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Memory Does not Come Cheap... Or Does It?

Aug. 24, 2018 – In the age of cryptocurrency mining and with demand for memory getting higher, it is getting harder to find more affordable memory. Yet, there is a belief that RAM and graphics cards prices may be cheaper by about 25% in 2019. Market analysis firm DRAMeXchange says memory could drop in price by about 15-25% next year. Contract negotiations with DRAM suppliers have begun for the fourth quarter of fiscal 2018, and while prices of RAM have remained steady, prices for graphics memory has begun to recede amid softening DRAM demand across the board (no pun intended).

As the industry transitions to new, smaller 1X/1Y RAM nodes that have higher density, demand is simultaneously flattening. Additional fab capacity has also surfaced, and SK Hynix's new Wuxi fab will begin pumping out bits in 2019, which would contribute to a price reduced prices. Chinese regulators also recently met with memory vendors, like Micron and Samsung, to express concerns about the continuing shortage, but the impact of those talks on the supply situation remains unclear.

PC DRAM contract prices are usually indicative of the contract price trend for other DRAM applications. This is due to PC DRAM products being highly sensitive to the change in demand and supply situations. In Q4 2018, normally a peak season, PC OEMs are not very active in DRAM purchases, considering their high inventory levels of DRAM and awareness of the possible price decline in 2019.

Graphics DRAM pricing has skyrocketed in recent years, due in major part to the rise of cryptocurrencies and the subsequent cryptocurrency gold rush, with cryptominers boosting demand beyond supply. It is speculated that the recent plunge of cryptocurrency prices, alongside the subsequent drop in demand graphic cards for mining purposes has had an effect in reduced graphics memory pricing.

IC insights has noted that DRAM vendors have profited greatly during the graphics cards shortage. For the first time in history, DRAM could be the first individual IC category to break $100 billion in yearly revenue.

The Bottom Line

Late 2017 and 2018 have been a tumultuous year for those trying to upgrade their memory, especially in terms of graphics, since cryptomining has driven demand and prices. However, a report by DRAMeXchange has it on authority that the prices of memory could drop by 25% next year. Combined with the drop in cryptocurrency prices, and perhaps a second hand market of retired miners who no longer need their graphics cards, those looking to purchase memory may rest easy that affordability may be yet on the horizon.


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