Koreans call the West beggars. There is logic in this
The situation on the memory market is starting to look like a repeat of the worst times for graphics cards during the cryptocurrency craze, only this time the fuel is artificial intelligence. There has been a real race for DRAM chips since the second half of last year, and the industry expects the availability problem to persist at least until the end of this year. In practice, this means one thing – prices are rising and there is no sign of stabilization.
Soon, the profit from DDR5 production may exceed HBM
The birds are chirping that Samsung and SK hynix – two of the three largest DRAM suppliers in the world – are to demand memory price increases of 50-60% compared to the previous quarter in negotiations for the first quarter of 2026. Importantly, the climate around purchases is expected to be extremely tense: companies prefer to secure inventories even at a higher rate, because in the background there are concerns that “it will be even more expensive soon”.
What’s interesting is how directly large companies are trying to steal the available volumes today. Representatives of big tech from the USA and Europe responsible for purchases are said to appear in the vicinity of Pangyo and Pyeongtaek, places strongly associated with the Korean semiconductor industry, hunting for the last available batches. In the industry jargon, they even got a nickname “D램거지” (DRAM beggars).
Unfortunately, this is not a simple panic and the numbers do not lie. For example, in January last year, DDR4 8 GB wholesale cost about $1.4, while in December it was already $9.3. For the newer and faster DDR5 standard, it looks even worse. This is an unprecedented situation.
At such rates, the profitability of consumer memory may look absurdly good – market comments include a thesis that margins on some standard modules may reach 70%, and profits may even exceed what was until recently associated with the most profitable segment, i.e. HBM3E for AI accelerators. HBM is of course still more expensive, but much more difficult and expensive to produce.
