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Memory chips are now more expensive than compute chips on a per-area basis — AI demand drives DRAM die value past leading-edge silicon But there is a catch. Memory prices are at record highs due to demand from the AI sector and are not going to drop any time soon. In fact, the cost of manufacturing memory chips on a per-area basis can be higher than the price of silicon processed using TSMC's N2 and N3 fabrication technologies, which are used to make compute chips, according to an observation made by Kurnal Insights. While the comparison has merit, it has an important caveat. Based on media leaks, Kurnal from Kurnal Insights considers that a 300-mm wafer processed using TSMC's N3 technology costs $20,000, which translates to approximately $0.283 per mm² when the wafer price is divided by its area. For TSMC's N2, the analyst assumes a considerably higher wafer price of $30,000, or around $0.424/mm². These calculations are based on unofficial information and do not account for unusable wafer edges, dicing, test structures, defects, or yield, so they should be viewed as nominal wafer-area prices rather than the actual price of usable silicon. The calculation for DRAM works differently. Kurnal assumes a DRAM price of $1.50 per Gb and then multiplies it by the bit density of different generations. At 0.219 Gb/mm², 1y DRAM works out to $0.329/mm², whereas 1z DRAM with its 0.273 Gb/mm² density reaches $0.410/mm². Finally, 1b DRAM at 0.436 Gb/mm² produces a figure of $0.654/mm², considerably higher than the nominal $0.424/mm² calculated for an N2 wafer. There is an important distinction here. The N2 and N3 numbers represent assumed prices charged by TSMC for processing a wafer, whereas the DRAM figures represent the potential selling value of the memory contained within a square millimeter of silicon, thus illustrating how much revenue a DRAM maker can theoretically get from a given die area at the assumed memory price. Interestingly, Kurnal Insights' $1.50/Gb assumption is almost exactly in line with the current spot price of DDR5 eTT memory. According to DRAMeXchange, 16Gb DDR5 eTT chips carried a session-average price of $24.80 on September 21, equivalent to $1.55/Gb. At that price, 1b DRAM with a density of 0.436 Gb/mm² would be valued at approximately $0.676/mm², just 3% above Kurnal's $0.654/mm² estimate. It goes without saying that producing DDR5 memory is considerably cheaper than making logic chips using TSMC's N3 process technology. However, with DRAM in short supply, memory makers are getting considerably more money for their silicon than they did historically. There are a few important caveats that make the comparison somewhat less straightforward. The calculations do not account for packaging costs, with logic requiring more expensive techniques. Additionally, TSMC manufactures chips on a contract basis, and the actual price of a processed wafer depends on the volumes, customer, and other commercial terms. Thus, comparing estimated TSMC wafer prices with DRAM spot prices is not exactly an apples-to-apples comparison. Even TrendForce notes that DDR5 spot procurement remains limited and transactions are sporadic, which means spot prices do not necessarily reflect the prices at which Micron, Samsung, and SK hynix sell the bulk of their DRAM. Get Tom's Hardware's best news and in-depth reviews, straight to your inbox. Therefore, contract DRAM prices would provide a considerably better basis for an economically meaningful comparison. However, we do not know contract prices, and while they are clearly higher than historical memory prices, they may not be as high as spot prices. To that end, we cannot state for sure that DRAM makers get more money for their wafers than TSMC does for its logic wafers. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds. Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends. - usertests Device manufacturers can simply raise prices, or try to cut corners in as many places as possible, worsening the product.Reply But I would be interested to see more expensive SoCs being used while memory reductions take place. In some cases, a faster SoC can compensate for worse memory. Mobile SoCs could include more L3 cache. AMD X3D allows you to perform better with slower/less/single-channel memory. At the very low end, such as cheap retro gaming handhelds, maybe bumping the SoC to something more capable makes sense and will allow it to emulate more systems, even if you have to settle for 2-4 GB of RAM. Running an emulation-focused Linux instead of Android could also help. - ezst036 So thankful I run Linux and my memory usage is minimized against the lack of bloatware of other OSs.Reply - DS426 Insane. Twelve 128 GB DDR-5600 RDIMM's in a single server is looking to cost $50K USD or higher, well over even the very best AMD and Intel server CPU's in a 2-socket configuration. This isn't even for 256 GB modules or now 512's that will be available.Reply Obviously not an apples-to-apples comparison, but just crazy to think about. - urn66 Americans can thank the wave of Sinophobia and twice-elected Idiot in Chief Trump for his trade wars, locking Chinese DRAM out of the US market and a useless war on Iran that is raising the prices of everything.Reply In case people think I am going off the deep-end, most electronics have a high fraction of plastics derived from oil and wafer fabs depend on petrochemical gasses now increasingly in short supply (only Russia can take up the slack). Elections have consequences, maybe use your brains to think before the mid-terms and send Disaster Donald a message.
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