Scientist says RAM pricing has risen to normalized 2007 levels, AI shortage undid 20 years of progress in a matter of months — memory prices had been falling exponentially for decades

Software performance expert, scientist, and GitHub developer Daniel Lemire compared historical computer memory prices and showed that decades of falling prices were undone in just a matter of months because of the massive demand for HBM. According to his X post, this event is a historical anomaly, and he cannot think of an instance where technology hardware prices reverted to levels from decades before.

“RAM on a per unit basis is about as expensive as it was in 2007,” Lemire said. He also added, “I do not think anyone can predict what will happen, but I am guessing that we either find a way to build AI systems without so much memory, or we find really clever ways to make much more memory much faster.”

We also checked third-party data compiled and maintained by David Shim for the Stanford DAM Project. The latest price for DDR5 memory sits between $13.28 and $11.41 per GB — the last time RAM hit this price was in 2008, when the price for DDR2 hovered by $15 and 11.00 per GB. These are based on nominal USD values, though. If we take 2024 inflation into account, the current amount for DD5 is between $12.74 and $10.94 per GB, which was last achieved in 2011, when DDR3 prices were at $11.85 per GB.

Technological advances, especially in manufacturing and miniaturization, meant that tech became cheaper over time. This has been true ever since the first general-purpose digital computer was created 80 years ago. ENIAC cost the government $400,000 in 1946, meaning it would probably cost around $6,850,297.44 today. However, its computing power equaled roughly 5,000 additions per second — by comparison, one of the cheapest smartphones you can get today, the Moto G Play, is on sale for $99.99. This smartphone is powered by a Snapdragon 680 processor with AI performance of 3.3 TOPS — that is 3.3 trillion operations per second. We can’t really compare the ENIAC to a modern processor, but it at least shows us the scale by which technology has advanced, and prices have dropped.

The massive increase in memory prices in recent times wasn’t caused by technological regression or a bottleneck in supply — instead, it’s the massive demand for HBM driven by the AI race. “The memory output is increasing by around 20% per year. Now, normally, that would be fantastically fast and amazing for any large, mature industry, but ask yourself, ‘Is the demand increasing by 20% a year?” Elon Musk said during the last SpaceX earnings call. “No, the demand is increasing by 200% a year, maybe higher.”

Other experts and industry leaders agree with Musk. The chairman of the SK Group, the holding company that owns memory chip manufacturer SK hynix, said that RAM prices are “abnormally high,” and that the industry must take steps to increase supply and lower prices. Even RAM that uses chips from Chinese manufacturer CXMT, which some people look to as a cheaper alternative, generally tracked the prices of modules that use chips from the big three (Micron, Samsung, and SK hynix).

Aside from computers, other industries are already being affected by the shortage, including graphics cards, smartphones, gaming consoles, and even automobiles. We do not know how long the current memory crisis will last, but the situation is unsustainable and “something has to give.” The scary thing is that nobody knows what would happen if and when that time comes.

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