"The semiconductor business is not doing well. The second half of this year is unlikely to be good either, and there's no sign of improvement next year."

These are the words of Kyung-Hyun Kyung, President and Head of Samsung Electronics' Device Solutions Division, at the Pyeongtaek campus on the 7th. With the semiconductor industry entering a downcycle, the prevailing opinion is that the DRAM market is also entering a period of severe cold.

According to market research firm IC Insights on the 20th (local time), monthly DRAM sales decreased as consumer spending decreased due to the global economic downturn and inflation, and DRAM end users adjusted their inventory levels.

The DRAM boom, which began in the second half of 2020, came to an end in May. The DRAM market recorded a 36% decline in June and a further 21% drop in July, leading IC Insights to analyze that the market collapse was steep and rapid. The DRAM market size in July was only half of that in May.

This is attributed to a sharp decline in consumer demand for IT due to concerns about soaring inflation and an economic downturn.

According to TrendForce, the NAND flash market in the second half of the year deteriorated sharply due to oversupply, which led to a sharp adjustment in demand for smartphones and laptops. Global laptop shipments in the second quarter totaled 45.74 million units, a 17.7% quarter-on-quarter decrease and a 24.5% year-on-year decline, marking the lowest single-quarter drop since the COVID-19 pandemic.

This decline in demand for IT devices has negatively impacted not only DRAM but also display shipments, leading to a continued decline in panel shipments and forcing distribution channels and manufacturers to aggressively reduce inventory levels. This situation contributed to the decline in semiconductor chip prices, including memory and NAND flash, in the third quarter.

Industry experts warn that if the DRAM market enters a downcycle, the decline will be significant and rapid. This is because the DRAM market downturn pattern has persisted for at least five quarters since 2000, resulting in a 41% decline. The most recent downcycle experienced a market decline of -48% over approximately seven quarters, from Q3 2018 to Q1 2020.

IC Insights, based on current projections, projects a 38% market contraction in the third quarter of this year from the peak in the third quarter of last year. It also anticipates further downward pressure on the DRAM market in the fourth quarter and into early next year.