if you've ever suddenly needed to buy a computer memory or an SSD there's a good
chance you've experienced either sticker shock or a pleasant surprise when you
looked up how much it cost indeed both RAM and the nand flash that holds the
data inside ssds are notorious for fluctuating in price more than other
components but why to answer we spoke with our friends at
g-skill and we'd like to thank them for contributing their insight as it turns
out the main reason is that both RAM and
nand flash are commodity goods and when we say commodity we mean a good
that can be used in many different types of markets think about corn for example
you can eat it sure but it can also be used for everything from animal feed to
biofuel so large amounts of it are regularly sold to many different types
of businesses the dram and nand markets work in much
the same way nearly all modern electronic devices everything from tvs
to smart watches to heck even internet connected microwaves need both RAM and
flash storage not just computers by comparison something like an x86 CPU
from Intel or AMD is really only being
sold to two kinds of markets system integrators like dell or hp and
retailers like newegg and micro center you also have the fact that dram and
nand can be shipped off more or less unchanged to these different customers
for example the RAM that's inside your computer is not all that dissimilar from
the RAM inside your phone so if a RAM manufacturer is trying to increase
supply to serve a bunch of different use
cases all they really have to do is shrink the
process node so they can fit more RAM chips on one wafer then they cut it up
like a square cut pizza and send however many chips to buyers serving each of
these different segments contrast that with something like
manufacturing displays where different resolutions and panel types mean that
serving many different markets is much more challenging for any single
consolidated manufacturer so this ends up meaning that more external forces are
exerting influence on how much dram and nand will cost you and also means that
manufacturers have a much harder time estimating how much supply they need to
keep on hand that means that both supply gluts and shortages are more likely
shortages can and have been caused by many different things for example there
can be unforeseen high demand when a hot new phone comes out that everyone wants
or even a service that causes a spike in demand on the server side of things i
mean think how much more memory google might suddenly require if their stadia
game streaming service were to take off good luck with that other times supply
can be strained by production problems such as power outages that disable the
systems used to maintain their dust free environments on the production line
meaning that manufacturers have to scrap whatever's on the line and start from
scratch now this might only set things back a week or two and have a minimal
impact on prices but other times natural disasters like earthquakes and fires
have shut down fabs for months at a time resulting in significant shortages in
supply something that notably happened to sk hynix back in 2013. there's also
the possibility of politics muddying things up as they so often do for
example there was a trade dispute between japan and korea in 2019
japan supplies lots of raw materials used in the manufacture of dram and nand
meaning that the fabs in korea couldn't get the ingredients they needed for a
short while now that situation was fortunately resolved quickly but any kind of more
protracted conflict could have driven prices up in a big way of course
sometimes mishaps end up working in the consumer's favor instead in the mid
2000s there was a huge surge of people buying mobile devices like phones and
the RAM manufacturers assumed that this trend would just
keep going the way that it was so they started churning out lots more RAM but
instead the market got saturated suddenly everybody already had a phone
or two and sales slowed down so suddenly there
was a lot of excess supply meaning that folks who bought RAM during this time
ended up getting a bargain there have even been times that memory prices have
been pushed below the manufacturing cost for the dram chips because it's worse
for the manufacturers to shut down the fabs than to keep pumping out chips at a
loss like during the great pringles incident of 1994
which actually wasn't a real thing it was never a pringles incident
that i know of but you know what there was this segue
to our sponsor brilliant brilliant's mission is to help people achieve their
learning goals so whether you're a student a professional brushing up or
learning a cutting edge topic or someone who just wants to understand the world
better you should check out brilliant you can check out their course on
computer science it'll give you a strong understanding of fundamental algorithms
for a solid foundation in the subject and you can even learn how to program a
drone cool right if you're naturally curious you want to
build your problem solving skills or you need to develop confidence in your
analytical abilities get brilliant premium to learn something new every day
brilliance thought-provoking math science and computer science content
helps guide you to mastery by taking complex concepts and breaking them down
into bite-sized understandable chunks the first 200 of you who head to
brilliant.org techwiki are going to get 20 off their annuals premium
subscription so go check it out right now thanks for watching guys like
dislike check out our other videos leave a comment if you have a suggestion for a
future fast as possible and please don't forget to subscribe