Memory chip prices expected to remain in freefall through the first half of 2023

In short: Reminiscence chip costs are anticipated to proceed their downward trajectory via the primary half of 2023, and maybe past. Market intelligence supplier TrendForce advised The Wall Avenue Journal that DRAM costs are more likely to slide by 20 p.c within the first quarter and 11 p.c in Q2. NAND flash costs, in the meantime, are predicted to drop 10 p.c and three p.c in Q1 and Q2, respectively.

Within the trailing three-month interval (October-December 2022), DRAM and NAND flash costs dipped 23 p.c and 28 p.c, TrendForce mentioned.

Reminiscence chip pricing peaked throughout Covid because of robust demand for shopper electronics however began trailing off close to the top of 2021. Rising rates of interest mixed with geopolitical uncertainties from the Russia-Ukraine battle and sporadic Covid lockdowns in China solely made issues worse in 2022.

The analysis agency believes a mix of excessive rates of interest, rising inflation and weak world economics will proceed to influence shopper and company spending on gadgets like smartphones, PCs and servers over the approaching months, all of which make the most of each sorts of reminiscence. The scenario may put extra stress on a tech business that’s already battling scaled-back investments and job cuts.

Earlier this month, Samsung warned that working revenue for the October-December quarter is predicted to fall 69 p.c in comparison with the identical interval a 12 months earlier. Analysts with FactSet expect reminiscence chip maker SK Hynix to report a fourth quarter lack of about $661 million later this week. Intel in its most up-to-date quarter reported a income dip of 32 p.c 12 months over 12 months.

How lengthy the downturn lasts is usually depending on how shortly shopper spending ramps again up. Smartphone demand was weak through the holidays however maybe Samsung can jump-start gross sales in 2023 with a brand new wave of merchandise anticipated to be introduced throughout its Unpacked occasion on February 1. Nothing has additionally confirmed plans to deliver its subsequent flagship to the US later this 12 months, and Apple’s iPhone 15 is sort of definitely coming in September.