AI technologies like ChatGPT will boost the DRAM market

According to industry sources, the DRAM market is expected to recover sooner than expected with the advent of generative artificial intelligence (AI) technologies like ChatGPT. ChatGPT is a new AI chat robot tool launched on November 30th, 2022 by American AI research company OpenAI. It can quickly generate articles, stories, texts, prose, jokes and even codes as per user requirements and answer various questions when in doubt. As soon as ChatGPT was released, it caused a storm on the internet. It gained over 1 million users in less than a week after launch. Two months after launch, it has surpassed 100 million users, making it the fastest growing consumer app in history.

ChatGPT fire has sparked peer tracking. To compete with ChatGPT, Google announced it would launch a conversational chatbot called Bard. Baidu plans to launch an AI chatbot service similar to ChatGPT in March this year. But regardless of whether it is ChatGPT on OpenAI or other AI chatbots similar to ChatGPT, a large number of servers are required to keep it running. This means there will be much higher demand for GPU, DRAM and other areas.

Last year, the DRAM market was less than ideal as demand collapsed due to the gloomy global economic outlook. Previously, some research institutes predicted that the global DRAM market will be even less optimistic this year. The forecast also claims that the market size will only grow 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 is facing supply problems. This has led to price erosion and lower profits for brands. Oversupply occurs when there is more DRAM than demand. This leads to overstocking and lower prices. Price-fixing issues: Major DRAM brands have been accused of collusive pricing. This has led to billions of dollars in fines and court settlements. These allegations have also damaged the reputation of the industry and eroded customer trust. Trade Tensions: The DRAM market has been hit by trade tensions between major players like the US and China. Tariffs and other trade barriers can increase costs for brands and disrupt supply chains. Technological Advances: Demand for DRAM is highly dependent on technological advances and new applications. For example, the rise of cloud computing and AI has increased the demand for high-performance, high-capacity DRAM. However, the decline of the PC market has reduced demand for lower capacity DRAM. COVID-19 Pandemic: The COVID-19 pandemic has disrupted supply chains and reduced demand for many products, including DRAM. The pandemic has also led to increased volatility and uncertainty in the market. Others include manufacturing and supply chain issues: The production of DRAM involves complex and sophisticated manufacturing processes, and any manufacturing or supply chain issues can cause delays and disruptions. For example, natural disasters, equipment failures, and component shortages can affect production and delivery. Market “monopoly”: The DRAM market is dominated by a few large players. This can make it difficult for newcomers to compete. This “monopoly” has raised concerns about practices and reduced competition. Of course, it harms the end users. Intellectual Property Disputes: DRAM brands have also faced legal challenges related to intellectual property disputes. These disputes can lead to costly litigation and affect companies’ ability to innovate and develop new products. Environmental Considerations: Manufacturing DRAM involves the use of hazardous chemicals and generates vast amounts of waste. This has led to concerns about the environmental impact of the industry and calls for better practices. Changes in Consumer Behavior: As consumer preferences and behaviors change, so does the demand for DRAM. For example, the rise of mobile devices and wearables has increased demand for low-power DRAM. However, the demise of regular desktop computers has reduced demand for standard DRAM modules.

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