SK Hynix fire sends memory prices soaring

Memory prices were supposed to level off toward the end of this year, but guess what? That ain’t happening. In fact, according to Bloomberg, DDR3 prices have reached a two-year high in the wake of a fire at one of SK Hynix’s factories in China. Here’s the skinny:

The price of the benchmark DDR3 2-gigabit dynamic random-access memory chip reached $2.27 yesterday, compared with $1.60 on Sept. 4, when a fire forced the closing of SK Hynix’s factory in Wuxi, according to DRAMeXchange, Asia’s largest market for the components. Icheon, South Korea-based SK Hynix expects to resume production on the fire-hit line next month.

In a statement to Bloomberg, analyst Oh Sang Woo predicts that memory prices “will continue to rise throughout the fourth quarter.” At the very least, he adds, “There will be no drop until the operation gets into full swing.”

Oh well. So much for those of us eying a new PC upgrade this Christmas.

Comments closed
    • Welch
    • 7 years ago

    I’m curious if there aren’t other actors involved with this latest BS. For instance, forcing themselves out of the typical PC DRAM market to focus on other production markets more in like with the current mobile trend. Or perhaps that some big execs are being paid hansomly to allow their companies to fail for their own gain so that mobile can finally put a nail in the PC coffin (not happening)

    If one assumes that’s not the case and they are simply gouging where possible then I believe it is a grossly underestimated position for said DRAM manfucatures to be in. If you raise DRAM component prices it puts a strain on the PC market as a whole, causing a surge on PC parts pricing similar to what we saw with the HDD flooding. This in turn makes PCs a bit less competitive meaning more has to be charged for the parts to continue to stay afloat until eventually it sinks due to non-competitiveness.

    Keep price gouging different hardware manufacturers. Soon you’ll have no market to sell to and your herd will be thinned.

    • Krogoth
    • 8 years ago

    Unless you are trying to obtain high-density ECC modules. You are making a huge fuss over a trivial amount. Obtaining 8GiB and 16GiB, unbuffered DDR3 memory is still cheap as hell, despite the recent hikes.

    This is a first-world problem at its finest.

      • steveb5
      • 7 years ago

      A near enough 100% increase on this time last year is not in my opinion a trivial amount. Clearly you have better suppliers than I do.

    • Kougar
    • 8 years ago

    It’s funny how this happened before with DDR2 memory prices…. time to offload any spare kits laying around the house again!

    • UnfriendlyFire
    • 8 years ago

    I bet in a corner office somewhere, someone is noticing the trend of prices after the HDD flood and the DRAM fire.

    “Hey… What if one of the LCD factories ‘accidentally’ had a minor fire?… Would be a shame if the TV and monitor prices skyrocketed…”

    • UnfriendlyFire
    • 8 years ago

    And my dad called me an idiot for suggesting that I buy 8 GB of RAM last year, before my laptop needed it…

    Virtual machines eat memory. Lots of it. Especially when you’re connected to a university workstation to use Creo or Autodesk.

    • ClickClick5
    • 8 years ago

    Fellas, like gas prices, they will jump on ANYTHING that they can blame for the need for higher prices.

    A fire that did not damage production? Better raise the prices near 100%….cause….yeah…

    • MarkG509
    • 8 years ago

    I just picked up a 16GB ECC memory kit last night. Price was $30 higher than the kit that I bought 2 weeks ago, but $15 cheaper than the usual web haunts.

    Floods for hard disk makers, fires for dram makers. When the bottom starts dropping out of a market, expect an “accident” or “Act of God (or at least Mother Nature)” to prop those prices right back up.

      • nanoflower
      • 8 years ago

      Thing is that the prices had already started on the way back up. As I recall the low point for the memory I watch was around $40 but had already risen to about $50 before the fire hit. Now the prices sit up around $63 so there’s been a large rise in the last few months but the prices were already on the up swing this year.

        • Bauxite
        • 8 years ago

        Prices have been going up for the last year, they were already past the 2x mark before news of the fire broke. This will just get them to 3x πŸ˜‰

        Even though it turned out to be a non event on actual production (like 2 day shutdown of factory building that did 5% of supply, strange they are changing the story now…) this was bound to happen.

    • Hattig
    • 8 years ago

    The price rise is probably caused by speculation, rather than the memory manufacturers. Gamblers in high rise offices who bet and trade on future prices in order to make more money for themselves. These people control the final prices of most things, and their actions cause prices to soar and normal people to suffer – although slightly more expensive DIMMs isn’t on the same scale as a 50% more expensive loaf of bread to someone with limited money.

      • nanoflower
      • 8 years ago

      I don’t think DRAM is traded like a commodity (such as oil) so it shouldn’t be possible to easily manipulate the prices. More likely this is a result of the manufacturers rising prices a little on the news of the fire and then everyone down the line doing the same.

        • Hattig
        • 8 years ago

        No, don’t ruin my fantasy that lets me hate bankers and people in the financial world.

    • HisDivineOrder
    • 8 years ago

    Oh, I’m sure the fire was “accidental.” Wink, wink, nudge, nudge.

    • Meadows
    • 8 years ago

    This RAM price movement is the same as trading the news in stocks: “supply” moved higher because nobody wanted to continue selling at current prices, but “demand” is unchanged. The breaking news behind it (flood, fire, whatever) is largely irrelevant to the actual jump in price and it’s often just some interesting cover story.

    It doesn’t matter anyway. Price will have to go lower again if the demand stops supporting it later this year, assuming many people think like [b<]just brew it![/b<].

    • just brew it!
    • 8 years ago

    Not planning on buying any RAM over the next few months, so I think I’m good. πŸ˜‰

    • Bensam123
    • 8 years ago

    Tasty insurance claim and they get to raise the prices of their memory, totally smells like BS. This is the hard drive flood all over again.

    • Concupiscence
    • 8 years ago

    All I can say is THANK GOD I went for 24 gigs early this year… I shudder to think how much I’d pay if I’d put my build off until Christmas.

      • albundy
      • 8 years ago

      same here. sales of other hardware will suffer if prices go up. i am currently not touching a new build until DDR4 later next year or even farther down the road.

      • Srsly_Bro
      • 8 years ago

      Do you really think your god had anything to do with it? πŸ™‚

        • Scrotos
        • 8 years ago

        Fire and wind come from the sky, from the gods of the sky. But Crom is your god, Crom and he lives in the earth. Once, giants lived in the Earth, Conan. And in the darkness of chaos, they fooled Crom, and they took from him the enigma of steel. Crom was angered. And the Earth shook. Fire and wind struck down these giants, and they threw their bodies into the waters, but in their rage, the gods forgot the secret of steel and left it on the battlefield. We who found it are just men. Not gods. Not giants. Just men. The secret of steel has always carried with it a mystery. You must learn its riddle, Conan. You must learn its discipline. For no one – no one in this world can you trust. Not men, not women, not beasts.

          • Srsly_Bro
          • 8 years ago

          Ahh. It all makes sense now. Thanks.

        • Concupiscence
        • 8 years ago

        Eh, speaking metaphorically. Heedless of belief in any god, it’s still part of an ingrained cultural understanding that you dodged a bullet. πŸ™‚

    • albundy
    • 8 years ago

    +1 for manipulation and deception.

    • sschaem
    • 8 years ago

    [url<]http://www.zdnet.com/sk-hynix-china-plant-fire-wont-affect-chip-production-7000020281/[/url<] "Currently, there is no material damage to the fab equipment in the clean room, thus we expect to resume operations in a short time period so overall production and supply volume would not be materially affected," SK Hynix spokesperson Seongae Park This cause the Dram industry to raise prices by 50% ? My goodness what would have happen if Hynix factory was actually damaged... So just another lie .... I'm getting tired in the lack of honesty in the industry. Even if Hynix did have equipment damages (they didn't) having the plant completely destroyed to the ground, with all the equipment, would only affect 5% of the world dram production. Hynix provide 10% , and this factory full production is 50% of hynix total production. In reality: a) there was no substantial damages b) even if it did have damages it would only effect 5% of the world production. This is simply a way for the slumping dram industry to raise prices, as clearly aggressive competition lowered profit to unacceptable levels. edit: next .." LCD factory disapear into sink hole.. TV price wont be affected." .. a month later "TV price doubles!"

      • Bensam123
      • 8 years ago

      Gotta pad those bottom lines.

      • Srsly_Bro
      • 8 years ago

      DRAM is in CAPS just like LCD and TV. Y U NO CAPS DRAM BRO?

        • Bensam123
        • 8 years ago

        Because you forgot your vowels.

          • Meadows
          • 8 years ago

          Actually, consonants.

      • Wirko
      • 8 years ago

      I bought 4 MB RAM in 1993 at peak price. Reason for the price: some glue, some factory, and a fire. A LCD factory may be too big to fall in a sinkhole but I’m sure there’s some mysterious glue used in production, most of which is made in a single place.

      And besides the glue, there’s also the liquid crystal (most of it supplied by Merck) and the glass (most of it supplied by Corning). Do they both have 90% capacity left if one of their factories gets struck by a natural phenomenon?

        • Concupiscence
        • 8 years ago

        Oh, memories… Feeling like I’d gotten away with something by “only” paying $100 for 16 MB of RAM in 1996.

      • ronch
      • 8 years ago

      I was just about to post something similar to your post.

      Anyway, this Hynix fire is old news, and like you said, they already declared that no serious damage was done. The fact that they’re retracting that statement now only makes them look very dubious. I’m putting Hynix on the black list. Screw the other DRAM makers too for taking advantage of the Hynix fire to earn more money.

    • Game_boy
    • 8 years ago

    How would this increase the price of a retail 2GB module by any significant amount? That’s a $5.36 wholesale increase, yes, but the rest of the components/packaging costs/distribution is unaffected.

      • nanoflower
      • 8 years ago

      You may be right as far as how much the price should have increased but the fact is that memory has gone up quite a bit. I can recall memory being in the low $50s just a few months for 8GB of DDR3 and now the cheapest memory available will cost over $60 so the price has gone up $10.

        • derFunkenstein
        • 8 years ago

        I paid $90 for a set of Corsair 8GB DIMMs about a month ago. Looks like I bit at the right time.

          • Bauxite
          • 8 years ago

          The right time was when they were $60 in 2012 πŸ™‚

            • derFunkenstein
            • 8 years ago

            Well, yes, I suppose so but back then I didn’t have a need for even the 8GB that I had at the time.

      • juzz86
      • 8 years ago

      It affects the physical BoM very little in real-life. It just allows Marketing to capitalise, because we’ve already anticipated a price rise, so there’s ‘no reason’ not to.

    • south side sammy
    • 8 years ago

    saw it coming back in September.

    I kind of liked the story I read a week after the fire. said there was a 2month supply and it wouldn’t effect anything. whether it did or not, I had no doubt prices would increase. it’s their way of recouping some of the money lost when the prices plunged earlier on.

      • bittermann
      • 8 years ago

      I think half the forums on the Internet called it…they would find a way to milk it…

      • MadManOriginal
      • 8 years ago

      You saw a fire coming a year ago?

        • south side sammy
        • 8 years ago

        let’s stop with the BS already……………..

        [url<]https://techreport.com/forums/viewtopic.php?f=36&t=89325[/url<]

          • slowriot
          • 8 years ago

          Look at today’s date, now look at what you wrote, now look at what MMO wrote. See the joke now?

            • south side sammy
            • 8 years ago

            guess I can boot myself in the ass for that…………… seemed longer than it actually was……….. sorry mmo.

        • BIF
        • 8 years ago

        Sure!

        Detroit is taking Devil’s night reservations. For 2025!

      • derFunkenstein
      • 8 years ago

      Prices will always jump opportunistically.

      • Farting Bob
      • 8 years ago

      DRAM prices are like the stock market in that they are effected more by speculation than supply and demand, cost or quality. One part of one factory out of many stops temporarily and prices rise 40%?

    • jdaven
    • 8 years ago

    The new Malaysia flood excuse of the day to justify price hikes.

      • Deanjo
      • 8 years ago

      Probably was Hynix’s own board that set the fire.

      • NeelyCam
      • 8 years ago

      Usagi probably destroyed half the supply of EVERYTHING

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