After a historic rise in 2017, prices of two major types of memory chips—called NAND and DRAM—this year have fallen 37% and 16%, respectively, according to semiconductor sales tracker DRAMeXchange.
The price drop led to a profit forecast from Samsung Electronics that was below analysts’ expectations.
Shares in the world’s largest smartphone and semiconductor maker slid 2.3% on Friday after Samsung said it expected second-quarter operating profits of 14.8 trillion won ($13.2 billion), below analyst estimates of 15.1 trillion won. That result would break the South Korean company’s string of four record-shattering quarters.
Memory chips go in everything from smartphones to internet-connected light bulbs to self-driving cars, and growth in demand for the chips had outrun supply. The current pullback in their pricing reflects stepped-up production by manufacturers plus sluggish smartphone sales.
Even so, the industry is still healthy. Though memory-chip prices are cooling, the cost of NAND and DRAM remains historically high.
“It’s getting back to normal versus the big shortages we were in,” said Randy Abrams, a Taiwan-based analyst for Credit Suisse.
