If you bought these computer parts two months ago, you could sell them for more than double today
Prices on memory and solid state storage have surged globally, with some products selling for double or more in South Africa than they were two months ago.
The increases are due to a supply shortage caused by a swell in demand from artificial intelligence (AI) companies for high-end cloud servers.
To meet the demand from hyperscale data centre providers driven by AI, chip manufacturers are focusing their production capacity on higher-margin server products, resulting in consumer product shortages.
However, consumers are not the only ones feeling the pinch. Traditional hosting companies also report struggling to secure RAM modules and solid-state drives (SSDs) for their servers.
“We need to order in new servers soon, and it is going to affect pricing,” Absolute Hosting managing director Jade Benson told MyBroadband.
“RAM makes up about 30% of our server pricing, so when you’re building servers with 2TB of RAM and tons of SSD space, the costs escalate quickly.”
Benson said that while many providers don’t purchase the latest kit, this will impact hosting prices in 2026 for any provider bringing in new hardware.
“Here’s an example. When we built our AMD Ryzen VPS hosts, we paid $290 (R4,970) for a 128GB (2x64GB) DDR5 RAM kit. That same kit now costs $1,099.79 (R18,850).”
Craig Nowitz, the CEO of IT distributor Syntech, recently told MyBroadband that the unprecedented global surges in memory and SSD prices are being acutely felt in South Africa.
“What we’re witnessing isn’t just a temporary spike; it’s a structural transformation driven by the explosive growth of AI infrastructure,” Nowitz said.
“Global hyperscalers like Microsoft, Google, and Amazon are building out AI data centres at breakneck speed, and manufacturers are prioritising these high-margin enterprise clients.”
Nowitz said this has led to significant shortages and price hikes, with some consumer SSDs up 50% and DDR5 kits doubling in price.
He warned that this trend is projected to continue, stating that as the CEO of an IT distributor, he has had a front-row seat to one of the most dramatic shifts in the tech supply chain in recent years.
“Over the past year, demand for server-grade Dynamic Random-Access Memory (DRAM) and high-bandwidth memory has skyrocketed,” he said.
“As a result, consumer-grade DDR4 and DDR5 modules, the bread and butter of our retail and integrator channels, are becoming harder to source and significantly more expensive.”
Micron shuts down its consumer brand, Crucial
The dramatic nature of the shift in the market was put in stark relief last week when memory and flash storage manufacturer Micron announced that it was shutting down Crucial, its consumer brand.
Micron is one of three major manufacturers of DRAM and NAND flash chips worldwide, alongside Samsung and SK Hynix.
“Micron will continue Crucial consumer product shipments through the consumer channel until the end of fiscal Q2 (February 2026),” the company announced.
“The company will work closely with partners and customers through this transition and will provide continued warranty service and support for Crucial products.”
Micron stated that it would continue to support the sale of Micron-branded enterprise products to commercial channel customers worldwide.
“The AI-driven growth in the data centre has led to a surge in demand for memory and storage,” said Sumit Sadana, EVP and Chief Business Officer at Micron Technology
“Micron has made the difficult decision to exit the Crucial consumer business in order to improve supply and support for our larger, strategic customers in faster-growing segments.”
Managing supply chain strain
Nowitz said that he’s told several of their key partners that where they used to see stable pricing and predictable availability, they are now navigating weekly volatility and allocation constraints.
“It’s a new reality, and we need to adapt quickly,” he said.
The NAND flash market, which includes Solid-state drives (SSDs), is following a similar trajectory. Samsung and other major suppliers have raised prices on server SSDs by up to 35%.
Nowitz said consumer models are not far behind. “At Syntech, we’ve had to adjust pricing across multiple product lines to reflect these upstream cost pressures,” he said.
“A 1TB SSD that sold for R1,200 just a few months ago now retails closer to R1,800, a 50% increase. And that’s assuming we can secure stock in time to meet demand.”
The supply-demand imbalance is stark, with reports suggesting that even tier-1 hyperscalers were receiving only 70% of their DRAM orders, while smaller OEMs are fulfilling just 40%.
For distributors like Syntech, this means tighter allocations, longer lead times, and the need for strategic forecasting.
“We’ve had to become more agile, more proactive, and more transparent with our partners. The old playbook doesn’t apply anymore,” said Nowitz.
If you’re a reseller, system builder, or enterprise IT manager, Nowitz advised planning ahead. That means securing stock early, communicating with your suppliers, and being prepared for continued volatility.
“At Syntech, we’re committed to navigating this landscape with transparency and resilience,” said Nowitz.
He said they are working closely with their vendors to optimise allocations and ensure their partners have the support they need.
“This is a defining moment for our industry. While it brings challenges, it also opens the door to innovation and smarter collaboration,” Nowitz said.
Loading ...