By KERRY SMITH
Market outlook uncertainty and bold purchasing strategies are resulting in price hikes by suppliers of semiconductors.
According to January 2024 TrendForce data, contract prices for DRAM (dynamic random-access memory) and NAND Flash (flash memory that is non-volatile and doesn’t require any power to keep data in it) chips keep increasing after a low year in 2023 for the memory market.
Aggressive price hikes by suppliers – much of it due to chip manufacturers seeking to offset last year’s losses – is continuing in 2024. Analysts predict a rebound, however, later this year.
U.S. production cuts due to market uncertainty as well as China’s race to boost its domestic chip-making capabilities are impacting the price of product being bought by U.S. customers. According to analysts at Barclays, China’s semiconductor manufacturing capacity is projected to double within the next five to seven years.
Meanwhile, the U.S. USF (universal flash storage) market is seeing prices rise due to limited capacity and critically low smartphone client inventories. According to TrendForce, some UFS series products are seeing price jumps of more than 30 percent.
The demand is manifesting in a U.S. semiconductor chip manufacturing plant construction flurry.
Manufacturing Dive reports that Intel, Texas Instruments and LG Energy Solution are each investing billions of dollars in new chip plants this year. Intel’s $20 billion Ohio One project is bringing an estimated 7,000 construction jobs to Columbus. TI broke ground on its $300 million semiconductor wafer fabrication plant in Lehi, Utah in early November 2023. The plant will be powered entirely by renewable energy. LG Energy Solution’s advanced manufacturing in Queen Creek, Ariz. (a Phoenix suburb) with the goal of beginning production in 2025.