DDR4 prices rise 50% as manufacturers shift to DDR5 and beyond

DDR4 memory costs spike by 50% amid DDR5 transition, affecting markets.

: The prices of DDR4 memory have surged by 50% as manufacturers are progressively shifting their production to DDR5 and beyond, due to various market conditions. Despite the technical obsolescence of DDR4, supply constraints and ongoing high demand maintain its elevated price levels. Major DRAM manufacturers are ceasing DDR3 and DDR4 production to concentrate on higher-margin products like DDR5. Analysts predict that further price increases are likely until the market stabilizes as supply and demand equilibrate.

DDR4 memory, which was introduced in 2014 and has dominated the SDRAM market, is facing a significant price surge as manufacturers are transitioning to newer technologies like DDR5. As reported by Alfonso Maruccia for TechSpot, DDR4 prices have risen by about 50% in May, with 8GB modules experiencing a 56% increase and 16GB modules climbing by 45%. These rising prices impact system integrators, OEM manufacturers, and enterprises, who purchase memory in bulk, with costs per RAM IC rising from $1.75 to $2.73.

The ongoing shift in the memory market is driven by several factors, including the gradual phase-out of DDR4 production by major DRAM manufacturers in favor of DDR5 and high-bandwidth memory, as reported by DigiTimes. The world's largest DRAM makers have announced plans to halt DDR4 production, aiming for higher profitability from modern memory products. However, the demand for DDR4 is still strong in certain sectors, contributing to price volatility.

The phenomenon is further complicated by earlier market conditions, where Chinese manufacturers, instructed by Beijing, flooded the market with low-cost DDR4 chips, leading to temporary oversupply earlier this year. In response to market shifts, Beijing has now instructed local manufacturers, such as CXMT, to abandon DDR4 production, which has helped reduce the oversupply issue. However, the swift transition to DDR5 and DDR3's phase-out fueled the recent price increases.

In view of the changing landscape, analysts expect that the market may see further price increases of 10–20% in the upcoming months before stabilizing. The pricing gap between DDR4 and DDR5 is closing, currently at 7%, making the older technology less profitable. Despite this, DDR4 will continue to be used in industrial and embedded platforms, much like outdated technologies like floppy disks.

While manufacturers focus on DDR5, the transition's complexity, including tariffs and trade tensions, may lead to continued volatility in DDR4 pricing. The future dynamics will depend largely on how efficiently manufacturers can transition to newer technologies while balancing supply and demand.

Sources: TechSpot, DigiTimes, Tom's Hardware

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