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Memory Pricing Is Falling Faster Than It Has Since 2011

DRAMeXchange reported that DRAM prices over the current quarter dropped nearly 30 percent, which it said is the "sharpest decline in a single season since 2011," and that drop is expected to continue until consumer demand finally matches pace with supply.

(Image credit: Oleksiy Mark / Shutterstock)

The research group expected DRAM prices to fall 25 percent this quarter. But it turns out that "most DRAM suppliers are currently holding around a whopping six weeks' worth of inventory." (You know something's up when a research group says "whopping.")

This should result in cheaper memory kits, but DRAMeXchange said that Intel's ongoing CPU shortage has weakened demand for DRAM so much that even those low prices are unlikely to increase sales enough to start counteracting memory makers' oversupply issues.

It doesn't help that the "big trio" of the DRAM industry are continuing to invest in their production. DRAMeXchange noted:

"SK Hynix has recently announced that it will invest 120 trillion won (around US$107 billion) to build four new wafer fabs as part of its strategy to improve its competitiveness. Micron, on the other hand, doubled down and commenced construction of an IC testing and packaging plant in Taiwan. At the same time, its subsidiary Micron Memory Taiwan ( formerly Rexchip) in Houli, Taichung, is considering building a new 12-inch DRAM wafer fab, which could finish construction as early as the end of next year, and massively contribute to production in 2021. As for the world's largest DRAM supplier Samsung, it is currently building a second fab at Pyeongtaek."

Samsung had previously said it would slow down memory production to help keep prices stable. Yet here they are in freefall anyway, and those efforts still weren't enough for the company to meet its earnings guidance for the most recent financial quarter.

It's clear that the memory market is changing. DRAMeXchange said that most contracts are now monthly instead of quarterly, prices are dropping faster than anyone expected, and consumer demand for new tech products has fallen for everything from memory to phones.

The upshot? At least DRAM should get cheaper and cheaper for consumers, too, so later this year might be a good time to make a few upgrades to your system. As long as you don't need a new CPU to enable those upgrades, of course. Then you're outta luck.

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