In the trailing three-month period (October-December 2022), DRAM and NAND flash prices dipped 23 percent and 28 percent, TrendForce said. Memory chip pricing peaked during Covid thanks to strong demand for consumer electronics but started trailing off near the end of 2021. Rising interest rates combined with geopolitical uncertainties from the Russia-Ukraine war and sporadic Covid lockdowns in China only made matters worse in 2022.
The research firm believes a combination of high interest rates, rising inflation and weak global economics will continue to impact consumer and corporate spending on devices like smartphones, PCs and servers over the coming months, all of which utilize both types of memory. The situation could put additional pressure on a tech industry that is already struggling with scaled-back investments and job cuts. Earlier this month, Samsung warned that operating profit for the October-December quarter is expected to fall 69 percent compared to the same period a year earlier. Analysts with FactSet are expecting memory chip maker SK Hynix to report a fourth quarter loss of about $661 million later this week. Intel in its most recent quarter reported a revenue dip of 32 percent year over year.
How long the downturn lasts is mostly dependent on how quickly consumer spending ramps back up. Smartphone demand was weak during the holidays but perhaps Samsung can jump-start sales in 2023 with a new wave of products expected to be announced during its Unpacked event on February 1. Nothing has also confirmed plans to bring its next flagship to the US later this year, and Apple’s iPhone 15 is almost certainly coming in September.
