The majority of PC enthusiasts are likely well aware of how rapidly hardware component costs have increased in recent years. In addition to the sky high prices of graphics cards due to mining, the costs of several in-demand CPUs and RAM modules have also increased to unfair levels.
RAM stands for random access memory, and it’s the primary module in a PC, laptop, or smartphone, where all the data and application programs are stored. It’s an integral part of any computer, which determines its speed, and it allows your computer to smoothly carry out many of its daily tasks like opening apps, using the internet, editing spreadsheets, and playing games. And if you’re editing videos, you’ll need a high-capacity RAM stick like DDR3 or DDR4 to render frames at a respectable rate.
So, why is ram so expensive? Well, nearly 98% of the world’s demand for RAM is manufactured and supplied by only three companies: Micron (Crucial), Samsung, and Hynix. With this scarcity of production and lack of competition, it should come as no surprise as to why the price of ram is going up.
Why Is a Ram So Expensive?
“From the monopoly of manufacturers to the requirement of specialized machinery, the materials needed to make RAM are highly sophisticated, which drives up the cost of RAM.“
However, there are quite a few other reasons that determine the price of a RAM module.
Supply and Demand
Supply and demand plays a very significant role on the price of PC components. Like with everything else, the COVID-19 pandemic interfered in the production of computer parts. As a result, there has been a lack of availability of RAM sticks in the market, and prices skyrocketed.
Not to mention, due to the lack of competition, the relatively few RAM-manufacturing companies hold a monopoly over the whole RAM industry and are thus able to control the RAM supply and set their own prices.
RAM modules are produced with expensive and sophisticated technologies. And because impurities within silicon can cause defects, the environment has to be kept extraordinarily clean. Not to mention the use of highly complex machinery, and programming of these machines automatically requires great engineering expertise. So, consequently, fabricating these chips is expensive.
Memory must be mounted on to a PCB (Printed Circuit Board) before it is shipped. That PCB is also made in a very clean atmosphere by skilled engineers, and then the completed product gets tested for quality assurance.
The reason why RAM is so expensive is because each machine in this complex production system can cost anywhere between a few hundred thousand to a few million dollars. Thus, manufacturing RAM is a very expensive and challenging procedure with really high cost of production.
Moreover, using cutting-edge tools, you’ll need to put several chips on a 3D-printed circuit board. That is why manufacturers maintain the high prices of RAMs like DDR4 and DDR3 kits in order to offset the expense and make a profit.
Sudden Shift to DDR4
It seems like high-performing RAMs are not exclusive to PC users anymore as smartphone companies have also started to use DDR4 memory. As a result, there has been a sudden shift in demand for DDR4 from DDR3, which has produced high demand.
The debut of Google Pixel and other Chinese hardware manufacturers now operating in the US technology market have all contributed to a rise in the demand for DDR4 memory, which has resulted in high RAM costs. The most recent generation of smartphones also uses this type of memory. So, brands are motivated to produce more DDR4 RAM sticks. Hence, more supply of RAM should mean a decline in the price, right? Well, that’s not the case at all.
Due to the fact that major smartphone manufacturers like Samsung and Apple are ready to pay high rates for an assured supply of RAM, manufacturers are also motivated to increase their prices. RAM manufacturers are not going to sell their products to anyone at a cheap rate as these companies are already paying them the big bucks.
Chip Shortage and Compact Design
The recent chip shortage has affected the prices of all PC components. Since RAM already tends to be pretty expensive, this shortage of chips will take this inflated price even further than before. RAM production, along with the production of other computer and smartphone components, will be impacted as long as there is a chip shortage.
A RAM module with a large memory must be compact in order to fit into a computer, laptop, or smartphone. It is difficult to achieve such a tight, compact design, and experts must carefully examine several technical aspects that contribute to the reduced space. As electronic components are becoming smaller, its costs are increasing at an exponential rate as well.
B2B Business Model
RAM manufacturers don’t sell their products to regular customers, rather, they follow the B2B model for their business. They cater their services towards big companies as they’re often ready to pay large sums of money to get their hands on the best RAM kit.
The B2B model indirectly contributes to the high price as the market is limited. If RAM was widely accessible to the average consumer, the cost would not be as expensive since manufacturers would enjoy economies of scale.
How Much RAM Does Your System Need?
The amount of RAM you need mostly depends on the kind of programs you would be running on your system. 4GB of RAM is enough for a majority of computing tasks, however, 8GB is recommended if you wish to run several apps simultaneously without causing your system to lag.
A minimum of 8GB RAM is needed if you want to edit images or videos since editing makes the computer work much more harder. In terms of editing 4K films, you should have at least 16 GB of RAM to get the best performance.
Similarly, for playing VR games, you need to have at least 16 GB of RAM, and if you want to play in high graphical fidelity, you should have at least 32 GB of RAM.
These are some of the top reasons, why ram is so expensive. However, the question remains, will these high prices of ram last forever? Well, following Russia’s invasion of Ukraine, experts anticipate price reductions for DRAM modules in a number of technological market segments during the second quarter of 2022. But only time will tell what the cost of RAM will be like in the upcoming years.