NVIDIA is seen as set to trigger a transformation sweeping the consumer electronics market, with its transition to LPDDR memory modules disrupting the supply chain of the consumer electronics industry.

Counterpoint Research, an industry analysis institution, released a report on Wednesday (November 19) stating that increased demand for LPDDR from NVIDIA could potentially double memory prices over the next two years.

LPDDR refers to "Low Power Double Data Rate Synchronous Dynamic Random-Access Memory" and has been widely used in devices such as smartphones, laptops, and cars. LPDDR can also provide better power efficiency per watt for AI inference and large language models in cloud data centers, and supports larger architectural design flexibility to meet the needs of the next generation of data centers.

The report from the institution stated that in order to reduce the power consumption of AI servers, NVIDIA recently decided to switch the memory used in servers from DDR5 (the fifth generation of Double Data Rate Synchronous Dynamic Random-Access Memory), which is usually used in servers, to LPDDR5X — the same type of memory used in many flagship phones.

Counterpoint said that since the number of memory chips required per AI server is far higher than in a phone, this change by NVIDIA is expected to create an unexpected surge in demand that the industry is currently unable to cope with.

Research director MS Hwang wrote, "NVIDIA's recent shift to LPDDR means it has become a client on the scale of a major smartphone manufacturer — a significant shift for the supply chain, which cannot easily absorb such a massive demand."

Previously, memory suppliers such as Samsung Electronics, SK Hynix, and Micron had reduced the production of older DRAM products by focusing their capacity on High Bandwidth Memory (HBM) needed for generative AI chips, leading to shortages of these products.

Counterpoint said there is a risk that the tightness in the low-end market may spread upwards, as chip manufacturers may have to weigh whether to shift more capacity to LPDDR to meet NVIDIA's demand.

The report stated, "The greater risk lies in the high-end memory market. As NVIDIA shifts to LPDDR, they have become clients comparable to major smartphone brands — a demand 'earthquake' that the supply chain will find difficult to withstand."

Counterpoint also expects that the price of server memory chips — the price of DDR5 64GB RDIMM DRAM modules — will double between the first quarter of 2025 and the end of 2026.

"The memory market is not expected to recover in the short term. High demand for artificial intelligence will lead to memory demand continuing to exceed supply in the foreseeable future. High memory prices are unfavorable for consumers and gamers. All of this stems from the pursuit of profit in the field of artificial intelligence," foreign media analyzed.

Original: https://www.toutiao.com/article/7574618607058010667/

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