Soaring costs of DDR4 memory chips occur as manufacturers discontinue production, causing a spike in demand due to panic buying and stockpiling, leading to a noticeable rise in DDR4 market prices as the supply becomes scarce

In the dynamic world of technology, changes are constant. This is particularly true in the memory market, where top suppliers like Samsung, SK hynix, and Micron are making a significant shift. They are winding down DDR4 production to focus on the next generation of memory, DDR5, and high-bandwidth memory (HBM).

This transition is causing a surge in DDR4 prices. Contract prices for DDR4 are expected to continue rising through the end of the year, with DDR4 16GB (2Gx8) parts increasing by nearly 7% in August, pushing prices to $9.17 per chip. This pricing surge is more about supply being deliberately throttled than demand suddenly spiking.

On the other hand, DDR5 (2Gx8) 16GB decreased by 3% in August, with prices at $5.99 per chip. The gap between DDR4 and DDR5 prices has widened to almost 50%, making DDR5 a more cost-effective choice for newer systems. DDR5 offers better price-to-performance and will remain the only viable platform moving forward.

The reduction in DDR4 production is leading to engineered scarcity and increased prices for DDR4 users. However, Adata Technology predicts a DDR4 demand rebound in September after inventory digestion.

Meanwhile, NAND flash prices are expected to remain firm as capacity expands cautiously. Limited fab allocation ensures that contract prices for DDR4 will trend higher into Q4.

For those building systems based on AM4 or 12th/13th Gen Intel platforms, it may be beneficial to purchase DDR4 now if a capacity upgrade is critical, as prices are expected to continue climbing.

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