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RAM in 2021 began to rise in price and this is just the beginning
02.02.2021 [18:03],
Gennady Detinich

A recent report from IC Insights predicts the most rapid growth in the RAM market among all other IC categories in 2021. Good for DRAM makers, bad for consumers. Everything that contains memory chips will rise in price. What’s more, in the DRAM spot market, where deals are instantaneous with no far-reaching commitments, prices for memory chips have already started to rise, a sure sign that a general rise in price is just around the corner.

Today, analysts at the South Korean company NH Investment & Securities also announced a forecast according to which RAM will noticeably rise in price this year. Further in the text, we will illustrate the opinion of Korean analysts with graphs with the dynamics of prices for DRAM chips and memory modules on the spot memory market over the past three months.

Price dynamics in the spot market for 8 Gbit DDR4 chips. Image source: ChinaFlashMarket.com

There is not much to comment on. Each chart speaks for itself and, in general, that from about the middle of January of the new year, chips and RAM modules in spot transactions began to rise in price. This means that on contractual — long-term transactions — the wholesale price of memory will soon also creep up. This will probably happen already in February.

Price dynamics in the spot market for 16 Gbit DDR4 chips. Image source: ChinaFlashMarket.com

So, according to NH Investment & Securities, the January contract price of RAM increased by 5% on average year over year, the first increase since May 2021. This year, as everyone knows, passed against the backdrop of the COVID-19 coronavirus pandemic, which has changed a lot in the life and work of a huge number of people on Earth. In particular, the transition to remote work, distance learning and online commerce led to an annual increase in PC sales by 10% (up to 282 million pcs.), which has become the highest indicator for the last 10 years. This practically washed out the memory reserves accumulated during overproduction and not in demand during the years of economic recession amid the US trade war with China.

Price trends in the spot market for 16 GB DDR4 memory modules. Image source: ChinaFlashMarket.com

According to analysts, high demand for PCs will also continue in the first half of 2021, but compared to 2021, the annual growth in PC sales will decrease to + 5% per year. We add, in addition to the pandemic, the growth in demand for PCs was helped by AMD, whose new processors created such good competition for Intel processors that the latter even began to reduce prices.

Price trends in the spot market for 8 GB DDR4 memory modules. Image source: ChinaFlashMarket.com

Apple also made its move with the introduction of its own ARM-based M1 computer processor, which marked the company’s departure from Intel products. Finally, Intel is also preparing new updates in the new year: Alder Lake desktop processors and the Whitley server platform with as many as eight memory channels! Therefore, the question of what to do with extra memory and whether it will be superfluous in 2021 will probably not be the most urgent question in the next 12 months. But by the end of 2021, AMD will present new EPYC server processors on the 7nm Zen 3 architecture — also a platform for memory utilization! It looks like a lull in the DRAM market is not threatening us. Woe to those who did not have time to upgrade systems.

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