RAM prices are expected to get cheaper as the prices of DRAM and VRAM chips are expected to go down. The memory chipmakers aren’t going to be happy about it.
About a month ago, Taiwan based DigiTimes (translated), via Tom’s Hardware reported that China’s leading DRAM chipmakers Changxin Memory (CXMT) and Fujian Jinhua are dumping cheap DRAM chips in the market.
The DRAM market has 3 big names. South Korea based SK Hynix, Samsung and US based Micron. These three make the best memory chips in the world and have high market share. To counter that, the likes of CXMT has started selling DRAM chips at a 50% cheaper price than their South Korean counterparts. This especially applies to DDR4 RAM, causing an oversupply of it.
CXMT reportedly produced 70,000 wafers per month in 2022. This year, that figure has increased to 200,000 wafers per month and it wants to increase it further to 300,000 wafers per month. By doing this, it wants to capture above 10% of world’s DRAM market share. All this is thanks to the active support of the Chinese government through its policies and subsidies, allowing DRAM makers to ignore profits for now and concentrate on dominating both local and international markets.
Not only that, Chinese companies are trying to put their DRAM chips into RAM sticks made by Taiwanese companies and sell them to Indian markets to avoid public suspicion thanks to relatively bad recent geopolitical issues between both India and China in recent times.
The result of this is that the prices of DDR4 RAM have fallen by almost 10% this quarter. Because of it, South Korean DRAM chipmakers are now moving their production from DDR4 RAM towards DDR5 and HBM3. HBM3 is used mostly in AI hardware and these Chinese DRAM makers don’t have that big an expertise on it. Not to forget, making DDR5 RAM isn’t easy either, thanks to the requirements of higher expertise and restricted tech.
The long AI craze which ensured that RAM prices go up is now settling due to dumping on DRAM chips. Going forward, RAM prices are going to get even cheaper.
DRAM Chips To Become Cheaper Due To Lack Of Demand
Taiwan based TrendForce (via Tom’s Hardware) reports that DRAM is likely to become even cheaper in first quarter next year, that is 1Q25. This is due to low consumer demand and increased production of Chinese DRAM makers, allowing it to flood the market with low-priced DDR4 chips.
The PC DRAM market is going to see the biggest decrease in prices. The prices of DDR4 are expected to go down by 10-15% in 1Q25, whereas DDR5 will get cheaper by 5-10%. The server RAM market is expected to see a similar trend.
Mobile DRAM chips, which already saw 13-18% decrease in LPDDR4X and 5-10% decrease in LPDDR5X of prices in 4Q24, is expected to further see a decrease in 1Q25. The prices of LPDDR4X are expected to get cheaper by 8-13%, while LPDDR5X is likely to be cheaper by 3-8%.
It’s not DRAM alone which is expected to get cheaper. Even Graphics DRAM, that is VRAM, is expected to get cheaper. With current-gen GDDR6 expected to get cheaper by 8-13%, while next-gen GDDR7 likely to become cheaper by max 5%. But don’t expect graphics cards makers like Nvidia and AMD to give that benefit to the consumers. For two reasons. They (Nvidia) want to keep their high profit margins and two, they have likely signed a long time deal with VRAM makers. Means price decrease of graphics cards will only follow the usual trends, not anything unusual.
The reason for all this is simple, lesser demand of computers, mobiles, notebooks and datacenters worldwide. This has ensured that the prices go down everywhere.
Conclusion
As always, if the prices of products go down, it’s consumers that benefit, not the companies. Something that most people ignore is that balance of both is important, not as the cost of each other.
While it’s always the consumer which suffers due to the high costs of products, DRAM chips getting cheaper means that chipmakers aren’t going to like it. Take DDR4 RAM chips being dumped by China, for example. It has ensured that SK Hynix and Samsung reduce their production of DDR4 DRAM chips to maintain profitability.
DRAM is not a simple chip, either. It requires advanced production capabilities. Also, a badly made RAM stick can make the whole computer work badly. Though that’s mostly in the case of overclocked RAM. But still, don’t expect a guarantee of high quality chips from Chinese DRAM makers. So while consumers are going to benefit with this for sure, let’s not forget quality.
It’s not the RAM prices alone which is to be excited about. In the far future, we are likely to see DRAM chips being stacked on each other with 3D X-DRAM, allowing RAM sticks as large as 1TB. But in the near future, we might see an entirely new RAM form factor called CAMM2 coming to computers. Changing how RAM works in computers.
