Home / Component / DRAM and NAND supply shortage expected to last until 2018

DRAM and NAND supply shortage expected to last until 2018

Over the course of this year, we have been consistently hearing reports surrounding DRAM and NAND shortages, causing a strain on supply and ultimately, pricing. When these shortages first crept up in late 2016, it was thought that everything would go back to normal in the second half of this year. Unfortunately, that no longer seems to be the case, with DRAM and NAND shortages now expected to see us through to 2018.

According to an analyst report over on Reuters, the growing demand for NAND and memory across the mobile and PC market is forcing some vendors to pay a significant premium in an effort to secure longer-term contracts for supply. One particular chip supplier admitted that recently, more than a few clients have moved to six-month supply agreements, taking the hit due to the financial premium in an effort to get enough chips for products. Typically, these companies would get by on quarterly or monthly deals.

Right now, it is believed that Apple buys around 18 percent of the world’s annual supply of NAND chips in the build-up to the next iPhone launch. Typically, companies would tackle this by building up extra inventory during the first half of the year. However, this chip shortage has been going on since late 2016, nobody has been able to build up much inventory at all. With the next iPhone set to hit in September, the squeeze on NAND supply could hit even harder.

Samsung unfortunately did not offer a comment on the report but we know that earlier this year, the company had to delay its 4TB SSD launch due to supply shortages. SK Hynix did offer a statement, telling Reuters that while the company has been meeting delivery dates so far, supply conditions are tight and inventory levels are at an all-time low. Things may pick up again in 2018 though, with Samsung and SK Hynix expected to begin production at additional factories.

KitGuru Says: The rise of high-end smartphones means DRAM and NAND supplies are tighter than ever. Some Android devices now even go as far as to offer six to eight gigabytes of RAM. Storage demands in smartphones have also risen, with many only offering 32GB models and up. Hopefully things can get back on track next year. Have any of you guys noticed a shift in SSD or RAM pricing this year? 

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  • chris

    This is what underinvestment gets you

  • Misha Engel

    Higher prices and lower cost.

    Profit

  • Rocky40

    Yep the shortage was self create because they put the resources else where which in turn raises the prices so they still make a profit seems a bit under handed.

  • Patrick Proctor

    How is it underhanded? Everyone’s converting all of their foundry space from planar NAND to 3D NAND. That equipment takes a lot of time to install, bring online, and tune.

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  • Rocky40

    I am talking about the DRAM shortages as well DRAM prices have tripled in the last 6-7 months because they lowered output of DRAM so they could capitalize on the mobile memory chips. This caused Desktop DRAM to go up in price because of it. So the shortages were caused by the memory companies themselves so at the end of the day it is us the consumer that have to put up with jacked up DRAM prices.

  • Jortiz3

    Complainers – nobody is stopping you from setting up shop and producing your own DRAM. The conspiracy theories are getting old, and fail in the face of simple economics. We have a diverse, competitive market for DRAM. This is the real free market at work, responding to changes in technology and needs of end-users.

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  • Patrick Proctor

    And that surprises you why? With the new Skylake Xeon line, Ryzen, Threadripper, Epyc, Kaby Lake, etc., the demand for memory’s more than doubled in just 4 months.

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  • Rocky40

    Yep that is true but what I said is 100% true as well they just said on Gamer Nexus that expect the Dram shortage to get even worse with the soon to be released iPhone 8 in the fall. Like I said with the companies placing almost all of their focus on the mobile sector now days for memory chips because the phones are getting 4GB-6GB memory installed we in the PC end up paying higher prices because of supply and demand as in the demand out paces what is being supplied for our PC market. Same thing I said here in first comment just put a different way.

  • Rem ko

    You fell down the stupid tree and hit every branch on the way down? One does not simply “set up shop” and produce DRAM.

  • Jortiz3

    Yeah, I’m dumb. Great point. The real point is DRAM is a competitive landscape with numerous companies in fierce competition (Micron, Kingston, SK Hynix, Toshiba, Elpida, Nanya, Winbound,…..), which makes the “conspiracy”-based explanations of the DRAM shortage really unlikely.

  • Jose Carlos Gadea

    What? more profits for the same ammount of product? Without investing more? It seems like a win-win for them, really…

  • jt AJ

    LMAO

  • Dromo

    THEY ONLY GET SO MANY Slices of silicon , so they can treat and burn its as mobile dram or sodimm or ddr4 .. they choose whichever is most profitable atm that is apple dram everyone else has to fight over the scrapings , someone should produce a coffelake mobo that uses ddr3, for me and others ASROCK?