Well, memory shortages have now reached a point where DRAM supply is being allocated to a few mainstream customers, implying that many vendors will struggle moving forward.
A Handful of PC Vendors Are Getting Long-Term DRAM Allocations From Producers, Giving Them an Edge Over Others
The ongoing DRAM supercycle has made suppliers the "king of the jungle", since the industry is now a seller's market, according to a report by DigiTimes. It is reported that with soaring memory contract prices, producers like Samsung and SK hynix are now only looking to sign LTAs with companies that are mainstream in the PC industry. Companies like Lenovo, Dell, Apple, and ASUS are primary beneficiaries when it comes to getting capacity from memory suppliers, given that they control most of the OEM supply chain. For smaller vendors, this means massive trouble.
Given the limited capacity on hand, Samsung and SK hynix aren't ready to sign contracts spanning multiple months; instead, they periodically evaluate the situation to reflect updated contract pricing and capitalize on the shortages. We already know that Apple previously scrambled to secure a general-purpose DRAM supply from suppliers for its iPhone production, and it appears that the Cupertino giant has benefited from its exclusive relationships with Samsung and SK hynix. Similarly, ASUS and Lenovo are also reportedly key priorities for Samsung.
Now that memory capacity is only available to a few vendors, it would be incorrect to say that these companies will have the upper hand in the retail market, which would allow them to control the prices of their consumer offerings. As the DRAM shortage deepens, the priority of consumers will ultimately shift from attractive pricing to availability, and that is where vendors like ASUS and Lenovo will benefit. In a previous report, we discussed how pre-built PCs would become a more viable option compared to custom configurations moving forward.
It would be interesting to see how the PC industry responds when memory shortages become the new norm, as it is clear that manufacturers will need to take drastic measures to ensure availability, either through aggressive price increases or reducing production.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
Follow Wccftech on Google to get more of our news coverage in your feeds.
