The cost of RAM is steadily increasing. The period of low prices is a thing of the past

The cost of RAM is steadily increasing. The period of low prices is a thing of the past

A year ago, the price of RAM of various types and generations was extremely low. Analysts predicted a protracted “peak” with an even stronger price decline. But manufacturers have started to take action, and now it seems to have worked. DDR5 and previous generations of RAM have become more expensive. Details – under the cat.

Was the price low?

Yes, it’s easiest to track with the DDR5 example. At the time of its appearance in the summer of 2021, a set of two new memory sticks with a total volume of 16 GB cost $400. But only a year later, by the summer of 2022, the price of this kit dropped to $170, and the downward trend continued.

There were several reasons at once, including:

  • Shortage of electronic components since the start of the coronavirus pandemic. Corporations and ordinary users began to purchase laptops, computers, smartphones and tablets — both for work and for entertainment. There was a shortage of devices and components for them almost immediately, after which prices rose, as they say, “to the sky.” Then the pandemic ended, and the demand gradually fell.

  • The second reason is related to the first. Vendors of electronic components and systems have accumulated huge stocks of equipment in warehouses. As demand began to decline, companies became worried, because no one was reversing moral aging, and production was going almost at the previous level. Accordingly, they began to lower prices in order to sell off stocks.

  • The third reason is the preservation of the scale of production during the pandemic when demand is reduced. During the shortage, almost all suppliers of electronic devices and systems increased their shipments. At first, this measure justified itself, but then the demand became much lower, the ghost of another crisis loomed – not a shortage of electronics, but overproduction.

Was it not possible to predict the rise in prices?

No, you can. Many experts who monitor the trends of the electronics market paid attention to the possible increase in prices. So, for example, TrendForce analysts predicted that RAM will soon become more expensive. But the forecasts were soft – experts predicted an increase in cost by a maximum of 8-10%.

Thus, the increase in prices for DDR5 memory sticks for PCs should not have exceeded 10%, and the increase in the cost of DDR4 was only about 5%. For laptops, everything is about the same – about 8% for PCs and 3-8% for laptops.

And in fact, this indicator, in the case of DDR5 RAM, was about 20%, which really turned out to be a surprise. As for DDR4, prices for this memory rose by about 10-15%, which is about 2-3 times higher than experts predicted. DDR3 has increased in price by 10% compared to last year.

And this is not the limit, because if companies manage to sell off old stocks and significantly reduce the production of components and systems, perhaps even slightly below the current level of demand, the cost of electronics can increase very much.

Where does this growth come from?

All of the factors mentioned above could have led to an uncontrollable fall in electronics prices, including, of course, RAM. But manufacturers began to take measures, as mentioned above. In particular, to reduce the volume of shipments of new components and devices and quickly sell out warehouse stocks.

If earlier production lines were loaded at 100% or even higher (that is, some reserves were put into operation), now this is not the case, companies are artificially reducing the volume of production of components and devices.

Equipment became more expensive, which also affected the components from which PCs, laptops, car systems, etc. are assembled.

Not only memory, but also everything else

For example, SSD and HDD, which were already given away for free. The flywheel of time turned, and the cost of media began to gradually increase. This is especially true for SSDs.

The fact is that the flash memory is starting to run out again. And there are several reasons for the current situation. One of them is the potential shortage of materials used in the production of NAND modules. Such a deficit, while still very small, can cause an increase in the price of chips and, as a result, of the drives themselves.

If during the pandemic memory chips were supplied by vendors from various countries, including China, now Chinese companies are under sanctions. Some of them significantly reduced the volume of their products, and began to supply them only to the domestic market. Vendors do this to improve the supply and demand balance. As a result, stocks of chips and components in the company’s warehouses began to melt quickly, although not long ago they were huge.

Analysts believed that the first results would be revealed at the beginning of 2024, but everything turned out a little earlier – by the end of 2023. So, in the summer, prices for SSDs began to stabilize, and some models even became more expensive.

One of the largest vendors that reduced the volume of memory production is the South Korean corporation Samsung. At the same time, it increased the prices of silicon wafers with NAND chips by 10-20%. And this is sensitive for the market, since both the sharp increase and the company are very large.

And the Phison company was even forced to return to pre-paying for NAND modules that customers order from it. Such a policy was relevant during the shortage of electronics and components during 2020-2021. After the crisis ended, Phison, as well as some other manufacturers, abandoned the prepaid way of working. Nowadays, all this is gradually returning.

In general, the cost of flash memory prices began to rise from August 2023. This, in particular, led to an increase in contract prices for enterprise solid-state drives. It is quite possible that the prices of other types of memory will also increase. Thus, market players assume that the cost of mobile DRAM will immediately increase by almost 15-20%.

What’s next?

We have definitely passed the minimum price for electronics, now everything will only get more expensive. How active depends on the measures taken by manufacturers and the demand for devices and components. It is difficult to predict anything in the current conditions, we can only speak with confidence about price increases.

Of course, not only on DDR and NAND chips and their derivatives, but also on electronics in general. Components are becoming more expensive – the price of the devices themselves will undoubtedly increase. Let’s try to guess the level of price growth together – for this we add a survey.

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