Memory Crisis Hits Hard: Router Industry Affected as Set-Top Box DRAM Prices Soar 7x

The ongoing DRAM shortage, initially anticipated to predominantly impact smartphones and PCs, has now extended its reach to networking devices such as routers. Recent insights indicate that manufacturers of networking equipment lacking a reliable supply chain or adequate negotiating leverage are facing significant challenges. Driven by an escalating demand for memory in the AI server sector, both DRAM and NAND flash prices have surged by over 600%.Consequently, if you’re considering upgrading your home or office network, the time to act is now.

DRAM Costs in Low-to-Mid-Tier Routers Have Skyrocketed

According to a recent analysis by Counterpoint Research, the composition of the Bill of Materials (BOM) for low-to-mid-range routers has dramatically changed. Currently, around 20% of these routers’ BOM costs are attributed to DRAM, a substantial increase from just 3% one year ago. The research highlights that while the price of smartphone DRAM has tripled, the memory utilized in broadband products has seen an alarming increase of nearly seven times.

This disparity in price hikes may be attributed to the lower shipping volumes of routers compared to smartphones, coupled with the weaker supply chain positions of some router manufacturers. This situation forces these companies to incur greater expenses when securing the necessary memory components.

“While the difficulties being faced by the PC and lower-end smartphone industries with ‘mobile memory’ are now well known, other consumer products like routers, gateways and set-top boxes are affected the most, going by the monthly trends since last year. Over the last nine months, smartphone memory prices jumped 3x, but the prices for ‘consumer memory’-based broadband products jumped almost 7x.

Routers are hit the hardest, especially for OEMs with an unsecured supply and weaker negotiating power. Memory is now contributing more than 20% of the total bill of materials (BOM) in low-to-mid-end routers, up from around 3% exactly a year ago, according to Counterpoint’s Teardown and BOM Analysis Service.”

As the leading player in the U. S.router market, TP-Link has yet to announce whether consumers will see price increases. However, Counterpoint Research emphasizes that telecommunications companies should monitor these trends closely to make any necessary pricing adjustments.

For further reading, you can visit Counterpoint Research for detailed insights.

Source & Images: Wccftech