South Korean media: The value of chips has skyrocketed ... A computer that originally cost 1 million won now costs 1.7 million won

¬ Prices of DRAM are surging in the AI era

"DRAM prices have gone up like gold prices. So who would want to buy a personal computer now?"

On the 14th, at the Saneum Business Street on Han River Road in Yeongdeungpo-gu, Seoul. Kim (30 years old), who was alone guarding the store, kept looking at the quiet corridor. The studio across from the store was empty. That was where computers ordered online were assembled and packaged. Kim said, "There weren't many computers sold during the end-of-year and New Year holidays. We've been closed for more than a month."

The price of DRAM, a core component of PCs, has surged six times in four months, leading to this situation. As artificial intelligence (AI) develops, the surge in demand for DRAM has begun to affect the general economy, with the PC market being hit first. Last September, the price of Samsung Electronics' 16GB (GB) DDR5 memory module was about 70,000 KRW (about 330 CNY), while as of the 19th, it had risen to 410,000-440,000 KRW (about 1,931-2,072 CNY). Kim said, "The price of the DRAM alone in a gaming PC with 32GB of memory has increased from 140,000 KRW (about 659 CNY) to 840,000 KRW (about 3,956 CNY). The price of an entry-level gaming PC that originally cost around 1 million KRW (about 4,710 CNY) has suddenly risen to 1.7 million KRW (about 8,007 CNY), so demand has sharply declined."

The rising prices of DRAM have made it difficult to sell computers, and companies have struggled to come up with solutions, launching products with reduced memory capacity to 16GB, but this has not helped much. Prices of other computer components containing DRAM, such as graphics cards and high-performance SSDs, have also risen, causing computer prices to continue to soar. Kim said, "Customers with limited funds, such as teenagers and young men, have largely given up buying, creating an atmosphere of 'wait for the price to drop before buying'."

The notebook computer market is also experiencing a shortage. Due to the rising price of DRAM, product profits have declined, and the supply of mid-to-low-priced, high-value notebooks below 1 million KRW has significantly decreased, with even some products with large inventories disappearing during the distribution process. Industry insiders said, "This is due to the dual factors of consumer demand to purchase before prices rise and some distribution companies wanting to sell existing inventory at a higher price based on the increased DRAM prices for the new semester." Prices of mid-to-high-end products above 1 million KRW have also risen sharply. The main AI notebook computer products from Samsung and LG Electronics were priced around 1.4 million KRW (about 6,594 CNY) in November last year, but now they have risen to around 1.7 million KRW.

This is not just a problem in South Korea. U.S. IT specialized media Tom's Hardware revealed that assembly computer stores in Los Angeles and New York have started to set prices "in real time" based on daily memory prices. The average price of computers in Berlin, Germany, and Paris, France, has increased by about 20%-30% compared to the end of last year. French IT specialized media Les Nureriques said, "In particular, the sales of low-cost desktop computers and educational computers have dropped sharply due to insufficient supply by manufacturers."

In Japan, "downgraded" PC products based on the previous generation DRAM DDR4 CPUs (central processing units) and graphics cards are also being sold. Kawasaki, a store operator in Akihabara, said, "Previously, we just needed to wait for memory prices to drop, but this time, due to the structural factor of AI demand, we don't know when it will stabilize, so we can only cope this way."

The trend of rising DRAM prices is expected to continue. Market research companies such as TrendForce and DRAMeXchange predict that the price of DRAM for PCs in the first quarter of this year will increase by 55%-60% compared to the previous quarter. Some investment banks are preparing reports stating, "Although the current impact is only on PC prices, if prices continue to soar, it may also affect overall inflation."

At present, the price of smartphones, which are essential for daily life, is likely to rise. The price of memory such as DRAM in smartphones accounts for about 10%-15% of the component cost. Market research firm Counterpoint estimates that "the cost ratio of memory components may surge from the original 10% to over 20%." This means that not only will the prices of new models launched this year rise, but the prices of basic models already on sale may also be adjusted. U.S. IT media TechArt said, "Rising DRAM prices may lead to increased costs and prices for major cloud service providers such as Amazon and Microsoft, triggering infrastructure cost increases across various fields of the digital society."

¬ DRAM · SSD · Graphics Card

DRAM: It is a type of memory that can quickly store and retrieve applications (APPs) and data running on devices such as computers, smartphones, and servers. All stored content disappears after power is turned off.

SSD (Solid State Drive): A high-capacity storage device that uses "flash" technology to retain data even when power is disconnected. It has replaced hard disk drives (HDDs) and is used to store operating systems, applications, documents, and videos.

Graphics Card: A component of a computer that generates images to be displayed on the screen, such as games and videos, and sends them to the monitor. It is equipped with high-speed DRAM to quickly process video and image data.

Source: Chosun Ilbo

Original article: toutiao.com/article/1854887058152712/

Statement: This article represents the views of the author himself.