Memory Chip Prices Set to Nearly Double in Q1, TrendForce Warns
SEOUL, Feb 2 (Reuters) – The global electronics sector is bracing for a significant cost shock as a severe shortage of memory chips triggers unprecedented price hikes. Leading market research firm TrendForce issued a stark revision on Monday, now forecasting that contract prices for conventional DRAM chips will surge between 90% and 95% in the first quarter of 2025 compared to the final months of 2024.
The dramatic adjustment points to a deeper and more persistent supply-demand imbalance than previously anticipated. Industry analysts link the crunch to a combination of factors: sustained production cuts by major manufacturers initiated in late 2023 to stabilize prices, unexpected yield issues in the transition to more advanced manufacturing nodes, and stronger-than-expected demand from server and PC markets recovering from a prolonged downturn.
"This isn't a typical cyclical adjustment; it's a perfect storm of constrained supply meeting resurgent demand," said a senior analyst at TrendForce, who spoke on condition of anonymity ahead of the full report's publication. "The 90-95% quarterly increase is extraordinary and will have cascading effects across consumer electronics, data centers, and automotive manufacturing."
The price surge is expected to squeeze margins for device makers and could lead to higher retail prices for smartphones, laptops, and other electronics by mid-year, potentially dampening consumer demand during a fragile economic recovery.
Industry Voices React
Michael Chen, Procurement Director at a Taipei-based PC OEM: "We saw this coming, but the scale is brutal. Our quarterly cost projections are now obsolete. We're accelerating negotiations and might have to reconsider our product launch timelines for the second half of the year."
Sarah Johnson, Tech Analyst at Greenleaf Capital: "This validates our investment thesis on memory leaders like Samsung and SK Hynix. Their disciplined capacity management is finally paying off. While painful for buyers, this price rebound is crucial for the long-term health and R&D investment capacity of the semiconductor memory sector."
David Park, Founder of 'Consumer Tech Watch' Blog: "It's outright profiteering. Manufacturers cut production to artificially inflate prices, and now every company and consumer gets gouged. This will kill innovation in affordable devices and hurt everyone except the chip giants' shareholders. Regulators should be looking at this."
Priya Mehta, Supply Chain Manager at a European Data Center Firm: "The impact on our operational expenditure is immediate and severe. We're exploring every option, from renegotiating long-term contracts to optimizing our memory allocation per server. This volatility makes long-term planning incredibly difficult."
(Reporting by Hyunjoo Jin; Additional reporting and analysis by Reuters Global Tech Desk)