Why Do RAM Prices Go Up And Down?

If you’re a computer tech, or you’re building your own PC, then you pretty frequently have to buy memory. You’ve probably also noticed that the prices seem to go up and down as crazily as the real estate market.

In the last year or so, we’ve seen the price of RAM nearly double. But, why?

Well, first, you have to understand what goes into making RAM in the first place. Here’s a video form the guys at GamersNexus where they’ve had a guy from Kingston show how they make RAM:

[youtube https://www.youtube.com/watch?v=3s7KG6QwUeQ?rel=0]

As you can see, the process isn’t exactly simple. There’s quite a bit that goes into making RAM.

But, then, as the old saying goes… sh*t happens.

The countries that produce components have bad things happen to them. This affects supply and, in turn, pricing. Case in point, a factory owned by SK Hynix caught on fire and sent RAM prices up by over 40% in about 2 weeks. And, the way the supply line is set up for many PC components, there are only a few main manufacturers involved. When something happens to one of them, the ripples are felt widely.

Then, there’s the classic law of supply and demand.

When supply goes down, price goes up. That’s just the way things work.

Also, changes in technology can have impacts on demand. For instance, the changes from DDR2 to DDR3 (and soon the change to DDR4) have a direct impact on the technology being left behind. As memory manufacturers switched to DDR3, the price of DDR2 shot up because all of a sudden there was less of it to go around. And, as you can see, there’s a lot involved in making it to begin with, so there’s high startup costs and you don’t see a lot of new companies coming into the fold to make it.

Over the last several years, we’ve seen the increase of cloud computing, tablets and smartphones. All of this places new demands on RAM manufacturers. And, with more demand, comes higher prices.

In the end, though… RAM prices have gone up, but I really don’t think it should make much of a difference to the average PC builder. RAM is still WAY cheaper than it was in the early days. You can still get 8GB of RAM for anywhere from $60-$90, and a full 16GB for the $160 range. In the scheme of things, that’s a pretty good price.