Smartphones and PCs were going to be the obvious casualties of the DRAM shortage, but this global problem has also begun affecting routers, with the latest data revealing that companies mass producing networking equipment that don’t have a secure supply chain or strong negotiation power have been struck the hardest. With demand for memory increasing for AI server segments, both DRAM and NAND flash prices have jumped by more than 600 percent, meaning that if you want to upgrade your home or work network, you’d better upgrade fast.
Around 20 percent of low-to-mid routers’ Bill Of Materials (BOM) accounts for DRAM costs; just a year ago, this figure was 3 percent
The latest report from Counterpoint Research has summarized monthly trends since last year, and has said that where smartphone DRAM prices have climbed by 3x, the same memory found in broadband products has jumped by nearly 7x. It is possible that these price increases are due to routers shipping in smaller volumes compared to smartphones, or it is likely that companies don’t have as robust a supply chain for DRAM as other firms, forcing them to fork over a higher sum.
“While the difficulties being faced by the PC and lower-end smartphone industries with “mobile memory” are now well known, other consumer products like routers, gateways and set-top boxes are affected the most, going by the monthly trends since last year. Over the last nine months, smartphone memory prices jumped 3x, but the prices for “consumer memory”-based broadband products jumped almost 7x.
Routers are hit the hardest, especially for OEMs with an unsecured supply and weaker negotiating power. Memory is now contributing more than 20% of the total bill of materials (BOM) in low-to-mid-end routers, up from around 3% exactly a year ago, according to Counterpoint’s Teardown and BOM Analysis Service.”
TP-Link, which currently dominates the U.S. router market, hasn’t confirmed if it will raise prices for consumers, but Counterpoint Research has said that telcos should keep a close eye on these memory price trends and then make the necessary adjustments.
News Source: Counterpoint Research
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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