According to industry sources, with the emergence of generative artificial intelligence (AI) technologies such as ChatGPT, the DRAM market is expected to recover sooner than expected. ChatGPT is a new AI chat bot tool launched by American AI research company OpenAI on November 30, 2022. It can quickly generate articles, stories, lyrics, prose, jokes and even codes according to the user needs, and answer various doubt questions. Once ChatGPT was released, it caused an internet storm. In less than a week of launch, it gained over a million users. Two months after its launch, it surpassed 100 million users, making it the fastest growing consumer app in history.
The ChatGPT fire sparked peer following. To compete with ChatGPT, Google has announced that it will launch a conversational chatbot called Bard. Baidu plans to launch an AI chatbot service similar to ChatGPT in March this year. However, whether it is ChatGPT under OpenAI or other AI chatbots similar to ChatGPT, a a large number of servers are required to maintain operation. This means that there will be a much higher demand for GPU, DRAM and other areas.
Last year, the DRAM market was less than ideal as demand slumped due to a gloomy global economic outlook. Previously, some research institutions predicted that the global DRAM market will be even less optimistic this year. The prediction also claims that the market size will only increase by 8.3%. This is the first time in history that it will be below 10%.
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DRAM market issues
Over the years, the DRAM market has faced many problems. Below we highlight some of these issues
- Oversupply: The DRAM market has been facing supply issues. This has led to lower prices and reduced profits for brands. Oversupply occurs when there are more DRAMs than demand. This leads to excess inventory and lower prices.
- Pricing issues: Major DRAM brands have been accused of colluding to fix prices. This resulted in billions of dollars in fines and legal settlements. These allegations have also damaged the reputation of the industry and eroded customer confidence.
- Trade tensions: The DRAM market has been affected by trade tensions between major players such as the United States and China. Tariffs and other trade barriers can increase costs for brands and disrupt supply chains.
- Technological advancements: The demand for DRAM is highly dependent on technological advancements and new applications. For example, the rise of cloud computing and AI has increased the demand for high-capacity, high-performance DRAM. However, the decline of the PC market reduced the demand for lower capacity DRAMs.
- COVID-19 pandemic: The COVID-19 pandemic has disrupted supply chains and reduced demand for many products, including DRAMs. The pandemic has also brought increased volatility and uncertainty to the market.
Others include
- Production and supply chain issues: DRAM production involves complex and sophisticated manufacturing processes, and any production or supply chain issues can cause delays and disruptions. For example, natural disasters, equipment failures, and component shortages can all impact production and supply.
- Market “monopoly”: The DRAM market is dominated by a few large players. This can make it difficult for new entrants to compete. This “monopoly” has raised concerns about practices and reduced competition. Of course, this hurts end users.
- Intellectual property disputes: DRAM’s brands have also faced legal challenges related to intellectual property disputes. These disputes can lead to costly legal battles and impact companies’ ability to innovate and develop new products.
- Environmental Concerns: Manufacturing DRAMs involves the use of hazardous chemicals and generates huge amounts of waste. This has prompted concerns about the industry’s environmental impact and calls for better practices.
- Changes in consumer behavior: As consumer preferences and behaviors change, so does the demand for DRAMs. For example, the rise of mobile devices and wearable technologies has increased the demand for low-power DRAMs. However, the decline of the ordinary desktop computer has reduced the demand for standard DRAM modules.