Ram memory makers plan to cut production in 2019

While desktop DDR4 RAM seems to come from a bunch of brands like Crucial, Corsair, G.Skill, Kingston, and many others, only a handful of manufacturers actually make their own chips.

Micron, SK Hynix and Samsung will reduce the stock of DDR4 RAM so that prices do not drop too low

Micron, SK Hynix and Samsung are the big three that really influence memory prices as they have gradually absorbed most of the smaller chip makers. According to the latest TrendForce report, these RAM manufacturers are slashing production even more than expected in 2019. Following the shortage of Intel CPUs and the general weakness of market demand, the manufacturers allegedly want to prevent the Prices go down to keep profit margins high. However, Trendforce still expects memory prices to drop around 15% in the first quarter of 2019, less than 10% in the second quarter of 2019, and around 5% already in the second half.

This means that the reduction in the production of RAM memories will not stop the fall in the prices of memory modules of this type, but will only make it not fall as fast.

Manufacturers want to preserve their profit margins

Manufacturers have tried to adjust their production plans and reduce stock to avoid price competition. In terms of profitability, Samsung and SK Hynix's DRAM gross production margins are still almost 80%, while Micron's are still over 60%. With such high margins, it's reasonable for manufacturers to be conservative in their 2019 production prospects.

Naturally, this is a benefit for manufacturers, but not so much for buyers. Still, we expect memory module prices to drop in 2019 as planned.

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