Has the memory chip market really “collapsed”?

01

DDR5 price plummets

What exactly happened?

Before we go further, let’s clarify two concepts: memory modules and memory chips.

A memory module is a finished product that can be bought in the regular computer market or online. Memory modules typically use DRAM (Dynamic Random Access Memory) as the memory chips. Several memory chips are assembled on a rectangular printed circuit board to form a module. In the chip spot market, what is more commonly traded and discussed are the memory chips themselves.

Based on current news reports, the most widely covered stories mainly convey two types of information: one is about “DDR5 prices crashing,” and the other focuses on “16GB memory modules dropping by a hundred yuan in a single day, with large holders starting to sell off.”

Tracing back the news, discussions about DDR5 price drops can be traced to around March 28 (local time).

Foreign media outlet wccftech reported that on Amazon US, Corsair memory modules saw price reductions. The VENGEANCE DDR5 series 32GB model with speeds up to 6400MHz was priced at approximately $379.99, down from a recent high of around $490 according to wccftech’s tracking. The 16GB DDR5-5200 model was priced at $219.99, also down from a previous high of about $260.

                                                       Source: notebookcheck

On March 29, foreign media outlets such as NotebookCheck, Kotaku, and Tom’s Guide followed up, and domestic media also began reporting. On March 30, well-known domestic media including Jiemian News and China Business Network (CBN) started covering the story. The news of a memory market “collapse” broke out of industry circles and sparked heated discussions.

A reporter from STAR Market Daily reported that as of March 30 this year, the price of mainstream 16GB DDR5 5600/6000MHz single modules on a major domestic e‑commerce platform had fallen from a peak of around 1,300 yuan in January–February to approximately 1,000 yuan, with cumulative declines for mainstream models generally ranging from 25% to 30%. Mainstream 32GB kits dropped from around 3,800 yuan to roughly 3,200 yuan, with some domestically branded models falling below 3,000 yuan.

As for the discussion about “16GB memory modules dropping by a hundred yuan in a single day, with large holders starting to sell off,” it can be traced back to a report by Chengshi Hudong on the morning of March 29. That report was later cited and widely circulated by multiple media outlets.

According to the report, a wholesaler surnamed Wang, who has been in the storage device business at Buynow for many years, said: “Starting last Saturday, prices just collapsed. From yesterday to today, a mainstream 16GB memory module dropped another 40 to 50 yuan. Last Saturday was even more dramatic—it fell more than a hundred yuan in a single day.”

Overall, memory modules have indeed seen price declines, but there are some differences between the domestic and international situations.

On the international front, the price reductions have been quite limited in scope. Looking at the examples cited by various foreign media outlets, the price cuts being highlighted are mainly concentrated on a few specific brands such as Corsair, while prices for other brands have remained largely unchanged. Placed in a historical context, the magnitude of these price drops is far less dramatic than the headlines suggest. Take the Corsair Vengeance RGB DDR5-6400 32GB as an example: its all-time low was around $87.99, and even though it has now dropped to about $370, it is still more than four times that historical low.

Turning to the domestic market, media reports mostly reflect feedback from the spot market for memory modules, where price softening has triggered a cascade of sell-offs. However, the current reports are largely based on interviews with individual wholesalers, so the overall situation still requires further observation.

02 Why the drop?

Currently, there are three main theories circulating across various platforms.

Theory 1: Google's TurboQuant paper

Recently, Google published a research paper on a new compression algorithm called "TurboQuant," claiming that the technology can reduce the memory footprint of the key-value (KV) cache during large language model runtime by at least 60%. As soon as the news broke, investors quickly interpreted it as a sign that AI memory demand would be significantly reduced, triggering a strong reaction in the capital markets.

However, according to a report by Wall Street CN, HSBC believes it is too early to worry: the technology is still about a year away from commercialization, and the parameter scale used in testing is smaller than that of the current AI environment. HSBC's assessment is that TurboQuant improves system efficiency and reduces token costs, and the net effect will actually accelerate AI adoption, thereby driving growth in memory demand. They view it as "a positive event that should trigger a sharp increase in AI adoption rates."

Theory 2: OpenAI fails to fulfill procurement commitments

According to a report by Yahoo Finance, the recent memory price surge was partly driven by an agreement OpenAI signed with Samsung and SK Hynix last October: a commitment to purchase 900,000 DRAM wafers per month, accounting for approximately 40% of global supply. However, OpenAI has recently made a series of moves: shutting down its AI video application Sora, abandoning a partnership with Oracle to expand the Stargate data center in Texas, and gradually scaling back its previously ambitious investment plans amid pressure from investors and intensifying competition from rivals. This has raised market concerns that the procurement demand that had supported memory prices may ultimately fail to materialize.

IDC analyst Francisco Jeronimo said, "If those contracts don't materialize, memory prices will definitely ease." However, he also cautioned that it is still too early to judge whether prices will continue to decline.

Theory 3: End customers are starting to say no

According to a report by Wall Street CN, Taiwan-based semiconductor analyst Dan Nystedt believes that TurboQuant is merely a surface-level factor. The real reason, he argues, is that prices for some smartphone memory chips have stopped rising—"buyers finally said 'no,' which is the first sign of a peak that experienced memory cycle investors look for before selling." He revealed that some buyers had already rejected higher DDR4 quotes two weeks ago.

In response, independent analyst Jukan offered a different perspective: buyer resistance is mainly focused on legacy memory such as DDR4, while DDR5 is a completely different story. Flagship products built around DDR5 cannot downgrade their specifications, and manufacturers have been accepting price increases without objection in the first quarter and even into the second quarter. He also noted that Samsung, SK Hynix, and Micron are moving toward TSMC's model—ensuring prepayments and long-term demand visibility from core customers before expanding capacity, rather than reflexively overbuilding capacity as they might have done in the past.

03

What's the situation in the chip spot market?

After the news of a memory market "collapse" broke out of industry circles, what is the actual situation in the spot market?

The memory price declines reported in the news mainly refer to memory modules, whereas the spot market primarily deals in memory chips (DRAM chips). Overall, the news has had a relatively limited impact on memory chip prices in the chip spot market, though it has inevitably introduced some panic. Some friends who work with memory modules added that the news has had a relatively greater impact on the memory module market.

In February and March of last year, after news emerged that the three major manufacturers were discontinuing DDR4, DDR4 prices began to rise. In June, Micron officially announced the discontinuation of DDR4, and the market subsequently took off. In early October, OpenAI announced a strategic partnership with Samsung and SK Hynix, and after the National Day holiday, the spot market surged again. In November, the three major manufacturers changed their contract price quotation framework from "quarterly" to "monthly," and the upward trend continued. From late December to early January, the memory market experienced another small peak in demand, during which NAND Flash and NOR Flash also saw significant surges.

After the Chinese New Year, DDR4 prices first entered a consolidation phase and then began to decline before long. Taking a certain Samsung 8Gb DDR4 as an example, its price surged to above $30 in January but has been falling since after the New Year, now dropping to around $20. A certain Samsung 16Gb DDR4 rose to about $100 in January and is now down to around $60.

However, a distributor who mainly deals in Micron products said that some of Micron's 8Gb DDR4 chips have seen price drops, while 16Gb has remained relatively stable. Currently, the average price for 8Gb is around $25, and for 16Gb, it's around $80.

In the DDR5 chip market, there are not many players to begin with, and some distributors said that DDR5 prices have also fallen after the Chinese New Year.

According to the latest spot memory price report from TrendForce, the upward momentum in the DRAM spot market has clearly stalled, with DDR4 performing particularly weakly. The mainstream DDR4 8Gb (1Gx8) 3200MT/s chip saw a price decline of 0.29% this week (March 18–24), falling from $34.10 to $34.00.

From the demand side, some sources said that after the Chinese New Year, demand has softened somewhat, and customers have relatively low target prices (TP), but transactions are still happening. Others noted that DDR3 demand is currently relatively stronger.

As for the reasons behind the price drop, some say that demand is insufficient to support the current high prices, while others suggest that some players who bought in at high prices are now "dumping" their inventory in response to the current market conditions.

This wave of news about memory price declines came suddenly and generated significant attention. However, based on the information available so far, the actual market situation is far more complex than the headlines suggest. The pullback in the memory module spot market, the sharp reactions in the capital markets, and the divergent views among various parties on the future trajectory all point to the same question: Is this a turning point in the trend, or merely a fluctuation within a period of high-level consolidation? As for the future direction of the memory chip spot market, we will continue to monitor it closely.