Recent projections from Kiwoom Securities have heightened concerns surrounding the DRAM market, with researchers suggesting that significant price drops are expected by the end of this year and into early next yearThis warning comes on the heels of substantial declines in the prices of DRAM products, which serve as crucial components in a variety of information technology devices including personal computers and smartphones.

Data published by the market research firm DRAMeXchange indicates that by the end of November, the average trading price for general-purpose PC DRAM products (specifically DDR4 8Gb 1Gx8) dwindled to approximately $1.35. This marks an alarming drop from July's price of $35.70, illustrating a decrease of roughly 2.1%. Analysts attribute this stark decline to several unfavorable factors affecting both supply and demand, prompting broader anxieties regarding its repercussions on the overall economy.

Despite the ongoing digital transformation globally, the recovery in demand for IT devices has yet to materialize

Major companies in the industry have started to offload their DRAM inventory in light of sluggish salesMeanwhile, Chinese manufacturers have ramped up their supply activities, significantly impacting the competitive landscapeWhile these companies have not yet closed the gap in advanced products such as high bandwidth memory (HBM) against South Korea, they are making notable advances in traditional DDR4 productsIt has been reported that the price of DDR4 8Gb DRAM from Chinese memory firms is around $1, roughly half the prevailing market price.

Park Yoo-ak, a researcher at Kiwoom Securities, anticipates that the dramatic price decline of DRAM by year-end and early next year could surpass expectationsHe highlighted that as Chinese memory firms sell their products at lower prices, the supply growth rate for DRAM could outpace demand growth, a trend that is likely to persist until at least the second quarter of the following year

Another corporate leader echoed this sentiment, warning that fluctuations in DRAM prices could negatively affect the financial performance of leading companies such as Samsung Electronics, potentially even impacting tax revenues.

As of November, the average fixed trading price for DDR5 16Gb products designed for PCs had fallen to $3.90, down from $4.05 in October, indicating a 3.7% decrease and a 16.1% annual decline from $4.65 in JulyAnalysts are increasingly concerned that if semiconductor prices continue their accelerated drop, the negative effects could amplify on the broader economyIf companies like Samsung face prolonged poor performance, it could jeopardize the hundreds of trillions of Korean won in annual facility investment plans within the country’s memory industry, potentially leading to an overall domestic economic contraction.

A semiconductor industry insider has pointed out the potential risks of a downturn coinciding with the current trend, suggesting that such overlap could deliver a significant blow to the economy

He emphasized that management teams must take proactive measures to address uncertainties surrounding business operations.

The current state of the DRAM market signals a challenging landscape ahead, with continuing price declines anticipated into the early part of next yearGiven that South Korea's economy heavily relies on the semiconductor sector, these developments are of considerable significance.

In a broader context, South Korea's information and communication technology (ICT) product exports experienced a remarkable uptick, with a sustained growth streak of 11 months as of SeptemberAccording to statistics assembled by the Ministry of Science and ICT, South Korea’s ICT exports hit $22.4 billion in September, rising 24% from $18.04 billion compared to the same month last year, marking the second-highest figure since March 2022.

Delving into specific categories, semiconductor exports skyrocketed by 36.3% year-on-year to a historic high of $13.6 billion in September, achieving double-digit growth for 11 consecutive months

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This surge underscores the semiconductor sector's dominance, which accounted for a staggering 60.9% of total ICT exports, up from 57.7% in August.

Additionally, the export volume of storage chips rose by 60.7% year-on-year to reach $8.7 billion, a sharp increase compared to $7.29 billion in AugustThis surge is attributed to the growing demands fueled by investments in artificial intelligence servers, alongside high-value products like HBM.

The realm of computer and peripheral device exports also witnessed a robust growth spurt, increasing by 104.8% year-on-year to $1.64 billion primarily due to an uptick in SSD exportsThe smartphone sector continued its momentum, with sales reaching $1.71 billion, marking three consecutive months of double-digit growthHowever, declines were noted in display and communication device exports, which fell by 5.1% and 28.7%, respectively, to $1.9 billion and $160 million.

October’s figures confirmed South Korea's ICT export reached $20.8 billion, with imports clocking in at $13.33 billion, resulting in a trade surplus of $7.47 billion

The semiconductor export figures for October dipped slightly to $12.55 billion, a 39.9% increase from the previous year but reflecting a 7.7% drop compared to September, driven by the growing AI infrastructure investment market.

November saw South Korea’s exports rise by 1.4% year-on-year, totaling $56.35 billion, as the semiconductor exports remained robustData from the Ministry of Trade, Industry, and Energy indicates that imports fell by 2.4% to $50.7 billion, maintaining a trade surplus of $5.61 billion for the 18th consecutive monthWhile the export growth rate has been gradually declining since August, it is noteworthy that the country has sustained over a year of export growth.

Breaking down the November statistics further, semiconductor exports surged by 30.8% year-on-year to $12.5 billion, maintaining a streak of 13 months of growth while also setting a record for the highest monthly figure for four straight months