Memory Price Hikes Are Inbound And Could Drive Up The Cost Of Graphics Cards

GeForce RTX graphics card installed in a PC.
At the risk of sounding like an alarmist, there are developments happening within the memory supply chain that are expected to introduce price hikes on a variety of DRAM products, including chips used in high-end graphics cards. Depending on how the situation plays out, the price hikes could affected future graphics card releases, such as NVIDIA's GeForce RTX 50 series and AMD's Radeon RX 8000 series.

That's getting a little ahead of ourselves, though, and time will tell how it all ultimately shakes out. In the meantime, the analysts at TrendForce issued a new report highlighting higher memory prices continuing into the third quarter of this year, partially resulting from heightened demand for servers.

"TrendForce reports that a recovery in demand for general servers—coupled with an increased production share of HBM by DRAM suppliers—has led suppliers to maintain their stance on hiking prices. As a result, the ASP of DRAM in the third quarter is expected to continue rising, with an anticipated increase of 8–13%," the market research firm states.

Chart of memory pricing trends.

Likewise, it's expected that pricing on conventional DRAM will shoot up 5-10% in the same time period, though this will vary by segment. As can be seen in the chart above, the biggest price hikes are headed toward DDR5 (8-13%) and DDR4 (5-10%) for servers, while consumer-based DDR5 and DDR4 will see 3-8% higher pricing.

As it applies to graphics cards, the demand for VRAM is flat at the moment, but that will spike when AMD, NVIDIA, and to an extent Intel begin rolling out next-generation GPUs.

"With manufacturers firmly entering an upward pricing cycle and the price increase momentum not yet abating, buyers are adopting a continuous stocking strategy, making them more amenable to price hikes proposed by sellers. On the supply side, as new GPUs enter the verification stage, manufacturers are gradually increasing the production of GDDR7, which currently carries a 20–30% premium over GDDR6," the report states.

It's also stated that the GDDR7 samples in the third quarter will push up the average selling price of VRAM, and as such, VRAM prices "are expected to increase by 3-8% QoQ." It's reasonable to expect that those costs will be passed on to the consumer.

Another possibility is that rising prices could affect the VRAM allotment on certain SKUs. Gamers have criticized NVIDIA in the past for seemingly skimping on VRAM, which AMD tried to capitalize on by coyly dissing its competitor.

Fortunately, the predicted price hikes look rather tame overall, so hopefully this all ends up being much ado about nothing. Stay tuned.