The Global Semiconductor Market Goes through a Chaotic State Despite Increased Demands and Prices

Mar 23, 2020

Prices of memory and system semiconductor rose at the same time despite COVID-19. It is seen that the price of spot transaction of key memories between January and March has been rising and that foundry sales have also been on an upward trend. However, the global semiconductor market is seem to be going through a chaos as the upward trend of the DRAM price has recently slowed down and critical signals coming from COVID-19 have been detected.
According to a market research company called DRAMeXchange’s data, spot prices of key DRAMs and NAND flash memories had risen consistently between January 2nd and March 19th. In case of DRAM, prices of DDR4 memories that are mostly used for PC and server had risen consistently. The price of DDR4 8Gb DRAM jumped 16% from $3.03 to $3.527. The price of DDR4 4Gb DRAM jumped 26% from $1.76 to $2.227.
The price of 8Gb DRAM plunged to $2 in the second half of 2019 after it skyrocketed to $9 in 2018 as the global memory semiconductor was going through a super up-phase. However, it has shown a “V-shaped” trend despite the COVID-19 situation as demands for DRAMs started to reappear earlier this year. “Increased online education and working from home have been led to increased demands for server DRAM.” said Park Yoo-ak who is an analyst from Kiwoom Securities.
Sales of foundries that fabricate the designs of system semiconductors from other companies also increased. DRAMeXchange estimated that the amount of sales from the global foundry industry in this first quarter will be $18.06 billion that is 31.5% higher than the amount of sales from last first quarter. Growth of TSMC, which is responsible for the majority of the global foundry market, has had huge impact on the overall sales. It is estimated that the amount of sales of TSMC in this first quarter will be 43.7% higher than the amount of sales from last first quarter.

Semiconductor wafer (Reference: SEMI Korea) <Semiconductor wafer (Reference: SEMI Korea)>

As COVID-19 has been spreading uncontrollably, unusual signs have been detected from various parts of the global semiconductor industry. The spot price of DDR4 8Gb DRAM that went up to $3.61 on the 11th recorded $3.527 on the 19th after the collapse of the global stock market. The fact that the U.S., where 65% of global fabless companies is located, has been under the influence of COVID-19 has built up anxieties. LAM Research, an American semiconductor equipment maker, decided stop operating its Fremont Headquarters and its plant in Livermore until the end of this month. Setbacks to technological cooperation between semiconductor companies and electronics companies are also expected as the U.S. Government ordered its nationals from travelling overseas on the 19th.
“It is expected that this situation will become even worse as global supply networks have been paralyzed.” said a representative for South Korea’s semiconductor components industry. “Although semiconductor equipment makers will be able to manufacture their products with parts and components that are in their inventories until the end of the first half, it will not be easy for them to hold out much longer afterwards if there is lack of supplies in the second half.”
Staff Reporter Kang, Hyeryung | kang@etnews.com

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