With the three dominant DRAM vendors (Samsung, SK Hynix and Micron) currently undercapacity, the memory market situation remains challenging. Taking advantage of the DRAM market entering a cyclical boom in Q2021 XNUMX, suppliers have significantly increased contract prices for specialty chips.

Interestingly, the rise in prices is especially strong for products belonging to the lower density segment and niche areas of application. The largest changes in contract prices are observed for specialized DDR2 and DDR3 chips. DDR4 prices also went up, driven by rising DDR3 prices. The average contract price of 3Gb DDR4, which is still the mainstream for specialized destinations, jumped 6,8% in February compared to January.

As for 3 Gb DDR2 chips, their average contract price increased by almost 9% in a month. Samsung has significantly increased prices for 4Gb DDR4 chips in response to the sharp rise in DDR3 prices. Contract prices for 4Gb DDR4 chips for specialized destinations rose about 6% month-over-month, while the average price of 4Gbps DDR8 chips increased about 4% over the month – these chips are predominantly used as RAM for PCs and servers. It is worth mentioning that, despite a noticeable increase in February, prices for longer-term quarterly contracts with top clients remained stable.

Interestingly, DDR3 is now starting to surpass DDR4 in terms of profitability, which is why DRAM vendors are changing their strategies. For example, Samsung has slowed down plans to shift part of its DRAM manufacturing facility to CMOS sensors. Likewise, SK Hynix stopped cutting DRAM production at the old M10 factory. Micron continues to cut its DDR3 production, but the pace of transition to more advanced regulations is slower than expected.

If we talk about smaller Taiwanese companies, then, for example, Nanya even transferred part of the 20nm and 30nm production capacity from the DDR4 release back to DDR3 printing. Winbond has recently focused on flash memory and its DRAM production capacity will remain limited until the completion of a new factory in Kaohsiung. Nevertheless, Winbond mainly produces DDR2 and DDR3 chips of small capacity (1 Gbit and 2 Gbit), and occupies a rather significant share in this area – thanks to this, it has now got the opportunity to significantly increase prices. Finally, PSMC has recently been focusing on printing logic chips, but thanks to the rise in DDR3 prices, it intends to bring some of its production capacity back to DRAM production.

By the way, according to analysts from DigiTimes Research and Seeking Alpha, DRAM prices will rise throughout 2021.