DRAM Industry Revenue Surges 24.8% Q/Q in 2Q24 at $22.9 Billion

Published on August 15, 2024, this market report was written by TrendForce Corp.

The DRAM industry saw a significant revenue increase to $22.9 billion in 2Q24 – a Q/Q growth of 24.8%. This surge was driven by expanded shipments of mainstream products that boosted revenue for most manufacturers. Contract prices remained on an upward trend in 2FQ24, and due to geopolitical factors, the increase in conventional DRAM contract prices for 3FQ24 is now expected to exceed previous forecasts.

Key players Samsung, SK hynix, and Micron all reported increased shipments in 2Q24 compared to 1Q24. ASP also continued to rise following the 1FQ24’s trend. Contributing factors included the earthquake that struck Taiwan in early April and the high demand for HBM products, which shifted DRAM buyers toward more aggressive procurement strategies. Consequently, 2Q24 contract prices saw a final adjustment of 13%-18%.

Samsung benefited from a 17%-19% increase in ASP, with bit shipments also rising slightly, leading to revenue growth for DRAM of 22% to $9.82 billion as the company maintained its market-leading position.

SK hynix saw its bit shipments increase by over 20% – driven by the certification and mass shipment of its HBM3e products—resulting in a substantial revenue increase of 38.7% to $7.91 billion.

Micron’s 2Q24 revenue rose by 14.1% to $4.5 billion despite a slight decrease in ASP, as bit shipments grew by 15%-16%. However, the company’s aggressive clearance of low-cost 1-beta nm DDR5 inventory in 2Q24 caused it to lag behind its major competitors.

In terms of profitability, the rise in DRAM contract prices, full utilization of production capacity, reversal of inventory write-down losses, and higher sales of premium products such as DDR5 and HBM allowed manufacturers to maintain profitability in 2Q24.

Samsung’s operating profit margin increased from 22% in 1Q24 to 37%, SK hynix saw a rise from 33% to 45%, while Micron’s operating profit margin improved from 6.9% to 13.1% due to lower contributions from HBM products.

Taiwanese manufacturers showed varied performances in 2Q24. Nanya Technology experienced a slight decline in shipments due to weaker consumer DRAM sales, but higher ASPs improved its operating margin from -30.7% to -23.4%. Winbond increased contract prices for high-density products and boosted ASP by 24%–26%. This led to a 3.7% Q/Q revenue growth to $168 million, which was also driven by higher sales of low-density, high-priced products. PSMC saw a 13.5% decline in consumer DRAM revenue but a 2.2% increase in total revenue when including foundry services that reflected their clients’ proactive inventory buildup.

Upward revision of 3Q24 DRAM contract prices reflects geopolitical factors
Most DRAM manufacturers concluded 3Q24 contract price negotiations with PC OEMs and CSPs in late July 2024, with results exceeding expectations. Consequently, TrendForce has revised the 3Q24 contract price increase for conventional DRAM to 8%-13% – approximately 5 percentage points higher than the previous forecast.

Chinese CSPs have been fearing new US sanctions on their AI chips or memory purchases since 2Q24. In response, they have been aggressively stockpiling, doubling their procurement scale compared to the same period last year. This has driven DRAM manufacturers to lock in higher prices and pressured US CSPs to adjust their procurement prices upward. The increased server DRAM prices have also positively impacted negotiations for PC DRAM contract prices.

Furthermore, Samsung has started producing HBM3e wafers in its factories to ensure timely shipments following HBM3e product verification. This will likely affect DDR5 production schedules for 2H24. Manufacturers are finalizing their 2025 capacity plans, with SK hynix and Samsung prioritizing HBM production over DDR5, indicating that DRAM prices are unlikely to fall in the coming quarters.