInsights, the DRAM market is expected to become one of the fastest growing product areas in 2021, with sales expected to increase by 18%. Data from Global Semiconductor Observation shows that in the past six months, memory prices have risen by 55%, and this is likely to be just the beginning of memory price increases.
(The Macleans Report 2021 Edition)
This is good news for semiconductor companies, but not good news for consumers. Some consumers may feel that the price increase is not obvious, because 90% of the memory products on the market come from memory particles negotiated in advance by manufacturers. However, the inventory will be exhausted one day, and the continuous price increase of memory is inevitable.
2021 is still an unsatisfactory year for the Installer Party. The performance of the graphics cards newly released by the two manufacturers is ridiculously strong, and the CPU performance of the AMD Zen3 architecture has improved a lot. It is estimated that it is difficult for the installers to suppress their inner impulses. However, whether it is a graphics card that is out of stock and price increases, memory that continues to increase in price, or CPU that remains high, all seem to indicate that this year is not the best time to install.
So, is now a more suitable time to buy memory? Xiao Lei believes that considering the current trend of memory price increases, if consumers do have a hard demand for memory, they should hurry up and start. Otherwise, the longer and later, the price of memory may rise higher and higher, and it may be more embarrassing to buy at that time.