When Kingston arrived at the shop, everyone who had installed the computer turned to look at him. Some even started crying, "Kingston, you've raised the price again!" He didn’t respond and simply said, "I’ll go for a 7900X." Then he added, "Ten 8GB DDR4 2400 memory modules." The crowd shouted back, "This time, your head will be on the line!" Kingston opened his eyes wide and replied, "How could you be so dirty?" "What’s innocence? I saw you raise 8GB memory to 900 yesterday!" Kingston blushed, his forehead veins bulging as he argued, "Prices can't be seen as people... prices! It's a market behavior—can it be seen as human?" These words were hard to understand, but the audience laughed anyway. The store was filled with a joyful atmosphere.
Xiao Bian came across a funny joke today and wanted to share it. Coincidentally, today’s topic also originated from it. The real issue behind the memory price hike isn’t actually the memory manufacturers.
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**Chip manufacturers are in control**
First of all, the real producers of memory chips are mainly Samsung, Micron, and Hynix. Although they also sell branded memory products, they make more profit by selling the chips themselves. Together, these three companies hold nearly 95% of the market share. Any problem in any of these companies—whether it's a disaster, a production accident, or a strategic change—can cause fluctuations in the chip market, which ultimately affects memory prices. After all, memory chips are the most important part of a computer.
The main reason behind the recent price surge is the low yield in the 3D NAND process and strong demand for mobile phone supply, which couldn’t meet the capacity. This coincided with the cyclical downturn in the storage park supply. A combination of factors led to this wave of price increases, and in essence, it has nothing to do with the memory vendors.
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**Memory manufacturers aren’t making money**
Who are the memory vendors? For example, Kingston is one of the leading brands. They are memory manufacturers, not chip manufacturers. As a memory manufacturer, this price increase has been very tough.
Many people think that memory vendors are also profiting from this situation. But the reality is different. Memory manufacturers have to buy chips, design PCBs, build peripheral circuits, conduct testing, handle logistics, ensure quality, and promote their products. By the time the product reaches the user, the profit per memory module is generally no more than about 10 yuan.
And the worst part is, when there’s a shortage, memory manufacturers are terrified—nothing to sell. What good are rising prices then?
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By the way, Xiao Bian would like to explain why major memory manufacturers offer lifetime warranties:
First, they have large and stable import volumes, and solid relationships with chip manufacturers, ensuring high-quality chips.
Second, they maintain strict quality control throughout the production process, resulting in high yields and fewer issues.
Third, they ship huge volumes. With sufficient quality assurance, they can afford a small breakage rate. Small factories can’t do that.
Fourth, they have clear distribution channels and a strong after-sales system, protecting users from counterfeit products.
Finally, some manufacturers, like Kingston, use their own wafer-cutting methods. They purchase chips directly from chip manufacturers and then cut and produce them. Memory modules with Kingston’s logo are made this way, controlling quality from the source. It must be said that the world’s largest memory maker isn’t just a name.
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**Cycles may bring price drops soon!**
Recently, there has been some relaxation in the memory market. In particular, Samsung and others announced plans to expand their chip production capacity. While they gave many reasons, the most important one was to deal with new players entering the market in 2019—domestic memory chip manufacturers.
It’s reported that domestic memory chips were in trial production in 2018 and are expected to officially hit the market in 2019. This is a big step forward. Not only does it boost national pride, but it also means memory chips won’t be controlled by a few companies anymore. This development is crucial. If successful, the rise and fall of memory chips won’t be dictated by a handful of manufacturers, and increased production capacity is great news for memory manufacturers.
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Xiao Bian personally experienced the fiercest memory price hikes in the late 90s, when 128MB SDRAM jumped from 110 yuan to nearly 1,300 yuan in a flash—ten times the spread, which no one could have imagined. With the current changes in the market, I believe there won’t be another “shock.†And with the domestic players about to enter the scene, a memory price drop is no longer a dream.
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