Inflation Impacts Demand for Consumer Electronics, 2022 DRAM Module Makers' Revenues Fall 4.6%

[TheLostSwede]

TrendForce reports that consumer appetite for electronic products took a hit from high inflation, with global DRAM module sales in 2022 reaching US$17.3 billion—a 4.6% YoY decline. Revenue performance varied significantly among module makers due to the different domains they supply.

TrendForce's data indicated that the top five memory suppliers in 2022 accounted for 90% of total sales, with the top ten collectively capturing 96% of global market revenue. Kingston maintained its dominant market share of 78%. Even with a slight revenue dip, it held steadfast to its position as the global leader. Despite poor end-market demand, Kingston's robust brand scale, along with its comprehensive product supply chain, limited its revenue decline to a modest 5.3%, keeping it firmly at the top of market share rankings.




Revenue performances diverged among module manufacturers due to different brand strategies
Raxamel, ranking second, pulled off an impressive feat by experiencing nearly 90% growth in 2022. However, a deeper look reveals that this surge is largely attributed to a significant decline in 2021, creating a low comparison base. Excluding 2021, its revenue trends reasonably when compared with previous years. Ramaxel achieved substantial gains in the server domain last year and received validation from server OEM clients, also exhibiting steady supply growth in the PC OEM segment. These factors contributed to its revenue growth in 2022, aligning with the company's operational achievements.

ADATA—focusing mainly on consumer products—also ventured into high-margin products in industrial control, automotive, and e-sports last year, but their current low proportion made it hard to withstand the impacts of global demand shrinkage, leading to a 10% revenue decline and third place.

POWEV, buoyed by its brand's success in the e-sports market and a diverse channel sales model, saw its revenue grow by 12.7%, landing it the fourth spot. Despite Kimtigo's proactive product development and global expansion, it couldn't overcome the slide in consumer electronics spending, resulting in a revenue decline, and its revenue ranking slightly rose to fifth in 2022.

SMART Modular, primarily serving the industrial control market, faced challenges due to inflation, leading to constrained corporate procurement budgets and decreased demand. Consequently, its revenue fell by 16.1%, placing it sixth. Patriot Memory, making a comeback on the list, aggressively expanded new ventures and responded to national project demands in 2022, pushing its revenue up by 15.1% and achieving the seventh rank.

Revenue contributions remain limited in the early growth stages of new applications; revenues plunge by over 15% amid the global economic downturn
Innodisk, advancing from ninth to eighth, relied on its strong foundation in industrial application development, extending its efforts to industrial AIoT-related applications. Yet, as this field is still nascent, it struggled against the downward trend in demand for its core industrial control products, leading to a 17.8% fall in revenue.

Team Group was impacted by channel inventory depletion in 2H22 and witnessed a stark demand decrease and a 21.4% annual revenue reduction, dropping it to ninth place. However, the active promotion of its e-sports brand targeting niche markets suggests potential revenue growth if computer-related demands rebound. Apacer, positioned at tenth, faced the global economic slump, with weakening end-sale forces in the latter half of 2022 and more conservative customer orders, resulting in a 16.6% revenue downturn.

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[TechHalp]

They blame this on inflation and not the insanely high prices of DDR5, or the fact that anyone who was going to buy new RAM did it when the last gen of CPU's launched, and gaming PC's not being reasonably priced for years and years

 

[Vayra86]

They blame this on inflation and not the insanely high prices of DDR5, or the fact that anyone who was going to buy new RAM did it when the last gen of CPU's launched, and gaming PC's not being reasonably priced for years and years

The DIY market is tiny. The vast majority of DRAM is found in AIO, mobile, server, etc.

 

[TechHalp]

The DIY market is tiny. The vast majority of DRAM is found in AIO, mobile, server, etc.

And somehow that means that DDR5 isn't extremely expensive and not cost efficient?

 

[Vayra86]

And somehow that means that DDR5 isn't extremely expensive and not cost efficient?

Of course not, but these numbers are about a whole lot more than those aspects, in the end people just need to upgrade and they buy a system, that contains RAM. They don't even see DDR5 pricing.

 

[TheLostSwede]

They blame this on inflation and not the insanely high prices of DDR5, or the fact that anyone who was going to buy new RAM did it when the last gen of CPU's launched, and gaming PC's not being reasonably priced for years and years

Insanely high prices? When did you last check the cost of DDR5? Or DDR4 for that matter?
DDR4 is going up slowly in price, whereas DDR5 has never been cheaper. The difference for a 32 GB kit is at most $10-15 and that's comparing comparing DDR4 3600 to DDR5 6000.
Admittedly this is looking back at 2022 pricing and yes, there was a much bigger gap back then and DDR5 wasn't really a great buy in 2022, but now it's not going to matter much.

 

[TechHalp]

Of course not, but these numbers are about a whole lot more than those aspects, in the end people just need to upgrade and they buy a system, that contains RAM. They don't even see DDR5 pricing.

You really think everyone is so stupid huh.

Nah, the vast majority of people can READ A PRICE TAG. And when they see a PC that used to cost $1000 now costs $1500 they are less likely to buy it. They don't have to know why it's expensive, they don't have to know it's because of DDR5, because that does not change the PRICE TAG.

"In December 2022, 15% of AMD chips sold by the retailer were Zen 4/Ryzen 7000 (Raphael) processors, 13% were Zen 3/Ryzen 5000G (Cezanne), and 71% were Zen 3/Ryzen 5000 (Vermeer). That means that as much as 84% of Mindfactory's total AMD sales came from Zen 3 chips. Jan 3, 2023"

Admittedly this is looking back at 2022 pricing and yes, there was a much bigger gap back then and DDR5 wasn't really a great buy in 2022, but now it's not going to matter much.

Why are you even commenting when you just admit you are wrong at the end of your comment. We are talking about the state of DDR5 in 2022, on an article about the sales of DDR5 in 2022. Why would you be bringing up 'well now it's cheaper', wow you don't say! Stop making up imaginary arguments and putting words in my mouth so you can feel like you corrected me about something.

 

[Vayra86]

You really think everyone is so stupid huh.

Nah, the vast majority of people can READ A PRICE TAG. And when they see a PC that used to cost $1000 now costs $1500 they are less likely to buy it. They don't have to know why it's expensive, they don't have to know it's because of DDR5, because that does not change the PRICE TAG.

So, translation, people are not willing to pay the price for the product, which could be anything between inflation, pricing, upgrade cycles... This is much more than just pricing and inflation is certainly a large part of the deal.

You mention Ryzen, well, for lots of people a generation older is a lot cheaper - that is indeed a pricing aspect - but it is as much an aspect of inflation, because people are getting more bang for buck parts. The performance gap isn't huge and for many its not even noticeable. Without inflation, people would probably be much more inclined to get the latest greatest, less influenced by pricing.

 

[TechHalp]

So, translation, people are not willing to pay the price for the product, which could be anything between inflation, pricing, upgrade cycles... This is much more than just pricing and inflation is certainly a large part of the deal.

You mention Ryzen, well, for lots of people a generation older is a lot cheaper - that is indeed a pricing aspect - but it is as much an aspect of inflation, because people are getting more bang for buck parts. The performance gap isn't huge and for many its not even noticeable. Without inflation, people would probably be much more inclined to get the latest greatest, less influenced by pricing.

Inflation was 6%, give me a break with that. I took economics, that's not gonna work. You have no idea how ignorant this comes off.

If you knew what inflation was, you'd know it increases revenue. A company doing -4% in a period of high inflation is even worse than doing -4% with no inflation at all.

 

[Denver]

Well, If you examine the prices at which manufacturers sell chips to these third parties who then sell RAM modules, it's difficult to comprehend why DDR5 remains so expensive, or how prices escalate so dramatically at different points in the supply chain. Manufacturers are incurring losses, while these third parties should be reaping substantial profits.

Inflation doesn't operate uniformly across all sectors. The semiconductor industry experienced an inflationary impact many times greater than the average, primarily due to the fact that Moore's Law is no longer effective. Achieving 30-40% more density now costs 80-90% more in the transition from 7nm to 5nm. Not too long ago, you could attain nearly double the density for only a 20-30% increase in the cost per wafer.

 

[TechHalp]

Well, If you examine the prices at which manufacturers sell chips to these third parties who then sell RAM modules, it's difficult to comprehend why DDR5 remains so expensive, or how prices escalate so dramatically at different points in the supply chain. Manufacturers are incurring losses, while these third parties should be reaping substantial profits.

Thank you, finally an honest comment with some nuance. I think the reason DDR5 remains so expensive is because they can keep blaming inflation for high costs while simultaneously milking customers dry who don't understand what inflation is. Raise prices 10-20% while inflation was around 6%, blame inflation for that entire thing. That wasn't meant to be cheeky, it's what is happening.

Pretty much across the board every tech company overextended during covid and then had to fire a large % of their workforce, it was a gross lack of oversight. Most of them made all time high record profits while claiming it was hard times

And who could have possibly forseen that the end of the stay at home pandemic would result in less computer part sales. Shocking.

 

[Bwaze]

How come profits aten't skyrocketing due to AI demand?

 

[TechHalp]

How come profits aten't skyrocketing due to AI demand?

AI needs vram not ram

 

[TheinsanegamerN]

Inflation was 6%, give me a break with that. I took economics, that's not gonna work. You have no idea how ignorant this comes off.

If you knew what inflation was, you'd know it increases revenue. A company doing -4% in a period of high inflation is even worse than doing -4% with no inflation at all.

If you took economics, you'd know that when inflation hits, consumer spending often decreases on luxury items.

You'd also know that inflation was more then 6%.

 

[Vayra86]

Inflation was 6%, give me a break with that. I took economics, that's not gonna work. You have no idea how ignorant this comes off.

If you knew what inflation was, you'd know it increases revenue. A company doing -4% in a period of high inflation is even worse than doing -4% with no inflation at all.

I'm not even disagreeing with you entirely, what are you on about wrt ignorance and 'how stupid I think people are'?

Not exactly the tone of voice I prefer. Tone it down
Inflation wasn't 6%. It varies depending on numerous factors, while consumer electronics are most definitely a luxury item, which means: highly elastic.

Pretty much across the board every tech company overextended during covid and then had to fire a large % of their workforce, it was a gross lack of oversight. Most of them made all time high record profits while claiming it was hard times

And who could have possibly forseen that the end of the stay at home pandemic would result in less computer part sales. Shocking.

These two arguments are not pricing related. They're related to other economic factors, as well. Which is exactly what I'm saying since the beginning ('upgrade cycles' for example). Fired workforce isn't exactly in a position to be buying products either for example, and the workforce being fired is tech-oriented on top of that. Thanks for concluding with me that we're both right after all. Next time leave the personal attacks at the door. Its not the first time either.

 

[TechHalp]

I'm not even disagreeing with you entirely, what are you on about wrt ignorance and 'how stupid I think people are'?

Not exactly the tone of voice I prefer. Tone it down
Inflation wasn't 6%. It varies depending on numerous factors, while consumer electronics are most definitely a luxury item, which means: highly elastic.


These two arguments are not pricing related. They're related to other economic factors, as well. Which is exactly what I'm saying since the beginning ('upgrade cycles' for example). Fired workforce isn't exactly in a position to be buying products either for example, and the workforce being fired is tech-oriented on top of that. Thanks for concluding with me that we're both right after all. Next time leave the personal attacks at the door. Its not the first time either.

"in the end people just need to upgrade and they buy a system, that contains RAM. They don't even see DDR5 pricing."

Translation, normies dumb literally can't tell when 1 number is bigger than another number. They are so dumb to you, they can't comprehend price.

Telling me YoY revenue isn't pricing related. lol.

If you took economics, you'd know that when inflation hits, consumer spending often decreases on luxury items.

You'd also know that inflation was more then 6%.

Yes, that's literally a recession, and we aren't in one.

If DDR5 ram and motherboards weren't so overpriced, the 7000 series sales wouldn't be completely dwarfed by the 5000 series in 2022 and 2023. It's that simple. Not only that, they lost to intel 13th gen in sales numbers, because raptor lake supports DDR4.

Imagine that. People didn't want to pay hundreds for RAM and don't think $250 for a basic motherboard is reasonable? What a shocker. Who could have possibly thought, with thousands of people complaining about the price of AM5 mobos and ram, that it led to poor sales.

Inflation means nothing compared to literal DOUBLING of price in basic components that offer little to no noticeable performance gains.