Gadgetory

while researching GPU prices and learning that gddr5 memory price has increased by twenty to thirty dollars on the Bill of Materials cost lately we started looking into rising system memory prices as well RAM pricing has proven somewhat cyclic over the past few years we've reported on memory price increases dating back to 2012 and have done so seemingly every two years since then this research piece pulls five years of trend data working in collaboration with PC part picker as we investigate why memory prices might be increasing and when we can expect a decrease along with other information this video is brought to you by the gamers Nexus anti-static mod mat our mod mat uses a high quality anti-static surface with a rubberized finish we also have a custom paint job on it which includes reference points and cheat sheets for PCIe eps 12 volt and other power cables along with quick reference throne paste application guides a screw sorter for your video card tear downs and it includes a common ground point and a grounding strap to help protect the products you are working on from electrostatic discharge preorder your mat now at the link in the description below memory prices and GP prices have made it basically impossible to build a cheap PC lately when you have DRAM prices that have gone up two to four times in the last year or so it's getting a bit unattainable so what we have to first set the stage and put things in perspective is a table of our own memory purchases over the last couple of years where we can see the appreciation and value of those sticks of memory that we bought and here's that table of memory that GM staff members have purchased over the past seven years alongside the percent increase and the per month appreciation of the kits in 2011 Patrick bought a ddr3 1600 CL 9 kit for $44 an 8 gigabyte capacity that kid is now available for $80 an 80% increase or an appreciation of 50 cents per month I bought a ddr4 2400 16 gigabyte kit in 2016 for 81 dollars and it's now increased 143 percent in price when at 196 dollars today that's an appreciation of 2 dollars per month if you bought a truckload of memory in early 2016 you could have had better gains than some stocks and you could even sell it nearly for retail price after using it for the whole period the most egregious case was Patrick's $65 ddr3 1866 purchase in 2016 which is now a hundred and eighty dollars now for kits don't make a big enough sample size to call trends or anything like that but we have aggregate data for far more than the four kits we just looked at typically something like an increase in ddr3 price for example would be spurred on more by the industry's switch to ddr4 and the tapering off of ddr3 production these things generally would lead to a slight increase in price however this increase is insane and ddr4 has also gone up so this is more than just a downtrend in product popularity causing a spike in price because ddr4 has gone up as well and the prices really drive the point home again it's really hard to build a cheap computer right now largely because of memory it's one of the components that you can't really skimp that much on it without cutting out some performance at some level just to one more time drive it home and put it in perspective though we bought one of the cheapest eight gigabyte sticks of memory available recently like a few weeks ago for an in-house build that stick of memory for us the same quantity was two times the price of a two by four gigabyte ddr3 kit that we purchased seven years ago so that's the state of the memory right now the launch price of ddr4 is basically at parity with the price it's at today there has been no downtrend in price over the last three years actually it's about four years now so yeah it's fair to say the industry's in rough shape with DDR but we can look into why and see if there's a trend here and when it might go down let's get into some short-term charts and then we'll dive deep with the charts that PC part paper generated specifically for this research piece the company automatically generates price history graphs for each of these kits and all of them trend upwards on all retailers logged primarily new egg and new eggs third-party sellers if you include them there's a page with graphs recording general trends rise by memory speed and capacity which proves that the prices of our kits aren't just flukes 2x8 egg whites ddr3 1866 kits really have increased by a hundred and seventy five percent in retail price probably made worse by manufacturers shifting to ddr4 production while customers desperately try to save money by buying ddr3 for older systems each of PC part pickers public charts are for an 18-month period and more limited in what they reveal we reached out to BC part pickers seeking some longer-term numbers and they weren't able to share raw data but they did agree to generate some graphs for us the next few charts were generated for gamers Nexus by PC Bart Baker and show a five-year time period spanning 2013 to 2018 we specifically requested this time period as it includes the 2013 SK Hynix factory fire which was assumed to be a heavy player in the then rising DRAM prices and the first graph tracks to four gigabyte sticks of ddr3 1600 megahertz kits like the one we bought in early 2011 there's been a clear cycle of rise and fall since at least early 2013 which is mildly reassuring in a big-picture sense it almost looks cyclic which if that's true would mean we can expect an eventual downtrend there's a probable end to the pricing madness but we just don't know exactly when that'll be the second chart from PC part picker includes the high necks factory fire in September 2013 something will highlight which caused a brief spike in prices but it also reveals that there was already an upward trend that seemed to have regained stability after October of that year manufacturers had no inclination of lower prices after recovering from the fire and prices were painful until ddr4 was introduced in September 2014 and that's roughly where prices leveled out and began to drop but there doesn't seem to be an overall downward trend in price that you might expect from old tech in 2014 we wrote an article predicting mass adoption and switch over from ddr3 to ddr4 in 2016 which largely came to be true however these graphs are of prices not sales numbers so we only have half the data the second graph is a 2 for gigabyte ddr4 sticks which don't have the benefit of ddr3 s'long sales history ddr4 was only sold beginning in 2014 and there were relatively few kits available for tracking so the price average fluctuates more sharply towards the starch with a smaller sample sizes taking in isolation this looks like a nightmare - for gigabyte ddr4 sticks caused almost as much as they did when they were first introduced with no indication of leveling out when lined up with the previous ddr3 chart the prices are clearly following the same cycle the problem with DRAM prices isn't simply dollars per gigabyte although that's part of it in an ideal world the price per gigabyte of memory would decrease at the same rate that the desired capacity increased in other words a run-of-the-mill memory kit would always cost the same amount as price has fluctuated it seems like desired capacity has increased steadily and this is evidenced by some old articles in 2009 for example life hacker was posting articles about whether or not four gigabytes of memory was really necessary only six years later they were debating the same thing with 16 gigabytes I'll be it with a different conclusion the thing customers are really complaining about is the price of a reasonable amount of memory which is subjective and harder to track what we're gonna do next is walk through a list of key contributors to memory supply and pricing today and these will break into a few categories primarily supply and demand and then subcategories of each for starters supply starts with limited manufacturers in 2018 only three significant DRAM manufacturers remain in business Samsung SK Hynix and micron Sam Sun is responsible for about 45 percent of all DRAM manufacturing right now so most of it and SK Hynix and micron respectively are at 29 percent and about 21 percent each so Samson's got most of it but there's really only three smaller companies exist Nonya for example provides memory chips for SSDs the cache d ram that's on there but it's really only three companies that are relevant to us four sticks of memory that go into system memory slots this consolidation has made the market more stable but it's also made price-fixing potentially easier the stock prices of the two smaller companies which we can show now blot micron and SK Hynix lining up nicely with the price charts previously shown comparing a five-year period if we superimpose one of those PC part Picard charts to really illustrate a point there's a real trend of supply and demand at work here it's not arbitrary the next supply category is that of price fixing price fixing is when manufacturers intentionally conspired to keep prices high rather than competing in a way that benefits consumers the terms price fixing and price gouging both have legal definitions and should be used carefully and the DRAM industry in the past has paid out damages for price fixing we've reported recently about the Chinese government's investigations into allegations of drm price fixing recently something that again happened before samsung once had to pay out 300 million dollars because of it in 2005 and then another 110 million in 2014 alongside micron hynix Infineon NEC and Toshiba totaling 310 million the catch is that the fixing in question occurred years earlier between 1998 and 2002 the only tangible result for consumers was a payout of a few dollars apiece and the fines are low enough that we alleged crimes that may well justify anti-competitive and anti consumer actions production limitations are the next category this one is particularly interesting because drm like cpus and gpus is an advancing business the silicon manufacturing for example has refinements regularly as the fabrication process changes and then we go through node or die shrinks so production then is a big issue here with memory pricing and availability as one factory or group Samsung hynix or micron decides to update its production lines its node that it's on they do have to take out some of their manufacturing capabilities during that time to make the switch over it also means that they're now fabricating different processes out of the same factory so you supply different types of memory each of which will be in less supply than when the factory is fully switched over so this is a big contributor and because there are three companies it comes down to a question of who wants to change first because the minute one of them take part of their production lines an update or to expand and build a new factory which is a different question altogether the other ones have an opportunity to gain market share this would be a good time for example if Samsung does it for hynek's or micron to try and increase their supply output and gain market share in the DRAM market so this has an impact on price as it has a direct impact on supply the final category is disasters this hasn't been a problem lately but in September of 2013 a fire at SK Hynix is factory caused an immediate jump in DRAM prices and a dip in hynek's stock the changes were huge at the time summarized well by a bleak extreme tech report but they corrected within a few months it's possible for natural disasters to have more significant and widespread effect as the floods in Taiwan proved with the hard drive industry several years ago now we get into demand this is split into a couple of categories as well one of them one of the less important ones actually the least impacting out of the ones we're listing is mining crypto mining gddr5 memory prices have skyrocketed recently this is a question of a few things mostly just supply because now you have every cell phone using a lot of memory in it it's all the same chips as in your memory modules as in your GPUs they all come from the same place so crypto mining alone has increased demand slightly not as much as some other things but each of those cards is using four to eight gigabytes of memory coming from the same three places as your system memory the price and gddr5 for example for an 8 gigabyte GPU has gone up about 20 to 30 dollars for the manufacturer to pay which is massive typically they only see $5 fluctuations so this is another contributor to memory prices because the same fabs make all the same components splitting fab time between more devices SSDs are also a contributor they have increased an adoption for desktops but more importantly nearly every laptop now ships with SSDs for primary storage every phone uses flash memory for storage Apple has completely switched over to SSDs or nearly completely and other mainstream notebooks in affordable price classes are now using 128 to 512 gigabyte SSDs as a baseline component like GPUs these components come off the same production lines as demand for GPUs Rises as it rises for phones and SSDs the price is going to be affected for system memory another demand indicator is system specifications the official minimum for Windows 10 is only 2 gigabytes of RAM but minimum specs for new software and games obviously increase over time that doesn't explain that current price is outright but along with the arrival of ddr4 it does explain why anyone bothers to buy new Ram at all ddr3 sticks aren't compatible with modern motherboards or CPUs that creates demand for new memory and customers have to pay for it whether they want it or not they also have to pay for the new 8 gigabyte requirements in some cases or strong recommendations and 16 gigabytes in the case of some higher-end games with ddr3 one can reliably transition between architectures and reuse memory which is a luxury lost in the past years the final demand category is mobile devices smartphones don't individually carry much memory but they make up for it in sheer quantity Samsung's Galaxy s4 launched with 2 gigabytes of RAM in August 2013 and within six months it had sold 40 million units the iPhone 6 and 6-plus launched a year later and I've sold more than 220 million units combined to date in the first quarter of 2017 380 million smartphones were sold and a first quarter 2017 PC sales were 62 million DIY PC sales are still a tiny minority compared to the pre-built market and the number of devices that require memory servers for instance or divert manufacturing capacity away from ddr4 sticks entirely like smartphones is rising even as the PC market either stagnates or declines excluding high-end gaming PC's we're not fortune teller so we can't tell you where DRAM prices will be tomorrow or in the next year and we're not market analysts we're journalists so we pull all the data and take a look at it from there if the market shakes out the way it did in 2013 and 2014 it would appear that 2018 would be a year of steady prices possibly some decline in 29 this also correlates with some reports that we've seen online from market analysts so at this point keep an eye out for financial news but it does look like the hynek's and micron stock prices are loosely correlated with the price over DRAM over the last few years so they're benefiting to some extent from this Samsung's harder to compare because they make literally everything so their stock price doesn't change as much just from DRAM prices even though they do make most of the DRAM in the industry either way though the long term charts make it clear this is somewhat cyclic even if it's not beneficial right now this is something we talk about every couple of years the prices will come down it sucks that they're high there's not a lot we can do about it for now other than try and reuse RAM where possible and for those of you upgrading to ddr4 I'm sorry you picked a bad time but hopefully we'll see a decline in 2019 I don't know about before then we'll see maybe it's always possible that some major event in the industry would change in a way that prices can be affected immediately more likely long term as production changes factories change things like that we'll see the updates further down the road than today but hopefully this gives you some basic information on why the DRAM pricing is the way it is even from affiliate data from what we've seen you all purchasing through affiliate links the adoption of 16 gigabytes has really gone down in the last couple months it's it's kind of going backwards we were seeing a lot of a 2x8 gigabyte kits being sold and suddenly we're back to two by four gigabyte kits because that's all people can afford which is completely reasonable so that's it for now you can subscribe for more as always the full article for this is in the description below and if you want to help us out directly go to patreon our comic Amber's Nexus thank you for watching I'll see you all next time