The research firm said that “RAM buyers now have relatively high inventories due to storage in the first half of the year”. Prices are still expected to continue to rise across the industry (and this includes computer hardware, servers, and graphics, but also cell phones and consumer electronics) over the course of of the third quarter of the year, but the news is that they will not increase as much as initially expected.
The price of RAM continues to rise … but not that much
In some cases, this means TrendForce expects single-digit price increases in the third quarter of the year, when they initially said the RAM price increase could exceed double digits ( this means the price will increase by less than 10% when they initially predicted it would be considerably more). The only exception would be the DRAM market for mobile telephony, which according to the firm could see a higher price increase than it already suffered in the previous quarter due to a lower level of supply.
A price increase is always a price increase, and higher RAM prices will continue to make the end products that users buy more expensive than expected, especially for PC upgrade enthusiasts (assuming they find a processor, GPU, and storage at reasonable prices). But the good news is that it looks like at least prices are starting to stabilize.
From there, things could finally get better. TrendForce said they believe the supply of RAM will continue to increase in the fourth quarter, which will lead to further reduction in price increases or may even lead to pressures and inventory levels that will stop them, resulting in should be good news for everyone except, of course, the memory manufacturers who benefit tremendously financially from this situation.
When will the bubble burst?
We are living in strange times; Between the COVID-19 pandemic, component shortages, and supply chain issues, there are times when it’s extremely difficult to get hold of PC hardware, at least at reasonable prices. This has elicited various reactions from manufacturers, and the main pillars of the industry are getting to work with multi-million dollar investments to increase their production capacity.
The problem is, there will come a time when demand slackens and supply greatly exceeds demand, driven by these increases in production capacity that they are working on … and at that point, the bubble will burst. The time will come when supply will be so greater than demand that prices will have to fall for manufacturers to dump inventory, and that will be the time when purchasing PC hardware will be cheaper than ever.
Now when do we get to this situation? It’s hard to know, but if you consider that the big guys’ plans end between 2023 and 2025, it will only be after that that we finally reach the point where supply is so much greater than demand that prices will drop.