The PC supply chain has begun to react to the ongoing memory shortage, as a new report indicates a massive price hike wave is approaching gamers.
PC Manufacturers Cannot Sustain Products at Current Pricing Amid Rising DRAM Shortage
By now, memory shortages have made headlines across almost every major media outlet out there, but one aspect of it that is being underreported is the fact that PC vendors in the industry are mostly relying on inventory buildout from the previous quarters, which is why when it comes to consumer devices like laptops, the price hikes haven't been as noticeable as compared to RAM modules. However, according to a report by ZDNet Korea, quoting an anonymous supply chain source, it is disclosed that major PC manufacturers are suffering losses by maintaining existing prices.
PC manufacturers react sensitively even if the cost of production increases by just 1 cent (0.01 dollars, about 14 won). Even if they try to reduce it by just a few cents, if the cost of production increases by tens of dollars at once, they will naturally incur a loss.
In particular, the supply prices of core laptop components, such as processors (CPUs) and batteries, as well as memory and SSDs, have increased. We have no choice but to raise the prices of new products coming out next year by at least 20% and quickly discontinue existing products.
- ZDNet Korea (Automated Translation)
One of the bigger reasons why manufacturers would ultimately need to hike prices of products involving memory is that DRAM producers like Samsung and SK hynix are allocating a huge chunk of their production to cater to the AI sector, with products like HBM and LPDDR memory, which means that if vendors want allocation for consumer products, they would need to pay much higher, to meet contract prices. And, even if the finances are there to afford 'expensive' memory, DRAM producers are prioritizing "profitability", which means that most of the output is being dedicated to the AI industry.
The report claims that gamers should factor in a 20% price hike, which would occur across all next-gen products, aligning with the rumors surrounding rising GPU prices for the upcoming quarters. Upcoming devices based on Intel's Panther Lake or AMD's Gorgon Point APUs will be significantly more expensive compared to their predecessors, as vendors like ASUS, Acer, and Lenovo lack sufficient inventory to sustain the current pricing structure. Interestingly, the prospect of increasing DRAM production also comes with its own complications, which we'll discuss ahead.
Samsung and SK hynix are also factoring in the risk of 'oversupply' in case DRAM production rises drastically, which means that the PC industry would likely experience a period of supply constraints with DRAM-based products. All indicators suggest that building a PC next year will be significantly more expensive compared to current costs.
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.
