DRAM prices expected to increase by 60% in the second quarter... Demand surges amid AI boom

While demand for memory is rapidly increasing due to the global artificial intelligence (AI) boom, Taiwanese market research company Trend Force announced that DRAM prices are likely to increase by about 60% in the second quarter.

According to Taiwanese media such as the Free Times on the 2nd, Trend Force announced the previous day that the focus of cloud service companies (CSPs) on building data centers is also changing as the use of AI is shifting from large language model (LLM) training to inference applications.

Trend Force explained that as CSPs shifted their focus from AI-specific servers to general-purpose servers when building data centers, demand for memory expanded from HBM3E (5th generation), LPDDR5X, and large-capacity RDIMM to RDIMM products of various capacities.

It was predicted that it would be difficult to meet the demand from PC companies (OEMs) and smartphone manufacturers as DRAM suppliers' inventory levels in the second quarter were very low and production of large capacity RDIMMs for AI servers was prioritized.

At the same time, he pointed out that as CSP shows a relatively flexible stance on price increases, other customers will also accept price increases for supply stability.

Accordingly, Trend Force predicted that existing DRAM contract prices will rise by 58-63% quarterly in the second quarter of this year.

Trend Force reported that Taiwan's Nanya Technology, Winbond, and PSMC are focusing on mature process products to fill the market gap created by the top three companies, including Samsung Electronics, SK Hynix, and Micron of the United States, focusing on cutting-edge process technology.