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if you've ever suddenly needed to buy a computer memory or an SSD there's a good

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chance you've experienced either sticker shock or a pleasant surprise when you

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looked up how much it cost indeed both RAM and the nand flash that holds the

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data inside ssds are notorious for fluctuating in price more than other

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components but why to answer we spoke with our friends at

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g-skill and we'd like to thank them for contributing their insight as it turns

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out the main reason is that both RAM and

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nand flash are commodity goods and when we say commodity we mean a good

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that can be used in many different types of markets think about corn for example

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you can eat it sure but it can also be used for everything from animal feed to

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biofuel so large amounts of it are regularly sold to many different types

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of businesses the dram and nand markets work in much

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the same way nearly all modern electronic devices everything from tvs

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to smart watches to heck even internet connected microwaves need both RAM and

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flash storage not just computers by comparison something like an x86 CPU

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from Intel or AMD is really only being

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sold to two kinds of markets system integrators like dell or hp and

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retailers like newegg and micro center you also have the fact that dram and

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nand can be shipped off more or less unchanged to these different customers

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for example the RAM that's inside your computer is not all that dissimilar from

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the RAM inside your phone so if a RAM manufacturer is trying to increase

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supply to serve a bunch of different use

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cases all they really have to do is shrink the

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process node so they can fit more RAM chips on one wafer then they cut it up

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like a square cut pizza and send however many chips to buyers serving each of

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these different segments contrast that with something like

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manufacturing displays where different resolutions and panel types mean that

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serving many different markets is much more challenging for any single

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consolidated manufacturer so this ends up meaning that more external forces are

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exerting influence on how much dram and nand will cost you and also means that

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manufacturers have a much harder time estimating how much supply they need to

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keep on hand that means that both supply gluts and shortages are more likely

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shortages can and have been caused by many different things for example there

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can be unforeseen high demand when a hot new phone comes out that everyone wants

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or even a service that causes a spike in demand on the server side of things i

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mean think how much more memory google might suddenly require if their stadia

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game streaming service were to take off good luck with that other times supply

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can be strained by production problems such as power outages that disable the

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systems used to maintain their dust free environments on the production line

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meaning that manufacturers have to scrap whatever's on the line and start from

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scratch now this might only set things back a week or two and have a minimal

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impact on prices but other times natural disasters like earthquakes and fires

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have shut down fabs for months at a time resulting in significant shortages in

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supply something that notably happened to sk hynix back in 2013. there's also

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the possibility of politics muddying things up as they so often do for

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example there was a trade dispute between japan and korea in 2019

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japan supplies lots of raw materials used in the manufacture of dram and nand

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meaning that the fabs in korea couldn't get the ingredients they needed for a

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short while now that situation was fortunately resolved quickly but any kind of more

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protracted conflict could have driven prices up in a big way of course

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sometimes mishaps end up working in the consumer's favor instead in the mid

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2000s there was a huge surge of people buying mobile devices like phones and

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the RAM manufacturers assumed that this trend would just

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keep going the way that it was so they started churning out lots more RAM but

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instead the market got saturated suddenly everybody already had a phone

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or two and sales slowed down so suddenly there

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was a lot of excess supply meaning that folks who bought RAM during this time

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ended up getting a bargain there have even been times that memory prices have

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been pushed below the manufacturing cost for the dram chips because it's worse

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for the manufacturers to shut down the fabs than to keep pumping out chips at a

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loss like during the great pringles incident of 1994

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which actually wasn't a real thing it was never a pringles incident

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that i know of but you know what there was this segue

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