DRAM prices slide as the semiconductor industry starts to decline

Memory manufacturers are also continuing production cuts into 2024 as they are still facing a red wall of losses despite decreasing inventories, Digitimes noted.

TSMC decreasing prices

TSMC is reported to be cutting production runs on its mature process nodes as a glut of older chips in the market is putting downward pricing pressure on DDR4.

Wafer foundries in Taiwan are preparing for intense competition from their Chinese and South Korean counterparts by adopting flexible pricing strategies and planning a 10% price cut in response to the expected completion of 32 advanced wafer fabs in China by next year, amidst a market that favors buyers, Taiwan’s Commercial Times reported.

Counterpoint Research Associate Director Brady Wang couldn’t confirm the reports of pricing cuts, but he did say that it’s well-known in the industry that mature manufacturing processes are currently in oversupply while their demand hasn’t increased.

“Foundries offering these mature technologies face pressure to lower prices. TSMC, as the industry leader is known for superior product quality, would only reduce prices if their clients believe the price quote gap is big enough to outweigh the benefits of its quality,” Wang said. A reduction in TSMC’s mature capacity pricing, which contributes about 17% to its total revenue, is unlikely to significantly impact TSMC, as it mainly derives its margin from advanced processes, Wang explained.