RAM Makers Plan to Cut Production Even Further

AlphaAtlas

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While desktop DDR4 memory seems to come from a countless number of brands, including Crucial, Corsair, G.Skill, Kingston, and many others, only a handful of manufacturers actually make the chips that go into those sticks. Micron, SK Hynix, and Samsung are the big 3 that really influence memory prices, as they've gradually absorbed most of the smaller chipmakers, and according to TrendForce's latest report, they're cutting production back even more than expected in 2019. Following the Intel CPU shortage and generally weak market demand, the manufacturers allegedly want to stop prices from dropping to keep profit margins high. However, Trendforce still expects memory prices to drop about 15% in Q1 2019, "less than 10%" in H2 2019, and around 5% after that.

In the oligopolistic market with no new competitors, manufacturers have tried to adjust their production plans and cut down capex to avoid price competition. In terms of profitability, the gross margins of Samsung’s and SK Hynix’s DRAM production remain nearly 80%, while that of Micron remains over 60%. With such high margins, it is reasonable for the manufacturers to be conservative in their production outlook for 2019.
 

jlbenedict

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Fine by me.... I'll stay on my AM3+ platform a little longer. No reason to upgrade
 

Glock24

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The only DDR4 rig I owned was a Skylake ITX build, from a time you could buy a decent kit of 16GB of DDR4-2400 for $75.
As RAM prices are still insane, I've dedicated myself to build systems from old parts I got laying around and used ones from eBay. DDR3 prices are ridiculously low, I got 16GB 1866 RDIMMs for $40 a pop, so now I have my test server with 128GB and an extra system with 64GB and a Xeon E5-2680v2 ($160) as my "other" desktop.

I sold the Skylake rig and my daily driver is now a Z97N-WiFi with E3-1275Lv3 and 16GB DDR3-1866 RAM.

I've been wanting to get a Ryzen system, but won't until DDR4 prices come back to early 2016 levels.
 

Armenius

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Hmm...
Sounds an awful lot like the oil industry.

AMD and Intel should get on their case since their industries are intertwined. I want to upgrade my PC with a new CPU, but I'm not doing it while memory prices continue as they are.
 

AlphaAtlas

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Hmm...
Sounds an awful lot like the oil industry.

AMD and Intel should get on their case since their industries are intertwined. I want to upgrade my PC with a new CPU, but I'm not doing it while memory prices continue as they are.
Unless they start sharing their x86 license/patents, AMD and Intel don't really have any legs to stand on.
 

Mav451

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I've had my DDR4 kit for years b/c I anticipated this...but then I found no reason to upgrade so lol me :p
 

Glock24

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Forgot to mention, DDR3 ECC UDIMMs work in consumer boards, at least it has in every one I've tested (many Gigabyte, Zotac and AsRock in mATX or ITX form factor). ECC RAM is cheaper than non-ECC RAM, so you can upgrade RAM for cheap.

Of course, you won't get any ECC functionality.
 

deton8

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OK so the message is, don't wait any later than 2H 2019 to buy or prices will start rising again?

Hopefully AMD gets their ducks in a row and there will be X570 boards or at least specs by then.
 

DukenukemX

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This is the reason why the Playstation 5 is going to have a sad amount of memory. Somewhere between 12GB to 16GB is a sad increase over the PS4 8GB. PS2 had 32MB of ram, then the PS3 had 512MB and now the PS4 has 8GB. The console market has held back PC gaming so much that the next generation consoles are going to have a minor speed increase. Over the PS4 and Xbox One it might be a decent increase upgrade but probably not over the PS4 Pro and Xbox One X. The mid range gaming PC market is stuck at GTX 970/980 levels of performance for the price of $250. From the sounds of leaked info for GTX 2060 $350 pricing, it doesn't sound like this will get any better. Unless AMD pulls out a Vega 64 for $250, the gaming market will not evolve. But we need game developers to stop focusing on consoles otherwise there's no need to upgrade PC graphics when the lowest common denominator (the consoles) keep holding back graphics.

Memory prices are the result of a lack of demand as well as GPU graphics. Nobody needs more than 8GB for gaming.
 

U-238

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Well shit son, when you're making 60-80% gross on product why the hell wouldn't you try to keep it that way? Memory is (A) used in damn near everything from PCs/Laptops to all the "Smart™" devices running around and (B) a market you can't just waltz into because, as with a lot of things manufacturing, there's a significant capex at startup and you probably won't see returns on that until a ways into the future.

As for the hootin' and hollerin' over this being illegal: Unless there's verifiable evidence that all three are colluding to fix prices (which, if you read the article that doesn't appear to be the case) you can't go after companies for playing "follow the leader". Yea, from a consumer aspect this would seem to be pretty shady but think of it this way: If you, Jim and Bob are selling bottle caps in your town and Jim and Bob are selling for 2.00 a piece and making lots of money while you're only selling for 1.00 a piece making barely any are you going to hope that you can outsell Jim and Bob and cause everybody to race to the bottom where nobody makes any money or, are you going to raise your price to 2.00 and you, Jim and Bob can all make good money and everyone's happy?
 

Shikami

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Purchased 16GB 2133 for the 6700k for $74. If I can get around $100 for Zen 2 then I will content. I have not built anything due to the abhorrent prices-and will not till they come down. This time I may take in the price fix law suit money..........usually I'm like $5, bah. This time I will be like ahahhahahahahhahahahahahahhha, MY $5 with a Better Off Dead likeness!!!!
 

Seventyfive

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Anyone complaining about how evil these guys are, feel free to go buy MU stock. It's only trading at 4.5x 2019 earnings and they're going to buy back 20% of the company using $10B of free cash flow. With the amount of money you make on the stock, you could buy a whole new rig, not just 4 sticks of DRAM.
 

DejaWiz

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Anyone complaining about how evil these guys are, feel free to go buy MU stock. It's only trading at 4.5x 2019 earnings and they're going to buy back 20% of the company using $10B of free cash flow. With the amount of money you make on the stock, you could buy a whole new rig, not just 4 sticks of DRAM.
No thanks....with how volatile the DRAM segment has been with all the investigations, "disasters", and foreign IP theft, I think it wise to steer very clear of such stock right now.
 

Seventyfive

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No thanks....with how volatile the DRAM segment has been with all the investigations, "disasters", and foreign IP theft, I think it wise to steer very clear of such stock right now.
Considering they are net cash and having massive free cash flow, even with lower pricing, combined with a massive share buyback program, I think I'm going to be pretty safe. Cyclical companies usually trade at peak multiples combined with trough earnings or trough multiples combined with peak earnings. Micron is trading trough multiple with near trough earnings.

Also, David Tepper, who is so successful he bought an NFL team... basically joked that he would sell his entire portfolio and just buy Micron.

 
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Oh those motherfuckers
First they are creaming everyone on prices, now when prices are possibly returning to somewhat normal, they think its ok to artificially keep the prices high
I thought this kinda tactic wasn't allowed?
60-80% profit margin......yeah see this is the kind of thing that I hate about Capitalism artificial price escalation for the sake of greed, I don't mind if some of it goes to furthering future r&d but come on.....
 

Seventyfive

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60-80% profit margin......yeah see this is the kind of thing that I hate about Capitalism artificial price escalation for the sake of greed, I don't mind if some of it goes to furthering future r&d but come on.....
The other part of capitalism, which I posted above, is you can invest in Micron. Nobody is stopping you. So if these evil greedy guys really are making so much money, why not just own the stock and now you will be making so much money.
 

Susquehannock

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Because they are ramping up (prices) for the big DDR5 rollout :LOL:
Forgot to mention, DDR3 ECC UDIMMs work in consumer boards, at least it has in every one I've tested (many Gigabyte, Zotac and AsRock in mATX or ITX form factor). ECC RAM is cheaper than non-ECC RAM, so you can upgrade RAM for cheap.

Of course, you won't get any ECC functionality.
From what I have seen the gap in price is pretty small. DDR3 RDIMMs is where it really drops. Need server grade board for registered RAM of course. New 8gb modules are around $20-$22 now. Just got factory refurb low latency 8gb Samsung modules at $12 each.
Isn't ECC also a lot slower then consumer ram?
The performance hit is too often over-stated, and not even realized in most real world scenarios, if at all. Not too many non-ECC vs UDIMM vs RDIMM comparisons like this but there are a few.
 
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gamerk2

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Oh those motherfuckers
First they are creaming everyone on prices, now when prices are possibly returning to somewhat normal, they think its ok to artificially keep the prices high
I thought this kinda tactic wasn't allowed?
*Only* if they coordinate with eachother on it. Take our airline industry, which does basically the same thing. But as long as they don't coordinate, there really isn't much that can be legally done under current anti-trust laws.
 

Glock24

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Isn't ECC also a lot slower then consumer ram?
Yes and no. ECC RAM usually does not have ultra-low timings as performance oriented modules have, but the timings agre comparable to mainstream RAM modules.
My experience had been that you can use lower timings in ECC modules than what the SPD advertises.
 

Spidey329

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Oh those motherfuckers
First they are creaming everyone on prices, now when prices are possibly returning to somewhat normal, they think its ok to artificially keep the prices high
I thought this kinda tactic wasn't allowed?
It's not if they collude / create a cartel. It's why they're being looked into in a few countries.

Because these big 3 control most of the supply and buy out any small competitors (that might sacrifice margin for marketshare), they can essentially fix the price without even talking to each other, just by mirroring. Unless one of them goes rogue, they'll keep doing it. They have no incentive not to if all 3 of them are operating at or near capacity.
 
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