DRAM Price Decline Accelerates: Downward Pressure on the Market to Continue Through 2025

DRAM Price Decline Accelerates: Downward Pressure on the Market to Continue Through 2025The fourth quarter is a critical period for DRAM industry contract pricing, and market dynamics are undergoing significant changes. According to the latest report from TrendForce, the decline in DRAM prices is accelerating, driven by a double whammy of oversupply and weak demand

DRAM Price Decline Accelerates: Downward Pressure on the Market to Continue Through 2025

The fourth quarter is a critical period for DRAM industry contract pricing, and market dynamics are undergoing significant changes. According to the latest report from TrendForce, the decline in DRAM prices is accelerating, driven by a double whammy of oversupply and weak demand. This is particularly evident in more mature processes like DDR4 and LPDDR4X, which are already experiencing price drops. Even advanced processes such as DDR5 and LPDDR5X, while facing uncertain demand prospects, are at risk of price declines.

TrendForce's report points to oversupply as a primary cause of the price drop. Mature process DDR4 and LPDDR4X products are in ample supply, while demand continues to weaken, leading to sustained price declines. Meanwhile, the demand outlook for advanced processes like DDR5 and LPDDR5X remains unclear, and high inventory levels for some buyers and sellers are further exacerbating price pressure. This suggests a further increase in the likelihood of DRAM price declines by the end of the fourth quarter.

Wu Yating, Senior Research Vice President at TrendForce, analyzed the current market situation and adjusted the firm's forecast for future DRAM price trends. Previously, TrendForce held a relatively optimistic outlook for 2025 DRAM prices, citing factors such as the three major suppliers' active expansion of HBM capacity and the expectation that new factories wouldn't reach mass production until 2026. However, recent rapid market changes, especially persistent weak demand, have forced TrendForce to reassess the market outlook.

The new forecast predicts a decline in DRAM prices in 2025, with a more significant drop expected in the first half of the year. DDR4 and LPDDR4X will face greater downward pressure, with anticipated price declines exceeding those of DDR5 and LPDDR5X. This forecast revision directly reflects the imbalance in market supply and demand, as well as intensified market competition.

Wu further highlighted that excessively rapid industry capacity expansion is a significant contributor to oversupply. Manufacturers, vying for market share, have aggressively invested in and expanded capacity, leading to a rapid increase in market supply in the short term. However, persistently weak consumer electronics demand has further exacerbated the supply-demand imbalance. The contraction in consumer demand has directly reduced the demand for DRAM chips, intensifying market competition and ultimately driving down prices.

Unless DRAM manufacturers effectively control capacity and proactively respond to changing market demands, overall industry inventory destocking will be slower, further increasing downward price pressure and potentially leading to a deeper market adjustment. Therefore, effectively managing capacity and balancing supply and demand has become a pressing issue for DRAM manufacturers.

Current global economic uncertainty and geopolitical complexities are also impacting the DRAM market. Slower global economic growth and declining consumer demand are intensifying the challenges facing the DRAM market. Furthermore, geopolitical tensions could affect the stability of the DRAM supply chain, further increasing market uncertainty.

In summary, the DRAM market is currently experiencing the pain of falling prices, primarily due to a supply-demand imbalance and intensified competition. The downward trend in DRAM prices will continue in 2025, and manufacturers need to proactively adapt to market changes and adjust their capacity strategies to meet future challenges. Mature process products will face greater downward price pressure, while advanced process products, though facing more uncertainty, are also increasingly at risk of price declines. Manufacturers need to be more proactive in capacity control, market forecasting, and technological innovation to secure a favorable position in future market competition. This is a critical time for the entire DRAM industry, requiring careful consideration and proactive strategy adjustments. The rapid pace of market change demands that manufacturers possess sharper market awareness and more flexible response strategies to ensure their survival and growth in this highly volatile environment.

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