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This close-up photo shows a computer motherboard.

With a “super cycle” expected for DRAM-type memory semiconductors this year, analysts are bumping up their projections for the market’s growth rate this year. Some even think the growth rate will come close to 20%.

According to the latest report by market research firm IC Insights on Thursday, demand for semiconductor products will remain strong in the first quarter (Q1) of 2021. Year-on-year growth of 19% is a conservative projection, the firm said, adding that a 17% boost in volume and higher average semiconductor prices will buoy total revenue.

Though sales tend to be lower in Q1, sales in Q1 of this year are projected to grow by 2% from the previous quarter.

Among the various types of semiconductors, growth is expected to be particularly strong in memory semiconductors such as DRAM and NAND Flash, some of the main products of South Korean semiconductor makers Samsung Electronics and SK Hynix.

Analysts at IC Insights said that DRAM and NAND Flash are expected to see the strongest sales growth in 2021, posting a year-on-year growth rate of 18% and 17%, respectively.

World Semiconductor Trade Statistics (WSTS) also predicted that sales of memory semiconductors this year would increase 13.3% compared to last year, exhibiting the highest growth rate across all semiconductor product types.

Amid projections that DRAM products will enter a super cycle this year, recent trends indicate that prices have begun to rise.

According to Taiwanese market research firm DRAMeXchange, the spot price of a DRAM (DDR4 8GB) for PCs that had been selling for US$2.77 at the end of last year had risen to US$4.48, an increase of about 60%, by Wednesday. The industry expects that the upward trend in DRAM prices will begin in earnest in Q2 and that the increase in NAND Flash prices will accelerate in the second half of the year.

“While prices are rising across memory semiconductors and system semiconductors, supply can’t increase in the short term, creating strong demand for purchasers to stockpile semiconductors. That’s expected to accelerate the timing of the price rebound not only in DRAM but also in NAND,” said Yu Jong-woo, a researcher at Korea Investment and Securities.

By Cho Kye-wan, staff reporter

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