Rocketing RAM prices are the talk of the PC gaming town at the moment, but ask people which tech hardware company is set to make the most money out of the current AI boom, and many will tell you it’s Nvidia. They stand a good chance of being correct, too, when it comes to any individual business, but new forecasts by tech consultancy firm Trendforce suggest that it will actually be memory manufacturers that will be swimming in money over the next 12 months.
As we all ponder just how to get the best gaming RAM for our system without having to skip a month’s rent or remortgage the house, the likes of Micron and Samsung (though Trendforce doesn’t specify any particular companies) are set to make a combined $551b over the coming year, utterly dwarfing the $181.1b made by Nvidia in the last year.
Not only is this a vast sum of money compared to other big tech manufacturers, but it’s also a massive 134% increase on previous years. Notably, this AI boom windfall isn’t finding its way to other manufacturing sectors quite so readily. Trendforce predicts a still very healthy $218.7b in revenue for general silicon chip production foundries – think Global Foundries and TSMC (which makes AMD and Nvidia’s chips) – with their revenue expected to rise by just 25%.
This forecast is also centered on the producers of the memory chips used in PC RAM, GPUs, and other products, rather than on the PC RAM makers themselves. So, it’s not the likes of Corsair, but who Corsair buys its chips from.
Overall revenue doesn’t necessarily mean profit for a company, of course, and Trendforce doesn’t explicitly explore the potential profit margins for the sector. However, it does point out that “supply shortages are unlikely to be resolved soon, [so] memory suppliers maintain very strong pricing power.” In other words, the companies can charge what they like, which is generally a pretty strong sign of high profitability.
The chart above highlights just how drastic the uptick in memory revenue is set to be, with none of the previous 10 years on the chart showing anywhere near such a dramatic change. Notably, it’s the sheer scale that’s so incredible. It’s one thing for a single company or a previously low-value sector to suddenly get a boom in business, but for an entire sector to suddenly be asking for an extra $200b+ from the world economy, well, that’s a whole other level.
What does this mean for us trying to buy RAM, GPUs, gaming laptops, and gaming PCs at affordable prices? Not a great deal that we didn’t already know. The rise in RAM prices over the last few months has been well documented, and these forecasts don’t specifically suggest there will be further increases. Merely that, lo and behold, when you quadruple the price of something, you get to make a lot more money from it.
We just live in hope that the RAM price predictions of the head of PR for graphics card maker, Sapphire, do pan out, and we see this madness settle down within the next six months.
