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Graphics memory component prices rise 30 per cent in August

by Mark Tyson on 17 August 2017, 10:20

Tags: Samsung (005935.KS), SK hynix, Micron (NASDAQ:MU)

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According to a new report published by Taiwanese computer industry journal DigiTimes, the price of memory chips for graphics cards has risen over 30 per cent this month. We have already seen the effects of the cryptocurrency miner demand on mainstream graphics cards, pushing prices higher than launch RRPs - if any stock of such cards becomes available.

Whatever the other reasons behind the current rise, likely to be demand related, things don't look like they will improve in the near future. DigiTimes says that "RAM industry leaders Samsung Electronics and SK Hynix have allocated part of their VGA RAM production capacities to producing memory for servers and handsets," adding fuel to current the RAM price rally.

Most tech followers will be aware that Apple and Samsung have some big smartphone launches due shortly. These new devices will sell in their millions and pack more RAM than ever before. Looking at server RAM production - Samsung's server RAM used to account for 12 per cent of its output, now that has risen to 27 per cent.

Upstream supply chain sources reckon September will see prices push higher still, with shortages impacting graphics board makers and gaming laptop makers (and their customers) particularly badly.

We may see at least a pause in the ascent of video card memory component prices at the end of this year / early 2018. Around this time Samsung is rumoured to be expanding its VGA RAM production capacity. Currently, "Samsung supplies around 55 per cent of worldwide VGA RAM shipments, followed by SK Hynix at 35 per cent, and Micron Technology at 10 per cent," reports DigiTimes.



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August quotes for RAMs used in VGA graphics cards have risen to US$8.50, up by 30.8% from US$6.50 in July. Both RAM industry leaders Samsung Electronics and SK Hynix have allocated part of their VGA RAM production capacities to producing memories for servers and handsets, fueling the price rally.

Sources from the upstream supply chain expect the pricing to go even higher in September and the shortages will pose a great challenge to graphics card and gaming notebook players over their abilities to handle component inventory.

Currently, Samsung supplies around 55% of worldwide VGA RAM shipments, followed by SK Hynix at 35% and Micron Technology at 10%.

Gaming notebook models in the price range of US$799-899 are usually equipped with Nvidia's GeForce GTX 1050 GPU, which uses four RAMs, while models priced between US$999-1,099 are mostly equipped with a GTX 1060 GPU, which uses six RAMs, and a GTX 1070 GPU needs eight. The higher-end the models, the higher costs they command.

The sources pointed out that solid state drive (SSD) prices had been rising during the past 12 months but are expected to stay flat or drop slightly in the third and the fourth quarters as Hynix's transition to a newer-generation of manufacturing process is becoming stable.

Following the shift of part of its RAM capacity from the graphics card segment to the server segment, currently the server RAM accounts for 27% of Samsung's overall RAM capacity, up significantly from 12% originally.

Although Samsung is rumored to be expanding its VGA RAM capacity in the fourth quarter, the sources pointed out that the related product sales in the fourth quarter will still be seriously undermined as most of the production is done in the third quarter.

That would indicate GDDR type memory not HBM2 which AMD and Nvidia use in some cards.

Since GDDR5 is used in most graphics cards,I would suggest if you want a card now,it might be worth getting one of the cheaper pre-order deals on a AMD or Nvidia card floating about now.
It's almost like companies are working together so we don't upgrade our hardware….then complain because ‘the pc market’ isn't buying as much.

There's only so much price gouging consumers will take before they just say screw it and stick with what they have.
Should I get an RX 580 now? Or see what else comes at the same price point in the next 6-12 months?
Amazing how they all seem to work together to do this at the same time? Who is pulling the strings? Just imagine AMD had that attitude with their CPU line up, we would also be paying the same as for Intel. Is there only one manufacturer of GPU GDDR? There should be some investigation of price collusion. It seems that the PC component industry in general has reached some sort agreement not to compete on price anymore. Profiteering controlled by one central dictator.
Considering that apart from the 1080ti release we haven't had anything competitive in the GPU department for over a year, I'll stick with my 1070 unless AMD cut the VEGA 64 to £350 so I can sell the 1070 for it and get freesync. ATM my most needed upgrade is CPU, 3570k is starting to not cut the mustard anymore, however I hope Zen+ or Coffee/Ice lake make my upgrade worthwhile.