TrendForce: DRAM shortage trend spreads to DDR2, old memory prices are expected to continue rising in the third quarter BlockBeats News: On June 23rd, high-tech industry research firm TrendForce announced in a study released on June 22nd that the supply of mature process DRAM continues to tighten, forcing consumer DRAM buyers to turn to earlier generation memory products in order to compete for more supply quotas. This change is driving up demand for traditional DRAM such as DDR2 and DDR3, and continuing the upward trend in related product prices. The institution expects DDR2 contract prices to rise by approximately 55% to 60% in the second quarter of 2026, with a further increase of 35% to 40% in the third quarter. This means that after the strong rise in the first quarter, the price pressure on DDR2 has not eased, but continues to heat up due to the widening supply-demand gap. The core reason for the supply side comes from the redistribution of advanced process capacity. TrendForce points out that the three major DRAM manufacturers still prioritize using their production capacity for HBM and server DRAM to meet the demand brought by AI infrastructure construction. Correspondingly, wafer allocation for DDR4 and other mature process products has been compressed, forcing consumer DRAM customers to turn to Taiwanese suppliers for support. In the context of limited supply, Taiwanese DRAM manufacturers such as South Asia Technology and Huabang Electric have increased their bargaining power. TrendForce stated that due to significant demand exceeding the bit shipment capacity that Taiwanese manufacturers can provide, suppliers are strategically reducing the investment of low margin products and shifting production capacity to higher value products to improve their profit structure. The demand side has also undergone changes. With the shortage of consumer grade DRAM and rising contract prices, some OEM and ODM manufacturers have started to lower their memory specifications in order to control overall machine costs. Some designs that originally used DDR4 have been changed to DDR3, and some DDR3 products have further switched to DDR2. The customer is attempting to obtain relatively stable supply through lower capacity configurations or older generation products. This leads to the downward pressure of DRAM shortage along the technological generations. Originally, the supply shortage mainly focused on HBM, server DRAM, and DDR4 has begun to spread to traditional products such as DDR3 and DDR2, highlighting the crowding out effect of AI demand on the entire memory industry chain. TrendForce states that the main suppliers of DDR2 include Huabang Electric and Jinghaoke. However, Huabang Electric is gradually reducing DDR2 production and shifting related production capacity to products with relatively higher gross margins such as DDR3, DDR4, and LPDDR4, which will further exacerbate the tight supply of DDR2. In contrast, Jinghaoke plans to expand DDR2 production as much as possible within the existing wafer quota of TSMC, concentrate resources to enhance the profitability of this product line, and partially fill the supply gap left by Huabang Electric's withdrawal from DDR2. This round of price increases shows that the memory demand brought by AI no longer only affects high-end HBM and server DRAM. As advanced production capacity is redirected, mature processes and outdated memory products are also becoming pressure points for supply-demand imbalance. For consumer electronics, industrial control, and some long lifecycle devices that still rely on DDR2 and DDR3, cost pressure may continue to rise in the second half of the year. [Original link]