Memory chip prices surge 23% following Japan’s export curbs

Hwang Soon-min and Kim Hyo-jin

The cut in Japanese chemical supplies for Korean chip and display production has changed the direction ? at least for the time being ? of prices of memory chips mired in a cyclical downturn as companies rushed to stock up inventories in fear of output disruption from the world’s two largest memory chipmakers.

Prices of mainstream DDR4 8-gigabyte DRAM memory chips averaged $3.74 on July 19, gaining 23.3 percent in two weeks, according to DRAMeXchange, a semiconductor market research firm.

Spot prices of DRAM chips that power personal computers averaged $3.03 on July 5, a day after Tokyo enforced export controls on Korea of materials used to make semiconductors and displays. Prices jumped to $3.26 in a week and to $3.74 a week later.

Over the same period, prices of the lower-spec DDR3 4Gb DRAM also surged 25 percent to $1.42. Solid state drives and 64Gb multi-level cell NAND flash memory chips used in USB drives saw prices climb 6.1 percent from $2.35 to $2.49.

The tightened restrictions require Japanese exporters to apply for permission for every Korea-bound shipment of photoresists, hydrogen fluoride and fluorinated polyimides, all key materials in making semiconductors and displays. Japanese firms reportedly make up 90 percent of the photoresist market and 70 percent each of the fluorinated polyimide and hydrogen fluoride markets.

Korean chipmakers are responsible for more than 70 percent of global DRAM supplies and nearly half of flash memory chips.

In addition to Japan’s trade barriers, some experts say the power failure in the Japanese chipmaker Toshiba’s plant in Yokkaichi province last week may also have played a role in driving up memory chip prices.

Market observers, however, expect the price surge to be short-lived. They point out that the two materials subject to the curbs ? photoresist and hydrogen fluoride etching gas ? are used mostly in non-memory chips and not memory chips, which are the mainstays of Korean chipmakers. Experts say the unexpected export controls have temporarily lifted memory chip prices amid fears that they may spill over to the broader semiconductor market.

“The surge in DRAM spot prices from the recent curbs accounts for just 10 percent of total DRAM prices, with 90 percent driven more by industry demand for servers and smartphones,” said DRAMeXchange.

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