DRAM Prices Fall for Second Straight Day as US Data Center Regulations Widen
DRAM (the main memory in computers and smartphones) prices fell for a second consecutive day. On the 6th, the spot average price of DDR5 16Gb DRAM dropped 0.82% from the previous trading day to $60.167. It had fallen 1.09% the day before, marking two straight sessions of weakness. Because spot prices serve as a leading indicator of fixed contract prices, a prolonged downturn could also affect prices in transactions between companies. The exchange rate reacted as well. That day in the Seoul foreign exchange market, the won closed the daytime session at 1,356.6 won per dollar, up 14.5 won from the previous trading day.
Tension is mounting in the Korean semiconductor industry after the Democratic Party, which campaigned on regulating data centers, won control of both houses of Congress in the US midterm elections and claimed the governorships of major data center hubs such as Texas. According to reports on the 7th (local time), 34 of the 36 governor-elects in this midterm election supported regulations or restrictions on data centers, and 12 had pledged a 'temporary halt to development.'
Democratic governor-elects in states like Texas, where AI data center investment is concentrated, are considering halting new construction. Gina Ortiz Jones, governor-elect of Texas, which accounts for about 25% of planned US data center capacity, said she would suspend new approvals until laws protecting residents—covering electricity rates and water usage—are put in place.
Public opposition to data centers has also been confirmed. In a nationwide US survey conducted by pollster SSRS, 61% of Republican supporters opposed building data centers near their homes. Goldman Sachs analyzed that if politicians reflecting this sentiment expand construction restrictions, about 45% of planned US data center capacity could be affected.
Domestic memory makers have increased their supply of high-bandwidth memory (HBM) and server DRAM, buoyed by big tech's AI data center investments. If new data center expansions are blocked or delayed, the rollout schedules for AI accelerators and servers will need to be adjusted.
The Bank of Korea estimates that semiconductors accounted for roughly half of Korea's economic growth this year. The government has so far diagnosed no signs of contraction in AI investment or semiconductor demand. Deputy Prime Minister and Minister of Science and ICT Bae Kyung-hoon said, "Korea must not let the current mood sweep us into halting or delaying investment. Even if the United States stumbles, other countries such as China, France, and Canada could instead seize it as an opportunity."
