DDR4 memory prices have seen a “rapid spike” reports Taiwanese tech industry journal DigiTimes. It asserts that, in the second half of May alone, DDR4 spot market prices have soared by around 50%. Several factors are said to be at play here, exerting inflationary pressure on DDR4 prices.
RAM ICs | Start of May | End of May | Price increase |
|---|---|---|---|
DDR4 8GB | $1.75 | $2.73 | 56% |
DDR4 16GB | $3.58 | $5.20 | 45% |
You can see in our table, above, the rather extreme price action affecting the DDR4 spot market in recent weeks. DigiTimes also says that the contract prices paid by tech manufacturers have also skyrocketed by between 22–25% for 8 GB and 16 GB chips, compared to prices negotiated in early May. During Q3, it is expected that DDR4 prices will continue to rise by an estimated 10 to 20%.
What is behind the sudden DDR4 price increases?
One well-documented memory industry trend that is behind the price increases seen is said to be makers shutting down their DDR4 production in favor of DDR5 and other more profitable lines. In February, we noted that the likes of Micron, Samsung, and SK hynix were being rudely elbowed out of the DDR4 market by Chinese players (such as CXMT and Fujian Jinhua) ruthlessly undercutting them in this segment.
Samsung was seen to flinch in late April, as reports circulated that the South Korean technology and manufacturing giant had scheduled to cease DDR4 production in early June.
Now there are indications that oversupply from Chinese ‘dumping’ is at an end, as CXMT has been instructed by the Chinese government to abandon DDR4 manufacturing. Thus, the reported spikes in DDR4 pricing in recent weeks may stem from a perfect storm of the above supply-side factors all exerting an effect over a relatively short period of time.
DigiTimes doesn’t lay the DDR4 pricing spiking blame entirely at the door of cuts in supplies and the anticipation of spot market traders. It also cites upward pricing pressure coming from US-China tensions and other market uncertainties.
The source doesn’t go into much detail about why US-China tensions have contributed to the recent DDR4 memory spike. However, we reported on US tariff-inspired stockpiling of DDR4 in late May, causing a significant price surge. Additionally, we note that CXMT’s move to shadow South Korea’s lead in shifting away from DDR4 will have been deemed necessary for China’s increasingly self-sufficient semiconductor industry to keep up with tech trends.
DDR4 still required by some industrial and embedded platforms
Despite the spot/contract price rises bringing the prices for DDR4 and DDR5 closer (to within 7%), DigiTimes says industry insiders reckon “the window for DDR4 profitability is closing fast.” With all the major DDR4 makers said to be exiting, there still seems there is room for some smaller suppliers to continue making DDR4, though. These stragglers could maintain profitability by addressing industrial and embedded platforms that still use DDR4. Intel's Ice Lake and AMD's Milan server platforms, for example, use DDR4. These servers are expected to continue to be in deployment until at least 2026.
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