A price anomaly is occurring in the DRAM market. Older DDR4 technology, rather than getting cheaper, is becoming more expensive than more modern DDR5 modules. Manufacturers, focused on serving the lucrative artificial intelligence sector, are cutting back on production of older chips, leading to shortages and forcing buyers to pay a premium for the going down standard.
Until recently, it was natural for the price of older generations of computer components to fall. However, we are now seeing the opposite situation. The supply of DDR4 memory is shrinking rapidly as a direct result of strategic decisions by the largest players in the market.
Manufacturers such as Samsung and Micron have officially communicated plans to extinguish DDR4 production lines to free up capacity for more advanced and profitable technologies.
The main driver of this change is the unprecedented boom in the artificial intelligence sector. Data centres and computing systems used to train AI models require massive amounts of high-bandwidth memory (HBM) and the latest DDR5 modules.
It is the production of these components that global leaders are now focusing on, as they bring much higher margins. Demand for HBM is so high that manufacturers already have sales contracted for the entire year 2025.
As a result, the availability of DDR4, a standard still widely used in millions of computers and server systems worldwide, especially in the budget segment, is suffering.
Reduced supply with still existing demand has led to a situation where contract prices for DDR4 chips exceed those for faster DDR5 dice. Device manufacturers who still base their products on older DDR4-only compatible processor platforms have no choice but to accept higher prices.
The situation in the global memory market is further complicated by geopolitical tensions. Recent decisions by the United States to restrict technology transfer to South Korean companies’ factories located in China may affect the cost and efficiency of production in the future.
While it is difficult to assess the full implications of these moves for now, analysts point out that any form of supply chain disruption could lead to further price volatility in a market that is already grappling with the profound transformation dictated by the AI revolution.
