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Report: SSD & Memory Chip Prices to Continue Falling Through Q1 2021

NVMe SSD stock image
(Image credit: Shutterstock)

At the end of 2019, analysts expected DRAM prices to rise, especially amidst the start of the Coronavirus pandemic. Prices were expected to rise by as much as 40%, and while they did indeed rise a little, the real-life numbers are nowhere as dramatic. Now, it looks like the prices are ready to fall again, and the falling will continue well into 2021, according to a report from DigiTimes.

DigiTimes' sources say that prices will drop about 10 percent through Q4 2020, and will continue to fall through Q1 2021 due largely to oversupply. 

Both Micron and SK Hynix have issued warnings of weak demand. Deutsche Bank analyst Sidney Ho noted that at the start of the pandemic, many enterprise buyers stockpiled memory products in fear that there would be a shortage later on, which now leads to weak demand and an oversupply of DRAM and NAND-based memory products, as reported by Barrons.

All things considered, this isn't good news for the memory industry. DRAM and NAND prices are typically closely related, and witness a cyclical life, going up and back down again throughout the years. At the start of the pandemic they were expected to be at an all-time low at the end of a cycle and set to rise again, but it looks like the fall is only continuing. 

Although it might be a win for consumers to have record-low pricing that is set to continue falling, the prices were already nearing unsustainable levels. If lowered demand and a flooded market continue to push prices down, that could lead to some companies leaving the space for more lucrative segments, or going out of business altogether. One way or another, memory and NAND prices will almost certainly return to higher levels at some point. So late this year or early 2021 might be a good time to splurge on that speedy storage or memory upgrade.