Why RAM Prices Are Through the Roof

Why RAM Prices Are Through the Roof

The slow increase in RAM prices hasn’t earned the same attention as the headline-grabbing sticker shock of modern GPU prices, but it’s another factor working directly against PC builders and the DIY market.

Typically, the RAM market functions on a cadence that’ll be familiar to anyone who has been building PCs for more than a few years. At debut, a new RAM standard is often far more expensive than the mainstream standard it’s supposed to replace. Meanwhile, the new memory (See at Amazon) offers few-to-no benefits over the original in most cases, and is only clocked a little faster. Over time, the clock speed gap grows and costs on the new memory fall. Eventually, the two standards hit parity and the older RAM starts to become more scarce. Ultimately, the new RAM typically bottoms out cheaper than the old memory. That’s the approximate story of every RAM transition for the past two decades, leaving out the RDRAM kerfuffle.

But not this time. Over the past two years, the price of DRAM has skyrocketed. A recent report by GamersNexus found that the cost of a specific DDR4-2400 memory kit has leaped from $81 on 2/22/2016 to $196 today ($196 on January 22, $192 on January 30).

Graph and data by GamersNexus
Graph and data by GamersNexus

It would be one thing if that kit were an outlier. It isn’t. The price of DDR4 has risen dramatically according to PC PartPicker at every price point and capacity level. Sometimes you can avoid this kind of problem by picking slower SKUs or smaller capacities, but that’s not the case here. PCPP’s price index only goes back 18 months, but even the highest-end DDR4-3200 on its tracker shows similar inflation. In June 2016, you could buy 16GB of DDR4-3000 for $70; today that same RAM kit is over $200.

Sky-high Prices, With No Relief in Sight

If DDR4 prices were following a standard cost curve, you’d expect faster DRAM clocks to loosely correlate with higher costs. Instead, the costs are fairly compressed below a certain point. You can buy 16GB DDR4-2133 for $168 or DDR4-3000 for $170. DDR4-3200 is selling for just (“just”) $180. Above this point, DDR4-3333 still demands a price premium, at $220, and the prices increase from that point forward.

The explanation for this spiking is that mobile demand for DDR4 has stripped the market bare. That’s possible, but LPDDR4 and LPDDR4X are not identical to DDR4, and it’s not as simple as building DDR4 and then binning it to see what kind of memory you have. And according to DigiTimes, mobile DRAM inventory levels are spiking at smartphone manufacturers, with some companies carrying 2x the load they were as weak demand for devices and skyrocketing prices bite into smartphone profit margins as well. Overall smartphone sales grew slightly in 2017, but not at the kind of meteoric rate we saw in earlier years.

The “mobile is sucking up all the DRAM,” argument, in other words, seems weak. Apple is slashing its iPhone X production targets. Smartphone companies are unhappy with spikes in DRAM pricing and the way those spikes have bitten into their own profits. And DRAMexchange is reporting memory capacity growth is expected to be at a near-historic low of 19.6 percent in 2018, as Samsung, SK Hynix, and Micron are all cutting back on capital investments. DRAM wafer starts at all three companies are only expected to grow by 5-7 percent this year and fab expansions or new foundries take years to bring online.

And those of you thinking “Ahah! I’ll buy DDR3!” aren’t going to be happy, as DDR3 prices have risen almost as much as DDR4. While still cheaper than DDR4, we can’t recommend falling back to the older RAM standard and its commensurate dependence on older CPUs — not when Spectre and Meltdown are raising questions about how long those same CPUs will last in-market when fixes are deployed.

Spectre, Meltdown Could Make Things Much Worse

Some analysts believe Intel’s CPU sales could spike in the back half of 2018, if companies start buying new servers to replace older hardware hit by Spectre and Meltdown. Strong data center growth in the past few years has soaked up some DRAM capacity, but if companies were to start retiring old servers, that could hit prices even harder. Companies retiring older DDR3 servers would need DDR4 to replace them, and while the consumer market dwarfs the server space in terms of CPU shipments, servers tend to ship with a lot more RAM than their consumer system counterparts.

We’d like to close this post with something optimistic. GPU prices, after all, probably will come down once the cryptocurrency boom subsides. But as far as RAM prices are concerned, we’d recommend buying only as much as you’re absolutely sure you’ll need. We can’t even recommend using slower clocks to save cash; there’s not much difference between DDR4-2133 and DDR4-3000 as far as market prices (obviously this may differ by geographical area and timing, and always check to see if prices have changed). Apart from trying to stay within an 8GB to 16GB window, there’s not much users can do.

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