The memory shortage caused by AI has even affected DDR2 memory, and the price has increased by 60%

The demand for memory in the artificial intelligence industry is so high that all manufacturers are currently working hard to produce HBM series high-bandwidth memory with higher profit margins. Under the premise of limited production capacity, the production capacity of ordinary DDR memory will be severely reduced. Therefore, the price of DDR memory in the entire industry continues to rise, and this upward trend may not change in the short term.

Unexpectedly, even DDR2 memory is indirectly affected:

The memory shortage problem caused by AI has even affected DDR2 memory, which was first shipped in 2003. This type of memory has not been directly affected by the shortage. However, because mature nodes including DDR5/DDR4 are affected by supply, OEMs and ODMs have begun to specify the use of DDR3 as a replacement. In some scenarios with low performance requirements, DDR3 memory can still be used, and some DDR3 designs have also been redesigned to use DDR2 Memory, in fact buyers at all levels are scrambling to snap up any memory they can still find.

A report released by market research agency TrendForce stated that DDR2 memory contract prices rose by 55% to 60% in 2026Q2. The agency expects DDR2 memory prices to rise by 35% to 40% by 2026Q3, and the price of DDR2 memory is unlikely to fall again in the short term, especially since Winbond Electronics is reducing the production of DDR2 memory.

Winbond Electronics cuts production of DDR2 memory and switches to other memory:

Currently, there are two main manufacturers of DDR2 memory in the world: Winbond Electronics of Taiwan and ESMT Taiwan. Among them, Winbond Electronics is currently reducing the production of DDR2 memory in order to switch to other memories, while ESMT is expanding its DDR2 memory production capacity. For ESMT, the price of DDR2 memory continues to rise, and ESMT has basically no competitors in the DDR2 memory market.

The problem is that after Winbond Electronics shifted its DDR2 production capacity to the more profitable DDR3, DDR4 and LPDDR4, Jinghao Technology’s new DDR2 production capacity was unable to fill the market gap. This led to a tight supply of DDR2 memory more than 20 years ago. That is, the entire industry chain is now being affected, and even the prices of products equipped with DDR2 memory are rising.

DDR2 memory is mainly used in embedded devices, network equipment, industrial control equipment, automotive electronics, etc. These products will not pursue DDR3 or higher memory standards in the short term. Originally, continuing to use DDR2 can save costs without worrying about supply issues, but now the situation is also very troublesome for product manufacturers. In the end, these embedded devices will only increase in price.