DRAM and NAND flash prices are set to fall precipitously in the second half of 2022, according to an analysis by Gartner.
In a memo published last week and obtained by reporters from The Register, the firm predicts flooding of the memory chips market, as demand eases and supply take off again. It is therefore likely that there will be a significant price reduction.
However, the firm does not offer a figure for how far the prices will go down. The memo appears to be addressed to hardware makers.
What is the solution to the impending flood of chips?
The memo advises them to start designing products that demand more memory or keep memory and price the same while adding other components like better batteries, CPUs or screens, to keep the overall bill of materials costs the same while making the devices attractive to potential buyers.
Another alternative for manufacturers is to do nothing and watch how the falling prices impact their revenues.
The memo suggests letting the BOM of the equipment decline while maintaining the current price for customers and increasing margins as a result.
Do not expect chips to be cheap forever
The analyst firm did not have opinions about how this will impact the buyers. However, these falling prices could create some interesting opportunities to plan for upgrades or just ensure that suppliers pass on the lower costs for things you need in late 2022.
IDC, a rival analyst firm, has also predicted a similar outcome in the chips market, forecasting that shortages will end due to overcapacity in 2023.
Gartner described that market conditions next year are unusual, implying that cheap memory prices won’t be the new normal.