DRAM Market Recovers, Revenue Soars in Q2, Contract Prices Continue to Rise

DRAM Market Recovers, Revenue Soars in Q2, Contract Prices Continue to RiseAccording to the latest research from TrendForce, the global DRAM (memory) industry revenue reached $22.9 billion in Q2 2024, representing a 24

DRAM Market Recovers, Revenue Soars in Q2, Contract Prices Continue to Rise

According to the latest research from TrendForce, the global DRAM (memory) industry revenue reached $22.9 billion in Q2 2024, representing a 24.8% increase from the previous quarter, driven by the expansion of mainstream product shipments. In terms of pricing, contract prices continued to rise in Q2, and the expected price increase for Conventional DRAM in Q3 is now higher than previously anticipated.

Top Three Vendors Remain Profitable, Samsung and SK Hynix Shine

In terms of vendors, Samsung, SK Hynix, and Micron Technology all saw increases in shipments in Q2. The three manufacturers continued the trend of contract price increases from Q1, raising contract prices by 13% to 18% in Q2.

Regarding profitability, TrendForce states that DRAM makers continued to be profitable in Q2 due to rising DRAM contract prices, restored factory utilization rates, a reversal of inventory write-down losses, and increased shipment volume for high-priced products. Samsung's operating margin rose from 22% in the previous quarter to 37%, SK Hynix increased from 33% to 45%, while Micron's operating margin rebounded from 6.9% to 13.1% due to a lower contribution from HBM products.

Q3 Contract Price Increases Exceed Expectations, DRAM Market Outlook Positive

Looking ahead to Q3, TrendForce indicates that most DRAM manufacturers have finalized their Q3 contract prices with PCOEMs (Principal Contract Original Equipment Manufacturers) and CSPs (Cloud Service Providers), revealing price increases higher than expected. Based on this, TrendForce has revised the expected contract price increase for Conventional DRAM in Q3 to 8% to 13%, an increase of about 5 percentage points from the original estimate.

Driving Factors Behind DRAM Market Recovery

The DRAM market recovery is primarily driven by the following factors:

• Demand Side: The continued growth in demand for high-performance memory in areas such as cloud computing, artificial intelligence, and data centers is driving a resurgence in DRAM demand.

• Supply Side: Restored factory utilization rates and a reversal of inventory write-down losses are also supporting the DRAM market recovery.

• Pricing Factors: Industry-wide price competition has gradually eased, with contract prices continuing to rise, enhancing manufacturer profitability.

Conclusion

Overall, the DRAM market demonstrated a strong recovery in Q2, and it is expected to maintain a positive development trend in the foreseeable future. However, with changes in market supply and demand dynamics and the influence of technological innovation, the future of the DRAM market still has some uncertainties.

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