Graphics Cards may get more expensive in the coming year as prices for graphics DRAM may rise with the primary reason being DRAM shortages according to a report by DRAMeXchange.
DRAM is the memory that is used by GPU manufacturers in their products and the price for graphics DRAM is expective to rise in the start of the new year, 2020.
Graphics DRAM prices may rise by up to 5 percent, according to the report by DRAMeXchange:
Graphics DRAM is more sensitive to demand change than other types of memory products, so its price fluctuations can be dramatic as well. With OEM clients raising their stock-up demand, Graphics DRAM contract prices are projected to increase by over 5% QoQ, the highest among all memory products.
Based on their report, this is mostly due to the shift of GPU manufacturers from GDDR5 to the new GDDR6 memory. Although NVIDIA was the first to use GDDR6 in its products starting with the GeForce RTX series.
Now even AMD is switching to the newer memory with the release of their new AMD Radeon RX 5700 series and RX 5500 series cards both with GDDR6 memory. AMD is also said to introduce their newest RX 5600 series at CES 2020.
According to DRAMeXchange, one of the major reasons for a DRAM shortage this time around is the release of new gaming consoles by Microsoft and Sony which will be equipped with the new GDDR6 memory and so it will greatly impact the supply of DRAM thus resulting in graphics cards getting more expensive.
The report states:
In the graphics card market, the majority of NVIDIA’s shipments of graphics cards are based on the RTX platform, and most of these RTX cards use GDDR6 memory. AMD is also proactively destocking its older graphics cards with GDDR5 memory; the company has completely switched to GDDR6 for its latest NAVI series of GPUs. In the game console market, Sony and Microsoft are still relying on GDDR5 for PS4 and Xbox One, respectively.
However, their next-generation consoles to be released in 2H20 (i.e., Sony’s PS5 and Microsoft’s Xbox Series X) will be equipped with GDDR6 memory. The memory capacity of these upcoming consoles could be raised up to 16GB, which is twice that of current mainstream graphics cards. Given these developments, demand is expected to exceed supply for graphics DRAM in 2020.
So with the release of the Xbox Series by Microsoft and PlayStation 5 by Sony, the demand for DRAM is rise greatly and suppliers will not be able to make such quick adjustments resulting in a rise in prices.
Currently, Graphics DRAM accounts for less than 6% of the industry’s overall output. Owing to a constrained supply and the abovementioned demand drivers, quotes are starting to stabilize. Because suppliers will not be able to make quick enough adjustments in their product mixes to immediately meet the rising demand, TrendForce forecasts a sharp rebound in the contract prices of Graphics DRAM in 2020, which will register perhaps the largest increase among products for different memory applications.
However, this is all still a speculation at this point and prices may not rise at all since most of the FRAM suppliers already have stocks piled up and they will also be increasing their current stocks and the shortage may not even be noticed.