Nomura anticipates that in 2024, DRAM prices will increase by a single digit from month to month, and the average sales price of HBM3E/HBM3 may increase by 10-20%. If HBM squeezes DRAM supply, DRAM prices may rise more than 50% from the current low.
Driven by AI demand, the memory market was “not weak” during the traditional off-season in the first quarter, and the price increase exceeded market expectations.
South Korea's semiconductor production surged 65.3% year on year in February, the highest record since 2009. Analysis estimates that memory exports in April will increase by more than 100% year on year.
According to the report by Nomura Securities on Monday, the memory market may be in a super cycle, and the first quarter ushered in a sharp rise in volume and price:
In terms of price, in the first quarter of 2024, the increase in memory prices exceeded market expectations. The average DRAM hybrid sales price increased by more than 20% month-on-month, while the NAND price jumped 25-30%. It is expected that the price will continue to rise in the second quarter (2Q24F).
In terms of shipments, exports of semiconductors and memory increased by 5% and 12%, respectively, in the first quarter. Although DRAM shipments are expected to drop by about 15% month-on-month, commodity prices are expected to increase by 15-20% month-on-month. According to our estimates, the average sales price of the mixture, including HBM, increased by more than 20% month-on-month.
NAND shipments are likely to remain stable, but prices will rise significantly by 25-30%. According to product classification, AI servers have extremely strong demand for HBM, and the memory demand for enterprise SSDs is also growing. Demand for mobile DRAM/NAND is relatively weak, while PC memory and SSD demand is expected to rise in the second half of 2024 as AI PC sales increase.
Looking ahead to this year, Nomura anticipates that memory prices will continue to rise this year
The price of 2Q24F DRAM will increase by a single digit to 10% month-on-month. High price growth slowed in the first quarter, but it is still higher than what we think the market expected. The mixed average selling price is also likely to increase by 10-20% due to the expansion of the supply of high-premium HBM3E/HBM3 (high-bandwidth memory). Despite the recovery in the utilization rate of some NAND vendors, we believe NAND prices will also increase by more than 10% month-on-month.
Increased competition at HBM is expected to limit the supply of commodity DRAM and drive commodity prices higher. Hynix and Micron have obtained HBM3E certification, and Samsung is also carrying out relevant certification. Due to increased competition in the industry, HBM capacity growth is likely to exceed expectations, which may cause DRAM prices to increase by more than 50% at the bottom of 2Q24F.
Nomura maintained purchase ratings for SK Hynix and Samsung Electronics, and although market expectations for memory companies' earnings are rising, they are still below Nomura's expectations. Nomura believes that given AI companies' technological advancements and better-than-expected commercial usage, the future performance of the memory market may be more optimistic than the market's current expectations.
Editor/Somer