Memory manufacturers responsible for computer hardware such as RAM are going through production cuts and this is causing a massive price surge in RAM based on DDR5 technology, according to industry sources.
Following multiple financially challenging quarters, the DRAM industry is currently at a critical juncture, relying heavily on collaborative efforts between manufacturers and consumers to navigate through the situation.
The revenue downturn can be attributed to various factors, with an extended oversupply situation being a significant contributor. Elevated inventory levels and a lack of consumer interest have presented companies with severe challenges.
As a result, some of the biggest memory producers such as Samsung, SK Hynix, and Micron are looking to significantly reduce their production targets to compensate for the oversupply situation. According to a report from MyDrivers, citing inside sources from Taiwanese media, RAM prices of the DDR5 kind could see a price increase of up to 20%, DDR4 by 15%, and DDR3 by 10%.
The price increase was initially expected to be less drastic (as shown in data taken from Trendforce above), but now it is predicted to have a notable effect on the consumer market.
Currently, the memory industry is in a “transitional” phase, with consumers making a shift from DDR4 to DDR5 as their primary memory standard. Furthermore, there is a significant rise in demand from the server markets, attributed to the increasing impact of artificial intelligence in the segment.
As next-gen standards such as DDR5 and LPDDR5 move towards becoming mainstream specifications in the markets, the forthcoming quarters appear promising in terms of potential positive outcomes in revenue and market correction for supply and demand dynamics.
It is unclear how badly the DDR5 price increase is going to affect the current RAM market, but we can certainly expect the latest standard to be a bit more pricey in stores.