The memory chip market is on the brink of a major transformation, with expectations that prices for DDR5 memory could decline sharply in the coming years. Kye-hyun Kyung, a former head of Samsung's Device Solutions Group, suggests that aggressive investments from Chinese companies in memory chip production may lead to a significant oversupply, contributing to a price drop by the second half of next year.
The demand for artificial intelligence (AI) chips has dramatically impacted memory prices worldwide. In Germany, DDR5 prices have surged by 414% since mid-2025. This increase has not only affected the cost of high-bandwidth memory (HBM) used in top-tier AI chips but has also prompted major tech firms like Apple and Dell to place preemptive orders, resulting in increased shipments to counter future price fluctuations.
Kyung shared these insights during his address at the 285th National Academy of Engineering of Korea Forum, where he highlighted the important role of Chinese manufacturers, especially ChangXin Memory Technologies (CXMT) and Jiahe Jinwei, in boosting production capacity. He noted that if these companies successfully ramp up output, the expected increase in supply could lead to a substantial decrease in memory prices.
Despite the optimism surrounding potential price corrections, Kyung also issued a warning about investment sustainability. He pointed out that if major technology firms see reduced returns on their AI capital expenditures, investments in production capacity could slow, potentially delaying the anticipated price correction.
Looking ahead, Kyung referenced market research data predicting that by the second half of 2027, production capacity could reach an impressive six million wafers per month. This expansion could significantly reshape the memory chip market, making it crucial for South Korean firms to strengthen their competitive edge in the global fabless chip sector.
As the memory market continues to evolve, stakeholders must closely monitor these developments, especially as AI's demand for high-performance memory remains a driving force behind both price volatility and production dynamics. The potential for a dramatic price reversal in the DDR5 segment highlights the interconnected nature of technology investments and market responses in the semiconductor industry.
Quick answers
What factors are driving the potential drop in DDR5 prices?
Aggressive investments in memory production by Chinese companies are expected to increase supply, leading to a potential price drop.
When might we see a decrease in DDR5 memory prices?
Prices could start to decline in the second half of next year, according to Kye-hyun Kyung.
How have recent price changes affected tech companies?
High DDR5 prices have prompted companies like Apple and Dell to increase shipments through preemptive ordering.
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MJI Desk
MJI Desk covers consumer tech for MJI News.
