Why are memory sticks getting more expensive? When will the prices drop?

From Q4 2025, the memory market is experiencing what is being called an "epic" wave of price increases. If you've been following the hardware market recently, you'll notice that the prices of both DDR4 and even DDR5 memory modules have doubled compared to a year ago, with some models seeing staggering increases of up to 1800%.

Loden will briefly break down the multiple logics behind this phenomenon for you.

## Surface Reasons: The Direct Drivers of Supply-Demand Imbalance

Judging by the market's visible performance, the price surge is primarily driven by the following three factors:

1.  **Explosive Demand for AI Computing Power:** Orders for HBM (High Bandwidth Memory) from AI giants like NVIDIA have taken up most of the production capacity of the three major manufacturers (Samsung, SK Hynix, Micron). The demand for memory from AI servers is several times that of traditional servers, leading to a contraction in the output of consumer-grade memory chips.
2.  **"Panic Buying" Downstream:** Mobile phone and PC manufacturers (e.g., Lenovo, Xiaomi, Dell), fearing even higher future prices, have initiated large-scale strategic stockpiling. Even new energy vehicle manufacturers (e.g., Tesla, NIO) have joined the rush to procure components, further driving up spot market prices.
3.  **Production Pains from Technological Iteration:** The industry is in a critical period of transition from DDR4 to DDR5. DDR5 production is more complex, and yields are still being optimized. This **capacity mismatch** causes older specification (DDR4) products to skyrocket due to discontinued production and shortages, while new specification (DDR5) products run at high prices due to high costs.

## Deep-Seated Reasons: Underlying Reshaping of the Industry Structure

If we only look at "shortages," it doesn't explain why the price increases are so aggressive. The deeper reasons lie in changes to the competitive paradigm of the memory industry:

### 1. The Profit-Driven "Great Migration of Capacity"

Memory manufacturers are no longer blindly pursuing market share but are instead chasing **higher profit margins**.

*   **Running the Numbers:** The unit price of an HBM chip is 5-10 times that of a standard DDR5 chip. For manufacturers, it's more profitable to allocate limited wafer capacity entirely to the AI sector than to produce low-margin consumer memory chips. This **proactive production reduction and shift** is the root cause of the "empty blood bank" in the consumer market.

### 2. Price Manipulation Power Under an Oligopoly

The global DRAM market is now highly concentrated. After the downturn of the previous few years (2022-2023), the giants were saddled with massive losses. The current price hikes are not just a market phenomenon; they are a coordinated **"blood replenishment plan"** by the big three. By controlling the pace of supply, they significantly enhance their bargaining power.

### 3. Cost Pass-Through of "Raw Materials + Geopolitics"

While the prices of basic materials like silicon wafers are relatively stable, the cost of special electronic gases and the maintenance of extreme ultraviolet (EUV) lithography equipment required for advanced manufacturing nodes have risen significantly due to geopolitical factors. These hidden costs are ultimately passed on to consumers through the final products.

## Core Objective: From "Clearing Inventory" to "Restructuring"

Regardless of whether the current price surge is manufacturer-led, their intentions behind pushing for these increases are very clear:

1.  **Recouping Cyclical Losses:** The memory industry is highly cyclical. Manufacturers need to capitalize on the current AI wave to recoup the profits lost over the past 5 years within the next 2 years.
2.  **Forcing Technological Upgrades:** By drastically increasing the prices of older products, they force consumers and OEMs to adopt new products, thereby completing a thorough upgrade of the industry chain.
3.  **Locking In Long-Term Contract Customers:** High price volatility forces large customers to sign long-term, high-premium supply agreements, ensuring stable revenue for memory makers for the next few years.

## Trend Forecast: When Will Things Return to Normal?

Based on current industry data and production expansion cycles, my predictions are as follows:

*   **First Half of 2026:** Prices will **remain high or continue to climb slightly**. The capacity crunch from HBM3/HBM4 production will peak, and market demand will still outstrip supply.
*   **Second Half of 2026:** Prices will **enter a plateau, with the rate of increase slowing**. New capacity from manufacturer expansions (e.g., Samsung's P4 factory) will begin initial mass production, marginally easing supply pressures.
*   **First Half of 2027:** Prices will **see a substantial decline**. Higher-tier production capacity from domestic manufacturers (e.g., CXMT, YMTC) will ramp up, challenging the pricing power of international giants through local alternatives.

## Advice

Current memory modules have acquired a certain "investment attribute." If you are not in urgent need of an upgrade, it is advised to avoid the price peak expected in the first half of 2026. If you must purchase, prioritize brands using domestic memory chips, as they offer better性价比 (cost-performance ratio) during this wave of price hikes.