The price of DRAM continues to rise, and it’s prolonging the GPU shortage

Research outlet TrendForce projects that DRAM prices will continue to rise throughout 2021, further compounding the lack of GPUs and consoles in the market over the past several months. Trendforce hopes Q3 2021 to see a 13% price increase, which is a drop from Q2 — with projections of growth up to 25% — but higher growth from Q1, which saw growth of up to 10%.

The availability of DRAM is a big reason why GPUs are lacking right now. The latest graphics cards and GDDR6 and GDDR6X modules inside consoles are in high demand, and suppliers haven’t been able to meet that demand. Tradeforce cited Nvidia as a constraining factor, saying “DRAM suppliers prioritize capacity allocation to Nvidia as opposed to smaller customers.”

The Xbox Series X and PlayStation 5 are also under a huge pressure on the DRAM market. Both consoles use 16GB GDDR6 chips, not the dual 8GB GDDR6 chips. So, the 8GB chips common in the graphics card market are not common in the console market, and as Trendforce points out, “the two chips are irreplaceable.”

All this demand has driven up DRAM prices through 2021, and that won’t change anytime soon. TrendForce forecasts an 8% to 13% increase in prices in the contract market through Q3. This will make graphics cards and consoles more expensive to manufacture, but that doesn’t mean these products will be more expensive on the shelves. For Xbox and PlayStation in particular, you can still expect to pay their $500 price tag.

Graphics cards are a different story. As shown in previous releases and over the past several months, GPUs are traded like a commodity. The suggested price doesn’t mean much, as retailers and third party sellers are willing and able to sell cards above their recommended price. News of a rise in DRAM prices could mean less supply or higher prices, but regardless, it looks like the GPU shortage won’t be fixed anytime soon.

Outside of demand, new graphics cards and new consoles, Trendforce identified an increase in demand for server DRAM which also contributed to the decrease. Although the projection is bad news for GPU buyers as expected, it’s important to remember that DRAM demand is only one aspect of GPU shortages.

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