DDR5 Price Set to ‘Substantially’ Narrow Gap With DDR4

Slowing demand for client PCs, dropping prices of memory as well as increasing supply of DDR5 memory chips will shortly shrink the gap between prices of DDR4 and DDR5 memory modules, according to a report from DRAMeXchange

Dynamic random access memory (DRAM) prices have been trending down for a while due to oversupply, but in April to June timeframe they dropped steeply as PC makers and resellers reduced their purchases to lower inventory levels. Many companies have anticipated demand for client PCs to soften due to geopolitical and macroeconomic tensions.

As a result, contract prices of DRAM deteriorated and DDR5 prices dropped more significantly than DDR4 prices. For example, in the second half of July contract price of an 8GB DDR5 module fell 18.75% (to $32.5 on average) compared to the previous period, whereas contract price of a 8GB DDR4 module plunged by 13.19% (to $25 on average). 

A $7.50 difference between contract prices of an 8GB module is still quite significant as it will translate to about $15 in case of a 16GB stick. In retail, that difference will easily grow to almost $40, which is significant. But the price gap between DDR4 and DDR5 will shrink between the end of 2022 and early 2023, reports DigiTimes. This correlates with AMD’s expectations for DDR5 prices which the company communicated when it launched its Ryzen 7000-series CPUs based on the Zen 4 architecture earlier this week. 

Today, DDR5 memory costs noticeably more than DDR4 memory, which makes it alluring for DRAM producers to increase DDR5 supply and capitalize on the difference. But with more DDR5 memory chips on the market, their price (and price premium compared to DDR5) will get lower. Therefore, DRAM houses are expected to expand DDR5 supply gradually in a bid not to collapse its price. Meanwhile, as they boost DDR5 chip sales, competition heats up and prices tend to come down in this case.

Eventually, this will affect prices of actual memory modules (including enthusiast-grade memory modules for desktops featuring AMD’s Ryzen 7000 or Intel’s 13th Generation Core CPUs). The only question is how quickly the market of high-end DDR5 DIMMs will come down as a result of intensified competition between module houses like Corsair, G.Skill, Geil and TeamGroup. 

In fact, competition between module makers has already shrunk difference between some dual-channel 32GB DDR4 and DDR5 kits to 16% and in some cases high-performance 32GB DDR5-6000 memory kits cost less than 32GB DDR4-4000 kit.

Going forward the gaps between DDR4 and DDR5 memory will shrink further, though we do not expect DDR5 to get cheaper than DDR4 any time soon.

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