- DRAM spot prices are going down.
- The Chinese government has taken action against smuggling in the spot market.
- DRAM inventory is also overloaded, leading to prices going down.
The memory market is primarily split into two segments, each of which has its own subdivisions. The first one is where the steady pricing is often fixed for a quarter. After which, they are reassessed for the following one, and so on.
The spot market, on the other hand, typically moves ahead of the first and does not follow its trends. The prices of RAM and NAND Flash are starting to fall lower on this spot market.
Why it matters: This trend will slowly bring down memory prices for the average consumer.
According to the analysis report by TendForce, the first reason is that there is already a massive amount of inventory in the market.
The Chinese Government’s actions against the smuggling of refurbished DRAMs further affect DRAM prices since the reconditioned hardware enters a deplorable state that fails after a short time.
The contract market is where everything that is produced is sold since the production is at a minimum to artificially increase the price and ease the billion-dollar losses from two years ago.
The spot market is currently flooded with memory, including DRAM and NAND Flash, so the price logically drops to encourage purchases.
However, it is good to see that Kioxia has chosen the opposite course and has increased production to incredible levels.
As a result, we have seen the spot and contract markets moving towards a similar point for the first time in over a year. This will result in consumers paying less for the RAM that we purchase, whether it be for mobiles or SSDs.
For the reasons outlined above, uplifts in this spot market are actually not anticipated for some time.
In fact, if Kioxia cracks the contract market, some organisations may choose to use one or the other, depending on the final costs. That would help drive down the price even more.
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