DDR5 Memory Prices Soar By Up To 20% Amid Large-Scale Production Cuts by Manufacturers

wccftech.com:

Industry sources report that the effect of production cuts by memory manufacturers has started to translate in mainstream markets as DDR5 memory prices have soared by huge margins.

After several "negative" financial quarters, the DRAM industry is currently in a "pivotal" state, where it is entirely dependent on how manufacturers and consumers work together to find a way out of the situation. While several factors contributed to the revenue losses, a prolonged oversupply situation played a vital role, since inventory levels were high, and the lack of interest from consumers meant that companies were facing dire problems.

However, to counter the situation, industry leaders such as Samsung, Micron, and SK Hynix had decided to "drastically" reduce their production levels, in an attempt to balance out the situation in markets, potentially leading to inventory corrections. MyDrivers reports citing Taiwan Business Times, that by reducing production, memory prices have seen a decent rise, with DDR5 increased by 15-20%, DDR4 increased by 10-15%, and DDR3 increased by 10%. The price increase was higher than what was initially predicted, but it will have an impact on consumer markets, which we will explain later on.

The memory industry is currently going through a "transitional" phase, as consumer shift from DDR4 to DDR5 as their primary memory standard. Moreover, the demand from the server markets has been pretty high as well, courtesy of the influx of artificial intelligence in the segment. Since next-gen standards such as DDR5 and LPDDR5 are moving towards being mainstream specifications in the markets, it looks like the upcoming quarters could turn out quite positive in terms of revenue and supply-demand market correction.

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