DDR5 memory prices expected to go down in the next Quarter

DDR5 memory was introduced with the launch of Intel's 12th Generation Alder Lake processors. However, the introduction of next-generation memory comes with a price premium over DDR4, which has only…

By Nivedita Bangari

December 16, 2021

3 min read

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DDR5 memory was introduced with the launch of Intel’s 12th Generation Alder Lake processors. However, the introduction of next-generation memory comes with a price premium over DDR4, which has only been exacerbated by the chip shortage. With this in mind, TrendForce released its latest DRAM market analysis, and things are looking up for Q1 2022.

While notebook shipments are projected to exceed expectations in the fourth quarter of 2021, the normal Q1 decrease will be in full swing at the start of the year. At the same time, PC OEMs are constantly adjusting their PC DRAM inventory levels to meet the demand for both laptops and desktops. As a result of the delicate mix of consumer demand, cyclical downturn, and DRAM suppliers seeking profits, TrendForce predicts a 5 to 10% decline in PC DRAM pricing (DDR4) in Q1 2022. DDR5 prices, on the other hand, are expected to drop by 3 to 8%.

DDR5 memory prices expected to go down in the next Quarter

The bad news for those hoping to get on the DDR5 bandwagon is that the average selling price (ASP) of the modules will not change substantially. Given Alder Lake’s brief tenure on the market, TrendForce attributes this to a “poor penetration rate.” Customers may now choose between DDR4 and DDR5-based motherboards, with the first Alder Lake processors arriving in early November.

The situation should improve once suppliers ramp up DDR5 production and Intel begins to flood the market with additional Alder Lake processors. Similarly, once AMD Zen 4 processors are released, we may reach a tipping point in the industry’s adoption of DDR5 modules. DDR5 is expected to become the preferred memory for PC systems by 2023, or 2024 at the very latest, according to Samsung [PDF].

In the server industry, it’s projected that prices will drop by 8 to 10% in Q1 2022, with the maximum values expected for the calendar year 2022. “On the other side, due to lower demand, DRAM manufacturers’ inventory of server DRAM has been gradually rising in 1H21,” TrendForce adds. “In addition, certain vendors have boosted their wafer input for server DRAM products, resulting in increased production.”

Suppliers of graphics DRAM are gradually transitioning from 8Gb to 16Gb chips, with Micron leading the way. As a result of their widespread use in consumer graphics cards, 8Gb chip pricing has lately risen. “As a result of the rise in spot prices, the aforementioned demand downturn, and Micron’s intention to scale back production for 8Gb chips, prices of graphics DRAM products will be reasonably restrained from falling further,” the market research organization says. As a result, in Q1 2022, graphics DRAM costs are predicted to remain mainly stable.