Summary:
- Soaring Prices: Memory sticks, especially advanced HBM types, now have skyrocketing prices surpassing traditional gold investments.
- Industry Impact: The rising cost of memory is affecting various sectors, including mobile phones and automotive electronics.
- Future Projections: Prices are expected to remain volatile, with improvement not anticipated until after 2027.
The Surging Value of Memory Technology: A New Financial Frontier
Recent reports highlight a significant transformation in the memory market, where memory sticks are now being likened to "electronic Moutai," reflecting their soaring prices—rising by over 100% and outpacing the value of gold bars. This unprecedented surge has established memory sticks as the latest trend in financial management products.
According to industry experts, the chairman of ADATA acknowledged a complete depletion of memory stock, indicating an extraordinary market situation unseen in over three decades. This current scenario is a result of a yearlong price escalation, which has markedly exceeded even gold, largely influenced by prior production decisions made by leading manufacturers.
The Dynamics of Supply and Demand
In hindsight, major players like Samsung, Hynix, and Micron had previously agreed to expand production in 2020. However, by 2023, they collectively decided to cut back on production. This shift has contributed to dwindling inventories, laying the groundwork for a price surge.
The fundamental driver behind these price increases is the rapid advancement of artificial intelligence (AI). While traditional memory, such as DRAM, plays a role, the standout technology generating buzz is High Bandwidth Memory (HBM). Think of DRAM as a standard desk, while HBM is a "super desk" composed of multiple stacked units that offer remarkable speed and bandwidth through 3D stacking.
Unmatched Performance of HBM
To illustrate, current consumer-grade high-end memory (DDR5) achieves transmission speeds of around 100GB/s, while leading civilian graphics cards boast figures up to 1800GB/s. The cutting-edge HBM3E, utilized in AI chips like the H200, can reach a peak bandwidth of an astonishing 4.8TB/s. This incredible performance has created a frenzied demand for HBM as countries like China and the US escalate investments in AI technologies.
Nvidia, the only company in the world with a market capitalization exceeding $5 trillion, is among the most aggressive buyers, securing HBM components for its AI projects. Crucial initiatives like OpenAI and "Stargate" are closely monitoring HBM supply, as high-performance GPUs depend heavily on these memory types.
A Ripple Effect on the Electronics Industry
The repercussions of rising memory prices extend throughout the entire electronics industry. Rising prices will inevitably impact consumer electronics, including smartphones, computers, and automobiles. Predictions suggest that consumer-grade high-end graphics cards could see price hikes between 20%-30%. Additionally, Nvidia and AMD are contemplating the suspension of mid-to-low-end GPU production due to the burgeoning costs of components.
In smartphones, memory costs have ballooned from 10%-15% of overall expenses to between 18%-25%. Consequently, manufacturers will be forced to adjust their pricing structures, impacting everything from low-end models to premium devices.
PC manufacturers, such as Asus, report that they can only maintain memory inventory for a mere two months. This imposed limitation threatens supply chains, with potential shortages anticipated by 2026. The automotive sector is similarly affected—storage costs for L3 autonomous driving systems have increased from 15% to 25%, prompting OEMs to reconfigure and revise their pricing strategies.
Outlook for the Future
This wave of price increases is likely to persist, with a reprieve not expected until production capacities are gradually expanded after 2027. Therefore, consumers can anticipate ongoing fluctuations in the prices of various electronic products in the interim.
As the landscape of memory technology evolves, the stakes grow ever higher. Memory components, once considered peripheral, are now at the forefront of technological and financial innovation, inviting scrutiny and strategic adjustments across all sectors.
