NVIDIA & AMD Graphics Cards Could Get More Expensive in 2020 Due To Rising DRAM Demand

Well if you were waiting for NVIDIA's and AMD graphics card's prices to come down, a report from DigiTimes states that they are expected to climb even further in 2020 and graphics DRAM shortage would be the primary reason for it.

Graphics DRAM Prices Expected To Rise Over 5% in 2020 - Could Directly Affect NVIDIA & AMD Graphics Cards

Quoting DRAMeXchange, DigiTimes states that graphics DRAM, or the memory that is used by GPU manufacturers to power their products, is expected to get more expensive by Q1 2020. It is stated that prices for graphics DRAM can rise by over 5%.

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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.

via DRAMeXchange

The reason behind the price increase is said to be supply constraints since all major consumers of Graphics DRAM are shifting from GDDR5 to GDDR6 memory. NVIDIA was the first to switch over to the new graphics interface, starting off with their GeForce RTX lineup but have now included even GeForce GTX parts that support the new GDDR6 memory interface. These mainstream and budget tier cards are aimed at the mass market, hence making NVIDIA one of the biggest consumers of the GDDR6 memory.

Similarly, while AMD had a large stock of older GDDR5 memory-based graphics cards, they too are transitioning their latest Navi cards to GDDR6. The AMD Radeon RX 5700 XT and the RX 5700 were the first AMD cards to feature the GDDR6 memory design and they have recently released the RX 5500 series cards which aim the mobility and desktop markets and feature GDDR6 memory. AMD is also going to introduce a third Navi based series known as the Radeon RX 5600 around CES 2020 which is also confirmed to feature GDDR6 memory.

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.

via DRAMeXchange

Now historically, NVIDIA & AMD haven't seen Graphics DRAM as a major constraint aside from the infamous Crypto crisis which led to a small DRAM shortage. Both companies have managed just as well even in times of DRAM shortages but there's a third and bigger force this time which would be consuming the same graphics DRAM too, and these are the consoles.

Both Microsoft and Sony are expected to launch their Xbox Series X and PlayStation 5 consoles next year which will also adopt AMD's Navi architecture and the respective GDDR6 memory architecture. A lot of supply would be required to keep up with the demand of the next-generation consoles and that's what's leading us and many analysts to believe that Graphics DRAM would be seeing a major shortage.

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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.

via DRAMeXchange

Speaking to an Analyst of TrendForce, Arvil Wu, it is mentioned that graphics DRAM has a higher production cost per chip and while these reflect the contracts between the DRAM suppliers and graphics manufacturers, they still lead to the price being affected of the consumer products. This could lead to a price hike of not only existing GDDR6 based graphics cards from AMD and NVIDIA but also their next-generation products, which are also expected to retain GDDR6 unless both companies decide to go the HBM2/E route which is more likely of a case with AMD, at least for the consumer market while HPC products from both companies already utilize the faster HBM DRAM standards.

There's nothing to worry right away as the GDDR6 stock is still doing good and we haven't really seen a price increase on consumer graphics cards so far. Samsung, SK Hynix, and Micron are also expected to grow their Graphics DRAM supply by 15% in 2020. So if things go smoothly, we might not even feel the impact of the shortages on graphics cards but you never know what's going to happen so once again, if you're planning to buy a graphics card, now is the time to do so.

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