DRAM Prices Peak in Q4 2024 as Morgan Stanley Cools Growth Outlook

DRAM contract prices are expected to reach their highest point in the fourth quarter of 2024, according to a recent market analysis from Morgan Stanley. This forecast is significant for buyers and investors as it indicates the conclusion of the recent price increase, which may stabilize costs for memory module manufacturers and system integrators before the year concludes. This prediction emerges as the industry manages a complex supply environment with minimal new production capacity becoming available.

SK Hynix excludes the bank from its $26.5 billion IPO underwriting syndicate

The analysis focuses on the global DRAM market, with specific attention to major South Korean and US-based players. Morgan Stanley analyst Shawn Kim argues that while prices will peak, the momentum driving that growth is slowing down. The firm notes that the percentage of companies expecting profit growth has dropped from a peak of 92% to 77%, indicating a cooling market sentiment among industry participants.

Investment banks including BNP Paribas and Bernstein estimate that the supply gap for DRAM will remain between 2% and 8% over the next two years. This persistent shortage supports the view that prices will stay elevated through late 2024. Tight supply conditions contrast with slowing growth expectations, creating a divergence in market outlooks that complicates forecasting for the remainder of the year.

The report has sparked controversy in South Korea, where some view Morgan Stanley's bearish stance as an attempt to short the Korean chip industry. This perception has had tangible business consequences, as SK Hynix recently excluded Morgan Stanley from its underwriting syndicate for a $26.5 billion US initial public offering. SK Hynix selected Bank of America, Citi, Goldman Sachs, and JPMorgan for the deal, a move that sources describe as a business decision rather than an explicit punishment for the report.

Morgan Stanley's analysis highlights a critical inflection point for the memory market, with prices set to peak in Q4 2024 despite ongoing supply constraints. The exclusion of the bank from SK Hynix's IPO underwriters underscores the sensitivity of market commentary in the region. Buyers should closely monitor Q4 pricing trends to assess the sustainability of current memory costs.