Adoption of the next-generation DRAM standard DDR5 is expanding, but an unusual trend has emerged with prices for the transfer-generation DDR4 rising more sharply. As demand for high-bandwidth memory (HBM) for artificial intelligence (AI) servers and high-performance DRAM surges, memory chipmakers have shifted production capacity to higher value-added products. Analysts say the AI era is changing the memory market's traditional pattern in which prices for older products fell when new ones were released.
According to market research firm TrendForce on the 13th, contract prices for commodity DRAM in the third quarter of this year are projected to rise 13%–18% from the previous quarter. While the pace of increase will slow somewhat from the second quarter, prices are expected to remain firm as investment in AI servers expands and supply shortages persist.
In the consumer market, the rise in DDR4 prices is also notable. According to the price-comparison site DANAWA, the lowest price for a 16-gigabyte (GB) DDR4 memory module from Samsung Electronics has climbed about 19% over the past month. DDR5 prices also rose during the same period, but the increase was smaller than DDR4's.
DDR4 and DDR5 are DRAM standards used in PCs and servers. DDR5 is a next-generation standard that improves data processing speed and power efficiency over DDR4, and adoption is growing, centered on the latest PCs and AI servers.
Industry officials say the biggest reason is that major memory makers such as Samsung Electronics, SK hynix, and Micron have shifted production capacity to higher value-added products like HBM and server DDR5. By concentrating limited production lines on more revenue-generating products, supply of commodity DDR4 has fallen rapidly.
Major memory makers are pursuing end of life (EOL) for DDR4 and are gradually scaling back production. In the PC market, the shift to DDR5 is progressing quickly, but DDR4-based systems remain widely used in existing servers, corporate PCs, and industrial equipment. Analysts say prices are rising as supply decreases while demand to maintain existing platforms continues.
In the past memory market, prices for older products typically fell when new products were launched. That was because inventory burdens grew as demand shifted to the new standard. Since the spread of AI, however, demand for HBM and server-grade high-performance DRAM has surged, prompting memory makers to rapidly pivot production lines toward higher value-added products, and in the process, supply of commodity DRAM has fallen more than expected.
The industry expects this trend to continue for the time being. Investment in AI servers is ongoing, and memory makers are prioritizing expansion of HBM and advanced DRAM production. With supply of commodity DRAM constrained while demand to maintain existing platforms persists, there is a view that DDR4's price strength will also continue for now.