Under the drive of AI demand, the memory market in the first quarter, traditionally a slow season, was &#34;not slow&#34;, with prices rising beyond market expectations.
Korean semiconductor production in February increased by 65.3% year-on-year, reaching the highest level since 2009. Analysts predict that memory exports in April will grow by over 100% year-on-year.
In a report on Monday, Nomura Securities suggested that the memory market may be in a super cycle, with both volume and price rising in the first quarter:
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In terms of prices, in the first quarter of 2024, memory prices rose more than market expectations. The blended average selling price of DRAM increased by over 20% compared to the previous quarter, while NAND prices surged by 25-30%, with prices expected to continue rising in the second quarter (2Q24F).
In terms of shipments, semiconductor and memory exports in the first quarter increased by 5% and 12% respectively compared to the previous quarter. Although DRAM shipments are expected to decrease by about 15% compared to the previous quarter, prices are expected to rise by 15-20%. According to our estimates, including HBM, the blended average selling price increased by over 20%.
NAND shipments may remain stable, but prices are expected to rise significantly by 25-30%. Demand for HBM from AI servers is strong, and enterprise SSD memory demand is also growing. Mobile DRAM/NAND demand is relatively weak, while PC memory and SSD demand are expected to increase in the second half of 2024 with the growth of AI PC sales.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/d97b4236-73d2-4103-ae5f-01eb71dd10da.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/d97b4236-73d2-4103-ae5f-01eb71dd10da.png"/>
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Looking ahead to this year, Nomura predicts that memory prices will continue to rise
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In 2Q24F, DRAM prices are expected to increase by a high single-digit to 10% compared to the previous quarter. The high price growth in the first quarter may slow down, but it is still higher than market expectations. With the expansion of supply of high-premium HBM3E/HBM3 (high-bandwidth memory), the blended average selling price may also increase by 10-20%. Despite the recovery of utilization rates for some NAND manufacturers, we believe that NAND prices will also increase by over 10% compared to the previous quarter.
Intensifying competition for HBM is expected to limit the supply of commodity DRAM and drive up prices. SK Hynix and Micron have obtained HBM3E qualification, and Samsung is also undergoing relevant qualification certification. Due to intensified industry competition, the growth in HBM capacity may exceed expectations, leading to a more than 50% increase in DRAM prices at the bottom of 2Q24F.
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Nomura maintains a buy rating on SK Hynix and Samsung Electronics. Although market expectations for memory company earnings are rising, they are still below Nomura's expectations. Nomura believes that given the better-than-expected technological progress and commercial utilization of AI companies, the future performance of the memory market may be more optimistic than the current market expectations

Nomura expects that in 2024, DRAM prices will increase by a high single-digit percentage to 10% on a quarter-over-quarter basis. The average selling price of HBM3E/HBM3 may increase by 10-20%. If HBM squeezes DRAM supply, DRAM prices could rise by over 50% from the current low point

Rising volume and price, is the super cycle of memory coming?