This file photo, provided by SK hynix Inc. on Feb. 1, 2021, shows the company's chip plant in Icheon, 80 kilometers southeast of Seoul. (SK hynix Inc.)
Memory chip prices are rising sharply amid a global semiconductor shortage, industry data showed Friday, boding well for South Korean chipmakers that dominate the sector.
The contract price of 8-gigabit DDR4 DRAM, which is widely used in personal computers, reached $3.80 for this month, up 26.67 percent from the previous month, according to TrendForce.
It marks the largest monthly increase since January 2017, when the contract price of the product soared 35.8 percent.
The contract price had been staying nearly flat since rising 5 percent in January, but it made a big leap as chipmakers and major computer makers began negotiating prices for the second quarter in April.
"PC DRAM prices are now expected to undergo a 23-28 percent quarter-on-quarter growth in 2Q21 due to the increased production of notebook computers," TrendForce said in a recent report. "Vaccination rates remain relatively low across the globe, meaning work-from-home and distance education are likely to persist and create continued demand for notebook computers."
The market researcher also expected server DRAM prices to increase by 20-25 percent quarter-on-quarter in the April-June period as companies ramp up their investment for IT systems and cloud migration.
"There was already a supply gap in 1Q21, and these developments will further drive up demand in 2Q21," it said. "Suppliers are in a more advantageous position in contract negotiations since the DRAM market is an oligopoly."
Contract prices for NAND flash chips have also started to go up.
The contract price for NAND 128Gb 16Gx8 MLC jumped 8.57 percent to $4.56 for April after staying flat at $4.20 in the past six months.
TrendForce earlier expected NAND flash contract prices to increase by an average of 3-8 percent on-quarter in the second quarter due to an easing of the oversupply.
Both DRAM and NAND flash are the main products for South Korea's two largest chipmakers -- Samsung Electronics Co. and SK hynix Inc.
They had a combined market share of 71.6 percent for the DRAM sector and 44.5 percent for the NAND industry as of the fourth quarter of 2020, TrendForce data showed.
The two companies presented a rosy outlook for this year's memory market in their conference call earlier this week.
Both projected DRAM demand bit growth to be about 20 percent for this year, while that of NAND flash to be in the mid-30 percent range. (Yonhap)
