As we have previously blogged about the price of DDR4 increased by over 200% in many cases during 2018. The official reason for the massive spike in prices is due to the exponential growth in demand for DDR4.
All modern PCs shifted to it following the launch of Intel Skylake back in 2015(technically Skylake worked with DDR3 too) and then AMD Ryzen just last year. More importantly though, most mid to high-end mobiles now use DDR4 which has caused these apparent issues with supply.
1x8GB of Corsair LPX 2400 MHz DDR4 currently costs over £90 on Amazon, but back in January last year it was just £48. The Corsair LPX 16GB 2×8 kit running at 3000 MHz has jumped from £90 to £192. The Ballistix Sport LT 16GB Kit (8GBx2) DDR4 2400 has gone from £93 to £176.99.
Samsung has announced new expansion plans, and it is possible we may see price reductions by up to 22.5% this year.
However, many, if not most people online have suspected collusion. The memory industry is controlled by three companies, Samsung, Micron and SK Hynix, so it is logical to conclude there may be some price fixing going on, which would be against the law. Some users have pointed out that price fixing may not be happening, but deliberately reduced supply is possible, which as far as I am aware is not illegal.
It would seem these rumours are not just restricted to frustrated PC owners of Reddit, but the Chinese National Development and Reform Commission’s Pricing Supervision Department have also started to get a little suspicious.
Routers have reported that the NDRC was alerted to the sharp rise in the price of chips over the last 18 months and they have announced:
“We have noticed the price surge and will pay more attention to future problems that may be caused by ‘price fixing’ in the sector,” the official Xu Xinyu was quoted as saying.
The newspaper added that the official referred to possible coordinated action taken by some firms to gain maximum profits by pushing the price of the product as high as possible.
A “super-cycle” of tight supply and soaring demand for memory chips, which power servers and smartphones, has been driving up prices and profits at chipmakers such as Samsung Electronics Co Ltd and SK Hynix Inc which control the lion’s share of the global market.
Obviously, the NDRC taking an interest in this issue doesn’t imply the chip makers have done anything wrong. However, as a PC user, I hope it may help reduce the surge in prices if the three chip makes think a government body may intervene.