RAM, or Random Access Memory, is a vital part of modern technology, from smartphones to computer systems. But why is the most widely used product expensive?
Despite the fact that RAM is in every digital product that stores data for a brief moment for processing, RAM can be a bit pricey.
In order to provide you with a clear and complete picture, I will go into more detail about these contexts in this post. So keep reading; you will learn a lot about the market.
Let’s begin!
Why Is RAM So Expensive?
There is no one answer for the reason why RAM is so expensive. Multiple factors have played a role in increasing the price of RAM as well as other computer hardware components. Shortage of chips and rising demand for high-end gaming products are the significant cause of a few of them.
Other reasons will be discussed here, so keep reading to learn more about what is happening in the current market today.
Here Is The Reason Why Is RAM So Expensive:
1. Rising Demand, Less Supply
One of the main reasons for RAM being expensive is that the demand for RAM and other computer products has exponentially risen in the last couple of years.
Five years back, computers were for the geeks and nerds, but it turns out everybody started having an interest in playing games to chill. It has become quite the trend. The best RAMs are now in high demand.
People have become more inclined towards buying gadgets, computer products, etc. Everyone wants to get their hands on new RAM sticks and graphics cards to upgrade their computers.
This is great, but due to the fact that RAM is only manufactured by only a few companies, in addition, these companies control the supply with capitalistic business models, and they don’t increase the supply of RAM for the people’s gain.
Instead, these companies raise the price every time, blaming the shortage of chips, which is somewhat true, but many business insiders have reported that this is just a monopoly they are playing in the RAM market to increase profit margin.
The mismatch in supply and demand has increased the prices for RAM chips by much.
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2. COVID-19
The covid-19 Pandemic played a considerable part in increasing the price of every technological product, and every computer component has suffered from this.
During the pandemic, new people around the globe became heavily invested in gaming, getting CPU, GPU and RAM upgrades for overclocking their systems. Many companies also started Office From Home to keep the workflow stable, which resulted in an increased demand for new computers.
Moreover, cloud computing has also become quite popular nowadays. This has resulted in people’s need to upgrade their computers and higher demand for other hardware parts.
Due to fewer production workers and human resources, most of the products became rare to find, so shop owners and hardware manufacturers didn’t lose the golden opportunity to display their products at high prices.
This time many shops stopped selling spare parts, even if they had them or not, and only sold them with a complete computer configuration.
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3. Complex Technology
RAM is a complex digital product that requires highly complex equipment and machines to create and solder microchips. And these things are done in not any average factory.
RAM manufacturing companies always need to stay clean without any kind of dust in the air because any kind of contaminants can affect the development of the chips, Which is why these companies maintain an amazingly clean production environment.
And not only that, RAM manufacturing companies also need advanced equipment with highly skilled engineers to keep updating the designs.
Creating RAM is a highly delicate subject; everything is done with robots for precision working; PCB (Printed Circuit Board) or the mainboard of the RAM is created in extremely clean surroundings with senior engineers. It is the stuff motherboards are made of. After the boards are created or bought in from other companies that manufacture them, they integrate the microchip on the PCB to create the IC (integrated circuit).
Moreover, RAMs are of different types: DRAM (dynamic RAM) and SRAM (static RAM), which are further categorized into some other types. DRAM prices are a bit cheaper than SRAM prices but both are pretty complex to manufacture. In comparison, DRAM is easier to make than SRAM.
These steps require huge loads of money to run everything smoothly, resulting in the price increase for RAM.
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4. Broader Uses And Applications
The use of RAM has grown in the last decade. RAMs were a thing only for the computer back then, but slowly, many digital products like mobile devices are becoming smarter day by day. So, nowadays, a simple Xerox machine, Smart fridge, Smart Television, and all Smart appliances have RAM in them.
Now I guess you have understood that RAMs are not only for computers also. Many smartphone manufacturers are paying extra money to get the latest RAM technology.
For example, companies like Samsung, Apple, and Google pay top dollar to get them faster than others.
The production of consumer RAMs gets slowed down because RAM manufacturers become busy pleasing tech giants because those companies are paying hundred thousand dollars to stay at the top of the market.
5. Smartphone Companies
Just like smart appliances, Smartphone companies have started to produce a large number of smartphones. This is also a reason behind the price of RAM.
Nowadays, smartphones have 8GB to 16GB worth of RAM space just for a 6-inch phone. Recently many smartphones, such as Pixel phones and many other brands, have adopted DDR4 chips, and these Smartphone brands are paying a good amount.
Additionally, smart phones are being released in large quantities, and the pressure for producing RAMs has increased significantly, thus resulting in the price hike of computer RAM.
Last year alone, 1.43 billion units of smartphones were sold worldwide.
RAM companies put more focus when big brands like Google, Samsung and iPhone come with a deal.
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6. Chip Shortage
Recently, the global chip shortage has affected the digital market; due to the lack of chips, many computer hardware, as well as PlayStation 5, Xbox Series X, and other gaming consoles, are not available in the market, and many people are still waiting to get one.
After the 2020 chip shortage hasn’t seen a bright light to this day, the price of DDR5 memory will be more expensive than the price of DDR4 memory. Although, the DDR3 to DDR4 memories are safe even if the shortage situation is not handled well. This may also mean a rise in the demand for DDR4 RAMs.
The manufacture of RAM with the production of other computer and smartphone products will be affected as long as there is a chip shortage.
Despite the fact that the shortage can get better, we don’t know when the price will reduce to normal again. The high demand and less supply of RAMs due to the shortage of chips have their price increasing as well.
7. Increased Cost Of Raw Materials
Raw materials are the most important components to building something from scratch; without raw materials, RAM is impossible to make.
But the cost of raw materials has skyrocketed in recent years, and it looks like this won’t stop any time soon. Worldwide the cost of materials has increased, which has an impact on RAM pricing as well.
Because every product manufacturer and RAM company must make a profit from their products, they will keep the production on and everything running even if it means increasing the price of their product.
Although, We won’t be seeing RAM prices decrease as long as these materials costs continue to rise.
You should also know that if we want affordable RAM when these productions costs need to be in check if not, the prices will increase even more.
8. Labor Costs
Like the material cost, the labor cost also significantly increased more than before, and these two things are somewhat directly proportional to each other, meaning both of the prices go up at the same time.
Labor cost has increased because it takes many people who are experienced in making RAM with years of expertise.
Expert engineers and professionals supervise the RAM production process and advise manufacturers on how to improve their RAM production.
This is why RAM companies pay a good amount of salary to these engineers because such expertise doesn’t come with a cheap cost.
If not, these engineers will change the company for a better salary because other companies are scouting the best engineers all the time and are willing to pay more to get them.
9. Business Model
You may think that RAM manufacturers send the sticks directly to customers but that’s not the case. RAM or any hardware manufacturer doesn’t do business with average customers. These companies follow a business model called B2B.
This means Business to Business model; in other words, these companies do business with other businesses as dealers or wholesalers, and after that, these dealers sell the products to normal shops.
This means that RAMs make a change of hands at least 3 or 4 times until you or I get them, and in every exchange, the price gets higher one by one because of their shipping cost, and the sellers have to make a profit after selling them.
So the entire supply chain is shaped in a way that, in every exchange, the price will increase. This reason is also why the price of buying new RAM is so high.
10. Price Fixing
Price fixing in business is not new to the world, and this has happened before with GPUs, Printers and other computer hardware.
DDR3 RAM faced this issue back in the day, so price fixing might be the culprit here for raising the price of DDR5 RAM, and who knows what will happen when technology tries to adopt the DDR5 RAM?
These are the top ten reasons why the price of not only RAM but also the price of other hardware products is becoming expensive. If you want to buy RAM, then you can buy it now or getting a second-hand one can save a lot of money.
Usually, RAM comes with a lifetime or 5-year warranty, so there is nothing to think about. Getting second-hand RAM would be a wise decision.
Check our latest post on how to ship RAM safely?
How Much RAM Do I Need?
Depends on what you are trying to do with your computer; if you want a computer just for browsing the internet and for working office applications, then 8GB DDR4 RAM will be enough. But if you are building your computer for gaming, then getting a 16GB RAM minimum is a must.
But I would suggest you get at least 32GB RAM because then you would not have to worry about changing the RAM for a few years.
Those were for only office and gaming setup, But if you want a computer for 3D images or animation, then you will need more than 32GB RAM.
Frequently Asked Questions
Does Ram Increase FPS?
If you use lower RAM than the games requirement, the FPS could fall but if you have enough RAM for the games system requirement, then you might get a slight boost but not any significant amount.
Is 32GB Of Ram Overkill For Gaming?
No, Some games require 16 GB of RAM for recommended settings, let alone Windows take 6 to 8 GB of RAM to keep everything running in the background, so 32GB RAM is not overkilled for gaming.
How Much Ram Is Overkill?
128GB RAM will be overkill for sure, many have stated that 64GB RAM is overkill, but these days many software for running AI and other software for 3D images and motion design can cost 32 or more GB of RAM just for finishing the project. So with these things in consideration, 128 GB RAM is overkill.
Conclusion
With everything in perspective, you can say that there are multiple reasons why RAMs are expensive; some are for ethical and some unethical reasons. Many Smart device brands are moving towards RAM because it is an essential part of modern technology.
No one can guarantee when the price will get back to normal. If you want to buy RAM, then I would suggest getting it right now because in the current state of the market price can get higher
I hope you have found your answer after reading my post. Don’t forget to leave a comment if you want to know more.
