Memory Companies Have Destroyed the Consumer Market
3 hours ago
- Memory manufacturers (Micron, Samsung, SK Hynix) are using long-term agreements (LTAs) to suppress cyclical pricing, leading to sustained high prices for consumers.
- Prices of RAM and SSDs have dramatically increased: e.g., 2TB NVMe SSDs up 137%, 32GB DDR5 kits up 363%, and 128GB DDR5 is now $6,800.
- Amazon and cloud providers benefit as businesses forced into cloud due to high on-premises hardware costs; AWS revenue grew 36.7% YoY.
- Chinese manufacturers CXMT and YMTC are gaining market share (CXMT now 10% DRAM market) but face US government restrictions.
- Forecasts suggest NAND flash may see price relief by 2027, but DRAM shortages will worsen due to HBM and server demand.
- LTAs allocate 50-70% of output to top 5-16 customers for 3-5 years, reducing flexibility for consumer goods and locking in high prices.
- The shift fundamentally alters the memory market, likely eliminating future price low points for consumers.