As we surely know by now and you have not read us much, the NAND Flash market where VRAM and RAM are included has a curious functioning due to the market itself and the volatility of events. We have the so-called “contract market” and the “sports market“, Basically because nobody wants to waste money and the price is adjusted every now and then, so what is signed is filled in volume with tokens and little else really. Therefore, the latest reports suggest that GPU memory will change its prices and even grow in double digits.
Contracts will rise and lead to an indefinite rise for the spot
What we do know, at least from the report provided, is that contracts for the price of the most demanded VRAMs such as GDDR6 and GDDR6X will increase. In other words, the volume and price agreements will be reviewed in the so-called contractual market mainly for two main reasons: the volume of supply was only 30% and, on the other hand, the shortage of supply will persist for at least another quarter. .
Consequently, the prices will be revised upwards between a 8 and 13%, which means that at least we’ll have that upside no later than the middle of this month and an actual estimate in the spot market that will surely be higher.
These two numbers show that, at the very least, it will be upward, but they do not logically set a maximum, rather the market is left to fluctuate to make more money with a larger increase in these values.
Four factors to explain the price of VRAMs
TrendForce lists up to four factors for everything that has been discussed so far. The first is that the demand in the PC market continues and will continue to be high (which is normal considering that there are no GPUs in stock), while on the other hand we have the fact that the RAM vendors have prioritized the allocation of production to NVIDIA because the latter does not understand its GPUs if there is no VRAM available, that is to say they go from peer.
Third, and apparently the industry has to choose between producing 8GB or 16GB chips, as they share manufacturing processes, so the volume of the Xbox Series X and PS5 tips the scales to respond. to the needs of both users with these consoles.
Finally, the servers have become hungry for RAM due to the growing needs of the sector and it is stipulated that with the new platforms from AMD and Intel and their processors, the sector will have a much higher and growing demand at least until ‘in 2023.
Apart from these points, there is the decrease and almost zero production of GDDR5 and other minority VRAMs, since the market has shifted in its entirety to GDDR6, so although it may seem the opposite in the current state from the market, it means that the prices of the former are dropping, while those of the memory of interest are now increasing due to the lack of options and the huge demand.
What increase in the price of VRAM are we really talking about? Since GDDR6 is one of the most expensive components of any GPU (let’s say not GDDR6X), the rise in GPUs is going to be noticeable in quite a few dollars, so even if there is stock in a few months , the price will remain high.
