It almost certainly is. Once people get used to the higher prices, and the companies see that the units sell anyway, there is no meaningful incentive to lower costs again.
This has played out time and time again during every other supply-side shock. Once prices go up, they don't come back down.
That's not true. We've seen prices from supply shock go back down (the increase in hard drive prices when there were floods in Asia 10-15 years ago comes to mind as an example). It does take a while, but it will happen eventually.
Even then, prices stayed elevated for years. They never went back to pre-supply shock prices. Right around that time too the industry consolidated. WD bought Hitachi, Seagate bought Samsung's HDD business. It left a duopoly, so now there was no competitive pressure for a price war. Prices got locked in higher than pre-flood levels, intentionally.
For the current DRAM situation, I can almost promise we'll never see $60-$90 RAM again. Maybe, 32GB won't cost you $500 eventually, but it'll cost you $250-$350 instead of $500. If the market can bear it, why would anyone get into a price war that's just a race to the bottom where no one wins?
It's also because television producers found alternative revenue streams that allow them to sell the TVs for less while still making more. If you look for a TV without all of the adware/bloatware/spyware you can see the true cost of a TV in 2026.
For the eggs I buy, they are currently $7.99/dozen. Cheapest in my store is $5.99/dozen.
That doesn't disprove my point though. Prices are still higher as a baseline than before the supply side shock. Prices raise to a "new normal" and consumers adapt, removing pressure to lower back down to pre-shock levels.
wholesale egg prices have actually plummeted, yet retail prices have only drifted slowly downward incrementally, and have not reached the previous baseline. Its asymmetric price transmission, and its a documented economic phenomenon. "Prices go up like rockets, and fall like feathers"
Eggs in USA literally hit a ten year low a few months ago. I don't know where you live, probably SF or something, but a dozen eggs here is under 3 dollars.
You have evidence that they are going to go down? Not unless government policy steps in to pressure chip makers, or establish new markets. Corporations will use inflation, ai, et al to validate their record profits at the cost of the consumer. Monopolies or better put the mergers of companies over the last 40 years hasn’t lead to cheaper prices, it never was going to either.
Can you point to an example of this happening in the past? Where a supply shortage leads to price increases and "record profits", and the price never goes back down?
There's a lot of money behind AI to try to make fetch happen but every attempt to capture the real cost of running these models has driven home to people that we're still deep in the "burn money to acquire customers" phase before the "start charging people gobs of money to make a profit" turn. All the stories of companies burning through their whole year of AI budget in the recent move from subscription to usage based billing is a big example.
If that bubble pops like it seems to be threatening to do memory prices could drop back to their old levels give or take some sticky inflation.
Good point. But only a few companies create these things. They can jack up the price and there is nothing we can do. Is there a mom and pop shop making memory yet? Nope, centralized power of commerce is a threat.
I think the point is that "only a few companies create these things" has always been true.
You need to provide a compelling argument why it is different this time.
The counter-argument is pretty basic:
RAM companies are currently selling as much as they can at high prices. This leads to investment in building new factories.
At some point the supply of new RAM will match the demand for it. When that occurs companies can increase profit by cutting prices to gain market share.
What's more, all the RAM companies have slightly different estimates of what the demand is. This leads to different levels of investment in new factories. Some will over-invest in new factories and the only way they can make their investment back is by increasing market share.
The final factor is new entries in the market. Chinese RAM manufactures can already produce DDR4 RAM (but only small amounts of DDR5). They can both increase supply of DDR4 RAM and are aggressively chasing DDR5 capabilities.
TL;DR: The profit motive is too strong for companies to artificially keep prices high once demand drops.
Suppose you have a warehouse full of widgets. You bought them them for $450 each, and sell them for $500. You're really happy with this profit, and you can just keep selling them at $500...forever, right?
But then, I get my own warehouse and fill it with widgets that I bought at $400 each because I entered under better market conditions. And I really want to sell these widgets -- they aren't making me any money when they just sit there taking up space and burning rent.
So I price these widgets at $475, to attract customers. It works; the widgets are flying off the shelves. And they're being purchased by people who used to be your customers, and I'm making even more money per-unit than you are.
What's your next move? Do you want to keep losing customers to me, or do you want to adjust your price to be more competitive?
Price wars are a race to the bottom that everyone loses. In reality, such oligopolies follow a kinked demand curve.
A new entrant isn't guaranteed to now price at $475. They'll see the incumbent being successful at $500. Now they price at $499 rather than trigger a destructive price war. Companies collude on this quite frequently. When everyone keeps their prices high, all get to enjoy the big margins.
Outside of that, ok so you have a warehouse full of widgets you need to move fast. So you undercut, and sell out. If demand is still bigger than your supply, you're now out of capacity, customers are going back to buying for $500 from your competitor. That means you've mispriced your limited inventory, so now you raise your prices up to closer to $500 because it helps you control your capacity, and also you know the market can clearly bear it.
Anyway, those are obviously overly simplified scenarios prices rarely fall down dramatically because of tacit collusion. Its asymmetric price transmission ("Prices go up like rockets, but fall like feathers")
Some lose more, i.e. PRC manufacturers well incentivized to involute to drive competitors out of business. $500 for 10% marketshare is less than 100$ for 60%. Of course PRC being spoiler, at least under current geopolitics where they have less reason to align with existing memory cartel.
People keep claiming this but it isn't true. The subsidy from advertising is very low:
> They make about $20 per user annually and, assuming an active TV service life of five years, yield about $100 over the lifecycle of a main viewing room TV.
I don’t have data for how much tvs are currently subsidized. But you can just look at the inflation adjusted price of TVs from say 1980 to 2010 and see the drop without worrying about adjusting for advertising and spyware subsidies.
You can also look at computer monitors (which don’t have advertising and spyware) and see an enormous price drop.
It almost certainly is. Once people get used to the higher prices, and the companies see that the units sell anyway, there is no meaningful incentive to lower costs again.
This has played out time and time again during every other supply-side shock. Once prices go up, they don't come back down.
That's not true. We've seen prices from supply shock go back down (the increase in hard drive prices when there were floods in Asia 10-15 years ago comes to mind as an example). It does take a while, but it will happen eventually.
Even then, prices stayed elevated for years. They never went back to pre-supply shock prices. Right around that time too the industry consolidated. WD bought Hitachi, Seagate bought Samsung's HDD business. It left a duopoly, so now there was no competitive pressure for a price war. Prices got locked in higher than pre-flood levels, intentionally.
For the current DRAM situation, I can almost promise we'll never see $60-$90 RAM again. Maybe, 32GB won't cost you $500 eventually, but it'll cost you $250-$350 instead of $500. If the market can bear it, why would anyone get into a price war that's just a race to the bottom where no one wins?
> They never went back to pre-supply shock prices.
What do you mean?
2011: 2 TB HDD for $79.99 ($0.0000400 / MB).
2012: 2 TB HDD for $157.27 ($0.0000786 / MB).
2014: 4 TB HDD for $109 ($0.0000367 / MB)
2024: 8 TB HDD for $111.98 ($0.0000140 / MB)
https://web.archive.org/web/20250318110739/http://jcmit.net/...
https://www.thecpuguide.com/pc/disk-price-history-hdd-ssd-pr...
China
Televisions literally feel in price every year for 40 years.
That's like the one outlier in a sea of slow price increases over time.
It's also because television producers found alternative revenue streams that allow them to sell the TVs for less while still making more. If you look for a TV without all of the adware/bloatware/spyware you can see the true cost of a TV in 2026.
This was a thing before those axes you're grinding even existed.
They are one of the few tech segments that is still doing so, and that’s mainly down to “smart” TVs being able to get revenue in other ways.
How much are a dozen eggs at your local store? Curious to stress test your theory. I assume they're at least $10/dozen?
For the eggs I buy, they are currently $7.99/dozen. Cheapest in my store is $5.99/dozen.
That doesn't disprove my point though. Prices are still higher as a baseline than before the supply side shock. Prices raise to a "new normal" and consumers adapt, removing pressure to lower back down to pre-shock levels.
wholesale egg prices have actually plummeted, yet retail prices have only drifted slowly downward incrementally, and have not reached the previous baseline. Its asymmetric price transmission, and its a documented economic phenomenon. "Prices go up like rockets, and fall like feathers"
Some data suggests that eggs averaged $2.19 per dozen, at retail, in May of 2026: https://fred.stlouisfed.org/series/APU0000708111
Looking at the chart, it seems to be the case that every sharp increase in price has been followed by a sharp decrease in price.
Just for fun, here's the same chart adjusted for inflation: https://fred.stlouisfed.org/graph/?g=1WXWZ
Eggs in USA literally hit a ten year low a few months ago. I don't know where you live, probably SF or something, but a dozen eggs here is under 3 dollars.
Just another step into the direction of global Brazilification.
You have evidence that they are going to go down? Not unless government policy steps in to pressure chip makers, or establish new markets. Corporations will use inflation, ai, et al to validate their record profits at the cost of the consumer. Monopolies or better put the mergers of companies over the last 40 years hasn’t lead to cheaper prices, it never was going to either.
Prices will continue to go up.
If it goes on long enough new manufacturers will eventually spin up and sell RAM cheaper.
Can you point to an example of this happening in the past? Where a supply shortage leads to price increases and "record profits", and the price never goes back down?
GPUs?
Though that’s kind of cheating considering it’s basically a monopoly at this point
There's a lot of money behind AI to try to make fetch happen but every attempt to capture the real cost of running these models has driven home to people that we're still deep in the "burn money to acquire customers" phase before the "start charging people gobs of money to make a profit" turn. All the stories of companies burning through their whole year of AI budget in the recent move from subscription to usage based billing is a big example.
If that bubble pops like it seems to be threatening to do memory prices could drop back to their old levels give or take some sticky inflation.
>Monopolies or better put the mergers of companies over the last 40 years hasn’t lead to cheaper prices,
Can you explain this chart?
https://ourworldindata.org/grapher/historical-cost-of-comput...
Good point. But only a few companies create these things. They can jack up the price and there is nothing we can do. Is there a mom and pop shop making memory yet? Nope, centralized power of commerce is a threat.
I think the point is that "only a few companies create these things" has always been true.
You need to provide a compelling argument why it is different this time.
The counter-argument is pretty basic:
RAM companies are currently selling as much as they can at high prices. This leads to investment in building new factories.
At some point the supply of new RAM will match the demand for it. When that occurs companies can increase profit by cutting prices to gain market share.
What's more, all the RAM companies have slightly different estimates of what the demand is. This leads to different levels of investment in new factories. Some will over-invest in new factories and the only way they can make their investment back is by increasing market share.
The final factor is new entries in the market. Chinese RAM manufactures can already produce DDR4 RAM (but only small amounts of DDR5). They can both increase supply of DDR4 RAM and are aggressively chasing DDR5 capabilities.
TL;DR: The profit motive is too strong for companies to artificially keep prices high once demand drops.
But why would they invest in more factories if they also think it's a temporary hickup?
Then it's just the same capacity, but without huge buyers. Still the prices won't come down...
If they built new factories now, they would just lose money to an investment that would not pay off.
(Of course under the premise that AI collapses or is saturated at some point. If that doesn't hold true then ex falso quodlibet!)
> But why would they invest in more factories if they also think it's a temporary hickup?
Because they have orderbooks 2 years (at least) into the future so know what demand is there - and they are demanding deposits for future orders.
It's easy to see if this is true. Look for news on new factories opening:
Micron: https://finance.yahoo.com/technology/ai/articles/micron-mu-p...
Samsung: https://www.kedglobal.com/korean-chipmakers/newsView/ked2026... (note this is doubling Samsung's memory production)
SK Hynix: https://finance.yahoo.com/sectors/technology/articles/sk-hyn...
Yes, 2 years.
How long does building a factory take?
If the demand grows with their production they can sell more units at the same price.
If demand goes down by a certain percentage, they sell more for less + they lost the investment into new factories.
It all is based on IFs and about personality, about "optimism" vs "pessimism"
I for one think that the AI bubble will "burst" at some point and I think that then there will be a lot of hardware to go by.
Time will be the judge of my abilities to replace the Oracle of Delphi.
You really think the manufacturers or retailers will lower the prices now that people are used to the new normal? How often do you see that happen?
Yes, I really do think that.
Suppose you have a warehouse full of widgets. You bought them them for $450 each, and sell them for $500. You're really happy with this profit, and you can just keep selling them at $500...forever, right?
But then, I get my own warehouse and fill it with widgets that I bought at $400 each because I entered under better market conditions. And I really want to sell these widgets -- they aren't making me any money when they just sit there taking up space and burning rent.
So I price these widgets at $475, to attract customers. It works; the widgets are flying off the shelves. And they're being purchased by people who used to be your customers, and I'm making even more money per-unit than you are.
What's your next move? Do you want to keep losing customers to me, or do you want to adjust your price to be more competitive?
Price wars are a race to the bottom that everyone loses. In reality, such oligopolies follow a kinked demand curve.
A new entrant isn't guaranteed to now price at $475. They'll see the incumbent being successful at $500. Now they price at $499 rather than trigger a destructive price war. Companies collude on this quite frequently. When everyone keeps their prices high, all get to enjoy the big margins.
Outside of that, ok so you have a warehouse full of widgets you need to move fast. So you undercut, and sell out. If demand is still bigger than your supply, you're now out of capacity, customers are going back to buying for $500 from your competitor. That means you've mispriced your limited inventory, so now you raise your prices up to closer to $500 because it helps you control your capacity, and also you know the market can clearly bear it.
Anyway, those are obviously overly simplified scenarios prices rarely fall down dramatically because of tacit collusion. Its asymmetric price transmission ("Prices go up like rockets, but fall like feathers")
Some lose more, i.e. PRC manufacturers well incentivized to involute to drive competitors out of business. $500 for 10% marketshare is less than 100$ for 60%. Of course PRC being spoiler, at least under current geopolitics where they have less reason to align with existing memory cartel.
SSD prices in 2018. GPU prices after the first crypto crash in 2018 and again after the Ethereum merge in 2022. The AMD Zen disruption of 2017.
Retailers are mostly free to offer things at whatever prices they want. But the market has more power than you may think to correct it.
It happens all the time. For a recent example, see Windows midrange laptop pricing since the MacBook Neo was introduced, despite the RAM crisis.
Yes. Absolutely. They will move more units and make more profit overall, and if they don't do it a competitor will.
Look at TV prices over the last 20 years.
TV is heavily subsidized from data collection and ads, not sure it's a perfect comparison
People keep claiming this but it isn't true. The subsidy from advertising is very low:
> They make about $20 per user annually and, assuming an active TV service life of five years, yield about $100 over the lifecycle of a main viewing room TV.
https://omdia.tech.informa.com/om030986/in-the-smart-tv-indu...
Look at monitor price drops (comparing the same tech). Same price drop curve.
Prices have fallen far more than profit from data sale provides, so it's easy to view as a good enough comparison.
Do we have data on that either way? I’m genuinely asking, not snarking: I tried to look it up a while ago but couldn’t find as much as I hoped
I don’t have data for how much tvs are currently subsidized. But you can just look at the inflation adjusted price of TVs from say 1980 to 2010 and see the drop without worrying about adjusting for advertising and spyware subsidies.
You can also look at computer monitors (which don’t have advertising and spyware) and see an enormous price drop.
Edit: I found this which estimates you can make about $100 in ads and data collection over the lifetime of a TV https://omdia.tech.informa.com/om030986/in-the-smart-tv-indu...
but monitors are not showing the same trend...