The world is entering a period of cheap memory: since July, contract prices for DDR4/5 have fallen by more than a third

DRAMeXchange statistics say that at the end of November the contract price of an 8-gigabit DDR4 chip did not exceed $1.35. If we consider that in July it reached $2.1, we can talk about a price decrease of 35.7%. The decline in RAM prices in the second half of the year was due to a number of factors, as DRAMeXchange representatives explain.

Image Source: Samsung Electronics

On the one hand, demand for smartphones and PCs this year has not recovered to the levels desired by memory manufacturers. Accordingly, manufacturers of devices of these types did not increase their inventories of memory chips. On the other hand, Chinese manufacturers, who have mastered the production of DDR4 chips, began to increase it in the hope of attracting buyers due to lower prices. According to some reports, the same CXMT sells 8-gigabit DDR4 chips at a price of $1 apiece, which is almost half the July level.

Analysts at Kiwoom Securities, cited by Business Korea, explain that RAM prices at the end of this year and the beginning of next year will fall significantly more than expected. With CXMT and other manufacturers increasing their memory output, supply will exceed market needs at least until the second quarter of next year. For the financial well-being of Samsung, such price dynamics pose a certain threat.

The average transaction price for the purchase of 16-gigabit DDR5 chips in November fell by 3.7% to $4.05 compared to October. If compared with the July level, the decrease reached 16.1%. The protracted nature of price declines could undermine the ability of large companies like Samsung and SK hynix to invest in modernizing their production lines and building new ones. Since they are large taxpayers in South Korea, this could have a negative impact on the entire national economy.