The Chip Insider® – DRAM Super-Cycle?

Questions & Answers: DRAM market Super-Cycle? No and Yes: Economists define a super-cycle as a long-term period of sustained expansion that often lasts for decades. So the quick answer is no. Super-cycles are the result of meta-drivers that define these periods… Examples from the last century include electrification, autos, and microelectronics… Most people today believe that AI will be a super-cycle, for which memory and microelectronics are along for the ride as enablers… the yes answer… the industry is experiencing a major shortage of DRAM. In some ways, this is a classic reversal coming off the 2023 chip glut, where in 1Q23 there was a massive 31 weeks of memory inventory… conditions returned to normal by 2024. That’s where the super-cycle question gets interesting.

That’s because DRAM ASP increases, which include HBM, peaked in 2024 and have steadily declined …Yet, DRAM spot price-per-bit started to soar last May … Normally… This difference highlights a structural bifurcation that has occurred in the DRAM market. Ten years ago, I was predicting the rise of a new memory market opportunity: High Bandwidth Memory. Never in my wildest dreams did I see it disrupting the structure of the memory market...

The current dynamics between the HBM AI chip market and the PC/mobile refresh demand have never been seen before. AI is the super-cycle side of the argument … With HBM being custom and thus, having an inherently higher price landscape, it’s redefining the memory market in ways that have yet to be fully revealed. Add to this the emergence of flash into the market. So you have HBM-D and HBM-F for DRAM and Flash versions…

You may recall that Samsung, SK Hynix, and Micron had been talking about ending DDR4 production. It has not happened. This makes sense, given the DRAM shortage has driven DDR4 prices higher than DDR5. Samsung had planned… SK hynix planned… Micron plans… With 20:20 hindsight, one could say the industry was caught off guard… President Trump promises to raise tariffs… hit in April 2025... very dark storm clouds, causing reasonable expectations of a … market slowdown in the second half. Hence, plans for ramping down DDR4 production … I'll be surprised if LTSAs return (Long Term Supply Agreements). If it does, it won’t be permanent… Leopards never change their spots… Customers never lose a thirst for lower prices.

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