Prices for PC DRAM chips–the chips that are used in (SO)DIMM memory modules for desktops, laptops, and servers–have fallen by 30% for Q1 2019, the sharpest decline in a single quarter since 2011, according to DRAMeXchange. Though a decline was anticipated, original estimates put it at a less-drastic 25% for the quarter.

DRAMeXchange indicates that supply contracts are presently agreed-to on a monthly–rather than quarterly–basis due to market conditions, with DRAM suppliers “holding around a whopping six weeks’ worth of inventory,” including wafer banks. The oversupply of DRAM is attributed to supply shortages of Intel CPUs, which they claim is expected to continue through the end of Q3 2019, reducing demand from PC OEMs as their orders have decreased due to component shortages, resulting in what DRAMeXchange characterizes as “overall market… freefall.”

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Intel’s troubled transition to a 10nm manufacturing process is a primary factor in the CPU shortage, leading to speculation in late 2018 that Intel planned to skip directly from 14nm to 7nm processes. These rumors were ultimately untrue, as Intel formally introduced the 10nm Ice Lake family at CES 2019, which it characterizes as their “first volume 10nm PC processor.” Intel’s first 10nm design, Cannon Lake, was used in Chinese variants of the Lenovo IdeaPad 330, and in low-end versions of Intel’s Next Unit of Computing small form factor (SFF) PCs.

A combination of low yields and transitioning fabrication plans to new processes–as well as Intel’s focus on building more server-class CPUs than desktop or notebook CPUs–worsened the supply situation. Intel is attempting to alleviate supply constraints by offering strangely binned products, such as the Pentium Gold G5600F–the existence of which leaked by UK parts supplier Kikatek–a low-end CPU lacking an integrated GPU.

This follows the announcement of F-variant Intel Core CPUs, which similarly lack integrated GPUs, and are not offered at a lower price than their full-featured variants. (Of note, the GPU circuitry is simply fused at the factory, allowing Intel to sell processors with working CPU cores with GPU cores that do not pass QA testing.)

How will this affect prices of RAM modules in stores?

The obvious answer is things are going to become cheaper. The effect will be more pronounced on mainstream product and speed classes–it stands to reason that high quantities of 8GB DDR4 DIMM (or SODIMM) modules are produced, so an oversupply is more likely to occur for those parts.

Price drops are already being seen on high-end parts, however. Presently, SuperBiiz is offering a 32GB DDR4 SODIMM module for $224, a significant discount compared to the $300-$450 price per module it commanded late last year. 32GB SODIMM modules are sought after components for users of SFF PCs, like the 2018 Mac Mini, which has only two SODIMM slots on board. While it’s possible to upgrade a 2018 Mac mini’s RAM, it isn’t easy, ZDNet’s David Gewirtz noted.

Specialized products like 16GB DDR3 SODIMM modules are not as likely to see significant discounts. These saw very limited production runs to begin with, and Intel’s implementation of the JEDEC DDR3 specification in previous generation processors did not account for high density modules. Though many Intel Core processors support DDR3, this limitation constrains it to use only on Skylake (6000-series) or Broadwell (5000-series) processors.

What cascading effects will this have for IT equipment?

Manufacturers are already adding more RAM to devices launching soon, with specialty equipment manufacturer GPD opting to increase the RAM in the GPD MicroPC, though with the caveat that buyers who had previously pre-ordered must pay an additional $10 to cover the difference.

This price drop also reflects, in part, a market correction. A class-action lawsuit was filed in May 2018 against Samsung, Hynix, and Micron over allegations of DRAM price fixing. Hagens Berman, the law firm which filed the suit, indicates that revenues for the trio of manufacturers doubled between Q1 2016 and Q3 2017, with a 47% increase in 2017, the largest in 30 years.