DDR4 spot prices have been surging since March. Why is that happening, and what can we understand from it? The Memory Guy thought it might be helpful to chart what has happened with DDR4 and DDR5 spot prices to better understand that.
The chart below plots the lowest spot prices of tested DDR4 and DDR5 DRAMs of any configuration and speed from March of 2024 through June of 2025.
What does this tell us? In the early part of the chart the two lines representing DDR4 (red) and DDR5 (black) were relatively flat, indicating a stable market with a supply/demand balance. In May of 2024, DDR4 prices began to fall in sync with the market entry of CXMT in China, a new DRAM provider. When a new supplier wants to enter a market, they usually attract business away from existing competitors by lowering prices. This makes prices for all merchants fall, since the existing suppliers must lower prices in order to try to prevent the new provider from taking away their market share. This always happens during an oversupply.
As the price decline progressed, Samsung, SK hynix, and Micron began to phase out of DDR4 DRAM since the lower prices made these products unattractive — their profitability fell far below that of DDR5 and HBM products, so manufacturing resources were redirected towards the more profitable products. But prices continued to decline, a sign of a continuing overcapacity that indicated that CXMT was probably making more DDR4 than the market required.
Suddenly, in March 2025, prices started to rise, after CXMT began a dramatic production shift away from DDR4 to DDR5. DDR4 prices increased until they became roughly equal to DDR5 prices in May, and now prices for the two DRAM types have begun to track each other.
What Do DDR4 Prices Tell Us?
There are three elements to the curve’s changes relating to CXMT’s participation in the market.
First, price decreases begin when supply starts to exceed demand. Since the market was balanced before CXMT began production, it’s reasonable to interpret the chart’s price decline as an indicator of CXMT’s shipment volume: Prices were stable when there were no CXMT shipments, but when shipments began, prices started to fall, and as CXMT’s shipments increased, prices fell further. Given that this occurred despite Samsung, SK hynix, and Micron phasing out DDR4 products, we can further infer that CXMT’s shipment volume rose to a significant level, and was more than sufficient to completely offset any lack of DDR4 parts from existing suppliers. In other words, CXMT at this time was probably the industry’s dominant DDR4 supplier.
Second, price increases begin when a market becomes undersupplied. The increase that began in March 2025 tells us when CXMT started to ship less DDR4 than the market required, and the continuing price increases should line up with decreases in CXMT’s DDR4 output as the company converted its capacity to DDR5.
Third, DDR4 prices now track DDR5 prices. There are probably two ingredients to this. One is the fact that DDR4 users may have started redesigning DDR4-based systems to use DDR5 so that they could take advantage of DDR5’s superior performance at the same price, or they may have phased out existing DDR4-based system sales to focus more effort on existing DDR5-based system sales. Either would decrease DDR4 demand. The other ingredients would be a move by CXMT to continue producing a certain amount of DDR4 now that their prices matched DDR5, presumably allowing the two products to be equally profitable. Other suppliers may also have slowed their market exits from DDR4 once prices reached this point.
Why Did This Happen?
In China, many businesses are owned or controlled by the national government. CXMT is a subsidiary of Innotron, which is a government-owned company.
China has a national goal of becoming self-sufficient in semiconductors, a factor that was a part of the country’s “Made In China 2025” initiative. Significant detail of this initiative and China’s overall strategy are provided in the Objective Analysis report: China’s Memory Ambitions, which can be purchased for immediate download by clicking the link on the report’s name. CXMT provides the DRAM part of this strategy.
According to press reports, The Chinese government directed CXMT to convert production from DDR4 to DDR5 as soon as the company was able. The order was said to have been given in the 4th quarter of 2024, and the price transition changed from a decrease to an increase in the middle of March 2025. Given that it takes about one quarter for material to be processed in a fab, any decision to convert from DDR4 to DDR5 should have taken a full quarter to implement. This, then, agrees with the press reports, and indicates that the transition probably began in the middle of December.
Government-owned companies are not always required to turn a profit since the government’s goal is to participate in a market whether it is profitable or not. This is the case in many countries with government-owned airlines or radio/television stations. It’s one way to ensure that a policy is implemented. A wholesale conversion from DDR4 to DDR5 would probably be very expensive to perform, and would thus be unusual for a company that was focused on profitability. As a government-owned company, CXMT does not need to consistently turn a profit, and this was a factor in the government’s decision to suddenly switch from DDR4 to DDR5.
You can often learn a lot simply by presenting data in a certain way, and this is a technique that Objective Analysis often uses not only to understand the data ourselves, but also to help communicate that understanding to our clients. This post’s graphic is a good example of that technique. If you’d like to use such approaches to assure that your company has the bets competitive information for decision making, please reach out to us to explore ways to work together.