Thursday, 22 February 2018 17:07

RAM, Going backwards

This may come as a surprise but the price for a 4GB DDR4 chips is as expensive now as 3 years ago. Why? Demand is high, supplies are low and China is looking into price fixing amongst the big companies.

First let’s tackle demand. RAM is everywhere: your phone, TV, computer, even electric meters, if it’s smart it needs RAM. With consumers wanting more and more high-tech devices to run their lives, with ever increasing software demands for memory this puts ever increasing demand on the market. Not only that but demand for other types of memory is high too, GDDR5 used in most modern graphics cards and games consoles is also produced by the same manufactures but with a far higher profit margin. With crypto miners buying up graphics cards as fast as they can be produced this puts much demand for GDDR5. NAND chips used in all SSD is also in high demand as HDD are slowly losing the dominance they once had, even though different from DDR they still tend to be produced in the same factories. But with so many chips in demand and only so much funding that can be dedicated to expansion it leaves, at least for now, high demand to low supply. 

Why is supply low? Almost half of all production comes from Samsung and with Micron and Hynix taking second and third place respectively, this means the big three control 90% of the market. RAM production is a very complex operation and billons are needed to provide the facilities and tools to produce it. With such a low margin on it in previous years this has meant that there has no real push from manufactures to increase production, and even now when it would be worth doing it takes years to get those factories built. Not only that but recent disasters have hit the factories that do produce it, a factory caight fire, several factories got flooded, it all adds to this perfect storm of supply and demand.  

Price fixing is nothing new, the companies have already been caught and fined for price fixing back in 2003. Not only does fixing the price like this improve profit margins on every chip produced but as prices rise on RAM so does the stock price of each company (with exception to Samsung who produce so many goods any increases like this is hardly noticed, you would be surprised what Samsung makes). 

This means that with the price of RAM reaching all time highs, high end graphic cards prices are becoming absurd and the coming architecture change needed to CPU's to fix the Spectra bug. There is no way we could recommend building a PC right now, this may sound strange for a company that part of the service is the building of new computers but recommending it right now would be a disservice to our customers. If however, you have no choice but a new PC then it's just something you will have to do, but our recommendation is to get as much life from your current hardware as possible and look to when prices are retuning to normal which could be some time.

Read 1445 times Last modified on Saturday, 03 March 2018 19:02

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