DRAM and NAND memory chips continue to become more
Hardware

DRAM and NAND memory chips continue to become more expensive – production cuts are bearing fruit

The cost of DRAM memory chips and NAND flash memory on the spot market has increased significantly. This dynamic suggests that the industry’s efforts to combat the oversupply of chips in the market are finally bearing fruit.

    Image source: Samsung

Image source: Samsung

From the perspective of DRAM and NAND memory manufacturers, the current situation in the industry, which is accompanied by an oversupply of extremely cheap products, is a real crisis. This state of affairs has led to a sharp decline in manufacturers’ profits and has also raised concerns about a possible bankruptcy of the entire industry. However, maintaining higher prices has given some companies like Samsung and Micron more confidence.

Data from DRAMeXchange analysts suggests that DRAM and NAND spot prices have increased in recent months. Chip prices fell in 2022 and early 2023, but bottomed out in July and August and have been rising steadily since then. Although the price of DRAM and NAND chips has not yet returned to the levels seen at the beginning of the year, it has risen significantly in recent months. For example, two DDR4 memory chips with a capacity of 8 Gbit now cost 10% more than in August. At the same time, the cost of 512 Gbit NAND chips has almost doubled since July, and 256 Gbit chips have increased by 55% in the same period.

The reason memory chip prices have fallen so low in the first place is because of the slowdown in the global economy following the coronavirus pandemic. Against this backdrop, there was a drop in demand as consumers cut costs, leading to an oversupply of chips, which led to a drop in prices. The third quarter of 2022 was the most difficult, causing global revenue from sales of DRAM and NAND chips to fall by 30% and 24%, respectively.

    Spot prices for DRAM and NAND chips in 2023 / Image source: tomshardware.com

Spot prices for DRAM and NAND chips in 2023. Image source: tomshardware.com

This had serious consequences for manufacturers: Samsung’s profits almost disappeared in the first quarter of 2023, while Micron lost more than $2 billion. Of course, these companies have significantly reduced production of memory chips, and now this move has begun to have a significant impact on production supply. As a result, the costs of memory chips are rising again.

Some results of the current situation in the industry are already visible. At the beginning of this year, the cost of 1TB SSDs with PCIe 4.0 interface dropped to $35 to $40. Even now it will be difficult to find a model on sale that costs at least $50. It is noted that a similar price increase for RAM has not been observed so far. This is probably because the price hasn’t increased that much, but that could change in the future.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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