DRAM Supply Shortage Will Last Until 2014, The End Of Cheap RAM?

/ 5 years ago


According to Inotera Memories we will see a DRAM shortage that will last the full duration of 2013. As demand for tablet and smartphone DRAM soars exponentially, desktop RAM could see a shortage due to sluggish demand and lack of profitability. Inotera Memories chairman, Charles Kau, said that the DRAM shortage in the “high tech sector” will last the entire year and possibly into 2014.

The average DRAM price for the first half of April went up 8%, this was then followed by a further 13% rise in the second half of April. According to DRAMeXchange the average price of DDR3 4GB DRAM has jumped 70% in the past five months. Initially we had a prolonged price crash due to huge oversupply lasting most of 2011 and 2012. As DRAM manufacturers protected themselves by stopping or slowing production, this oversupply was slowly digested by the market without any new supply being added. Most DRAM companies suffered huge losses through this period and we even saw Elpida bought out by Micron to save it from a complete shutdown. Now we are at a point where demand has recovered but supply hasn’t fully kicked in again and so we will be left with dramatically rising DRAM prices over the next 12 month period until DRAM companies return to profit and increase production.

We are seeing this trend in DRAM company profit margins. For example in Q4 last year Nanya technology turned a loss of NT$8.8 billion but in Q1 of this year it turned a profit of NT$0.6 billion and is projecting an even bigger profit for Q2. Inotera posted a NT$3.7 billion loss in Q4 of 2012 and posted a reduced NT$0.6 billion loss in Q1 of 2013, it is projecting a return to profit at some stage this year.

So the message is, get your RAM soon as prices are constantly rising. If you can wait, then you’ll need to wait until mid 2014 for prices to drop back down again. Though it is unlikely prices will ever reach as low as they did in 2012 because that wasn’t economically sustainable for any DRAM company.

What are your thoughts on this rather gloomy projection courtesy of Inotera?


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4 Responses to “DRAM Supply Shortage Will Last Until 2014, The End Of Cheap RAM?”
  1. CBDS says:

    DDR3 is ridiculous pricewise.Instead of spending 1500 on total new system i will spend 0. Will wait for next gen ram for 1/4 the price

    • chris cranmer says:

      It wont be cheaper, it will be the same price or slightly dearer.
      DDR3 was underpriced. now its a little over. A large %age of the production cost is power
      and machinery, so the consumer price wont change much.

      • CBDS says:

        Same thing happened w sdram/ddr/ddr2… i will wait. 🙂

        • chris cranmer says:

          If you live in the u.k.,find your nearest c.e.x. store (webuy.com)
          look at used ram availability. If you can get to a store go through the ram and match up sticks.
          It is usually sold to the store in pairs. I got 4 gig of hynix 1.5v hi density 1333 for £12.
          8 Gig of 1600 will set you back £28. It is tested and warrented for a year.
          The desktop market is shrinking fast.Software driven system power development is at a standstill.Everybody is switching to tablets and laptops.
          Any i3 cpu is powerful enough for general computing.
          The days of dead cheap desktop ram are over.

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