DRAM Surge Forces NVIDIA & AMD Price Hikes

According to Taiwanese media, ongoing DRAM shortages and rising memory prices are forcing global GPU leaders NVIDIA and AMD to reconsider their production strategies. Both companies are reportedly evaluating pausing the manufacture of entry-level and some mid-range graphics cards, prioritizing DRAM allocation for high-end models to reduce costs and protect profit margins. Meanwhile, AMD has informed partners of an upcoming price increase for its graphics cards, exceeding 10%.

Currently, NVIDIA, AMD, and Intel use GDDR memory for their consumer graphics cards. NVIDIA's latest RTX 50 series utilizes GDDR7 memory, offering top-tier performance, while AMD and Intel rely on GDDR6, which is slightly less powerful but more cost-efficient, enhancing value for mid-range cards.

However, rising DRAM costs have significantly increased the on-site procurement expenses for GDDR memory, impacting all three companies. To optimize profits, NVIDIA and AMD are reportedly considering halting production of some entry-level and mid-range GPUs, reserving their limited GDDR inventory for high-end products.

For NVIDIA, the affected RTX 50 series models could include the RTX 5050 and RTX 5060. The surge in memory prices may also delay the launch of new cards, such as the anticipated RTX 50 Super series. Analysts note that the rising DRAM cost now accounts for a larger share of a graphics card's total bill of materials (BOM), sharply increasing the production cost of lower-tier models and compressing profit margins. This makes continuing production of low-profit entry and mid-range cards less attractive.

Additionally, AMD has officially notified partners that its entire graphics card lineup will see a price hike of at least 10%. With this increase, AMD's latest RDNA 4-based Radeon RX 9000 series may no longer be available at its suggested retail price.