DRAM industry faces further decline, falling revenues and prices

The DRAM market has seen a sharp decline in recent quarters, and this trend looks set to continue. TrendForce reports that the DRAM market experienced a severe quarter-on-quarter drop of 21.9%, bringing total revenue down to US$9.663 billion.

DRAM industry’s steep decline worries many companies

This is the third consecutive quarter that the sector recorded sharp drop in sales. A number of factors contributed to this decline, but a prolonged problem of oversupply was a significant factor. continued price decline as you can see in our selection of the best ram memories. Samsung, Micron and SK Hynix, the three largest suppliers, announced a drop in quarterly sales.

Samsung recorded a reduction in shipment quantities and average selling price due to lower orders for its recently launched products, resulting in a quarter-on-quarter drop in sales of 24.7%, or US$4.17 billion.

On the other hand, Micron benefited from an increase in shipment growth, but still felt the effects of the slowdown, citing a 3.8% drop in revenues, bringing its total to US$2.72 billion. SK Hynix suffered the biggest loss, with a reduction of over 15% in shipment volume and ASP, resulting in a significant drop in revenues of 31.7%, or around US$2.31 billion.

TrendForce DRAM Q2 2023

In addition to information on the best-known suppliers, TrendForce has also provided data on Taiwanese manufacturers who are in the process of acquiring a more prominent position in the sector.

As for Taiwanese suppliers, Nanya faced a drop in shipments for the fourth consecutive quarter, with first-quarter revenues down 16.7%. Major processing nodes remained stagnant at 20 nm, lagging behind the Big Three, resulting in a substantial drop in operating profit margins to -44.9%. There is a glimmer of hope, however, as demand for TV IC replenishment is expected to lift second-quarter utilization rates from 70% to 80%. Despite receiving several emergency orders for notebooks and TVs in the first quarter, Winbond recorded an 8.8% drop in sales as prices continued to fall.

Against a backdrop of falling prices and sluggish demand, PSMC recorded a 12.3% drop in quarterly sales in the DRAM memory sector. The company’s financial performance is mainly linked to its own consumer DRAM products, to the exclusion of revenues from its DRAM foundry services. However, if foundry service revenues were included, the company’s quarterly decline would steepen to 22.6%.

TrendForce has also predicted DRAM industry revenues for the second quarter, and the forecasts are not good. Here’s an overview:

TrendForce’s earlier prediction that the Big Three would move from profitability to loss in Q1 23 due to a rapid decline in ASP has come true. With DRAM prices continuing to fall, second-quarter operating margins are expected to remain in the red. In response, the three main suppliers have begun to implement production cuts, with second-quarter capacity utilization rates expected to fall to 77% for Samsung, 74% for Micron and 82% for SK Hynix.

The DRAM market has grown steadily due to disruptions in demand and supply chains. We hope that the situation will improve, but the latest economic indicators suggest that the road ahead will be rocky for the industry.