DDR3 technology may soon disappear. Samsung will make additional discounts to support the newer DDR4 technology. The company will make DDR3 RAM modules more expensive in the future just because of this, but the good news is that DDR4 and DDR5 products will get cheaper every month.
In last year’s reports, we knew that the DDR3 memory supply was already dwindling. This technology, whose profit margins have decreased, has been weak, so manufacturers need to use newer variants such as DDR4 and DDR5 to their advantage.
Samsung will provide additional benefits for DDR4
earlier this year Samsung and SK Hynix were the first companies to announce that they will stop DDR3 production in the coming months. In addition, companies such as Micron and private DRAM manufacturers such as Nanya Technology, Elite Semiconductor Memory Technology, Etron Technology and Winbond Electronics will also provide guarantees to their customers in this regard.
With the demand for DDR3 dwindling, Samsung is reportedly reducing production significantly even compared to last year. Industry insiders believe the Korean tech giant will stop accepting new orders for DDR3 memory by the end of this year and will finish them all by the end of 2023.
This move will mostly affect devices such as routers, wireless access points, switches, modems and stovetops, where manufacturers have used inexpensive 1GB, 2GB and 4GB DDR3 modules for years. Some low-end laptops and tablets also include these modules, but the use of DDR3 has become extremely rare in the last few years.
Samsung wants to steer its customers towards DDR4 chips by offering discounts on popular capacities like 4Gb. It’s too early to say whether this will lead to lower prices for consumers, but the overall market impact could put significant downward pressure on DRAM pricing lately.
According to market analysts at TrendForce, the industry is currently dealing with an oversupply of DRAM, and even if that means a sacrifice of up to 18 percent in terms of pricing, it’s not enough to get rid of the oversupply.
Samsung Memory sales represent more than half of its total revenue, so it makes sense to focus solely on DDR4 and DDR5 DRAM, where profit margins are higher. The company’s earnings increased in the first six months of 2022 and even reached $58.9 billion in the second quarter, but the trend is expected to reverse in the coming quarters.