On April 9th, news broke that in the early hours of April 3rd, a 7.3 magnitude earthquake, along with numerous significant aftershocks, struck off the coast of Hualien County, Taiwan. This event resulted in severe damage and has also had a considerable impact on the semiconductor industry, particularly concerning the inevitable rise in prices of DRAM memory.
Following the earthquake, Micron swiftly halted the announcement of second-quarter DRAM product pricing, with SK Hynix and Samsung promptly following suit.
Micron also declared that it would conduct further assessments on the earthquake's impact on production capacity and supply before engaging in discussions with customers regarding supply conditions.
Industry insiders note that after such a strong earthquake, semiconductor fabs typically suspend or temporarily delay at least some production lines, inevitably leading to supply constraints.
In fact, after experiencing two years of sustained low prices, DRAM memory manufacturers had been deliberately controlling production capacity in hopes of quickly restoring prices. The trend of price hikes was already evident before the earthquake.
According to a report from TrendForce, the price of DRAM memory chips surged by up to 20% in the first quarter of this year, with an expected further increase of 3-8% in the second quarter. With the earthquake presenting this "opportunity," memory manufacturers are naturally unlikely to let it slip by easily.
Furthermore, memory module manufacturers currently have generally low inventory levels. With limited upstream production capacity, they are bound to increase procurement expenditures. Downstream customers such as server manufacturers will also seize the opportunity to stock up, further driving prices higher.
Moreover, NAND flash prices have been steadily rising, with an overall increase of 23-28% in the first quarter and an expected further rise of 13-18% in the second quarter. This increase is even more pronounced compared to memory, reflecting in the SSD market where prices for some products have even doubled.
