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Why DDR5 RAMs are extremely expensive?

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DDR5 is already available, but those who tried to get on board early have been met with expensive pricing and limited quantities. TrendForce published an examination of the present RAM market in search of glimmers of light for DDR5 — but the results were lukewarm at best.

According to Tom’s Hardware, when MSI published a guide to DDR5 RAM, it included an estimate of how much it will cost to upgrade. The price of DDR memory normally rises by 30-40% from one generation to the next, however, that’s not the case with DDR5. MSI predicted that the price of the new modules will be 50-60% higher than DDR4 due to the added components.

If you’re an early adopter, this is terrible news, and it could get even worse if the present worldwide supply issues apply to RAM modules. If you don’t plan on upgrading your PC anytime soon, MSI gave some good news for you: the company predicts DDR5 will be cheaper than DDR4 in two years. 

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Via crucial.in

While the overall cost of DDR5 memory may decrease, the average selling price is unlikely to change.

PC OEMs are attempting to manage their stocks in order to maintain a suitable balance between laptop and desktop sales, according to TrendForce. Despite the fact that demand for laptops remains strong, TrendForce anticipates a cyclical overall reduction in DRAM prices. DDR4 is expected to drop by 5 to 10%, whereas DDR5 is expected to drop by only 3 to 8%. One might expect cheaper pricing for customers as a result of this, but this is not the case.

The “poor penetration rate” of DDR5 at the time is the key reason PC builders will continue to pay a higher average retail price (ASP). Because Intel’s Alder Lake processors are still relatively new, there aren’t many DDR5-capable motherboard options yet. Furthermore, many PC builders will continue to use DDR4, especially because it remains a viable value proposition.

teamgroupdd501 416x416 1
Via icdn.digitaltrends.com
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It’s not solely because of Alder Lake’s recent publication that the problem exists. AMD’s Zen 4 line of processors is yet to be released, which could help DDR5 memory uptake. This is also contingent on vendors’ ability to supply DDR5 modules, which is currently hampered by the current semiconductor scarcity. Due to economies of scale, the plethora of DDR5 modules, paired with the latest processors from AMD and Intel, may help lower prices.

Despite this, it appears that OEMs are attempting to arrange supplies as a result of the overall price drops. According to TrendForce, some OEMs have begun shifting some production from mobile DRAM to desktop PC DRAM as mobile DRAM prices have fallen. In the long run, this should result in increased supply for customers.

Consumer DRAM prices aren’t the only ones who are affected. Due to rising demand, TrendForce predicts that server prices would rise. The demand for server DRAM in data centres has increased as cloud computing and hybrid remote work become more popular.

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Via 5.imimg.com

Finally, manufacturers have gradually shifted from 8GB to 16GB graphics DRAM modules. Micron has been at the forefront of this change, owing to increased demand for 8GB in consumer graphics cards.

The Nvidia RTX 3060 Ti, RTX 3070, RTX 3070 Ti, AMD Radeon RX 5700, and AMD Radeon RX 5700 XT all come with 8GB of VRAM. As a result, 8GB of graphics card modules have become more expensive.

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