Investigation | Memory "Crash": Dealers' Stock Trading Game

Source: Visual China

Blue Whale News, April 7 (Reporter Zhai Zhichao) Recently, the prices of memory modules have gone through a round of steep, cliff-like declines, drawing renewed widespread attention from the market.

Multiple distributors in Shenzhen’s Huaqiangbei, during interviews, independently mentioned—“It feels like memory storage drives are being traded just like stocks.” One distributor told Blue Whale Technology’s reporter that “Prices have been falling for so many days, and they say they’re supposed to go up again next.”

According to what Blue Whale Technology’s reporter learned, in the near term, 16GB DDR4 has dropped from 900 yuan to about 700 yuan, 16GB DDR5 has plunged from a peak of 1,800 yuan down to around 1,200 yuan, and the price drop of some models exceeds 30%. On social media, “wait-and-see” investors are cheering with delight, believing they have finally waited for an opportunity to place orders.

However, after Blue Whale Technology’s reporter visited the Huaqiangbei market, it found that things are not that simple.

Several distributors told Blue Whale Technology’s reporter that although terminal market prices keep sliding, the official guidance prices from original manufacturers such as Samsung, SK hynix, and Micron still remain firm. It is also rare for a price inversion to occur in the market—that is, the retail price in the spot market is even cheaper than the original manufacturers’ ex-factory price.

This means that the current price cut is, in effect, distributors selling at a loss just to “buy goodwill.” “There’s no change in the manufacturers’ pricing, and our procurement costs are still very high.” Distributor Li Qiang told Blue Whale Technology’s reporter candidly.

Distributors “sell at a loss to make noise”

Why would distributors push to ship even if it means losing money? The root cause lies in the funding pressure brought by high inventory.

“The market has too much stock, so we have no choice but to sell at a lower price.” Multiple distributors said that because earlier expectations for market demand were overly optimistic, combined with some channel merchants actively stockpiling, inventory backlog in the circulation process has become serious. As financial pressure keeps mounting, unloading at discounted prices becomes the only option to pull cash back into circulation. “Even if we lose money, we still have to sell—there’s no way around it.” Distributor Li Qiang said helplessly. According to information provided, as of the end of March 2026, inventory across the memory channel generally exceeds 60 days, far above the safety line, forcing distributors to cut prices and clear out stock.

Source: Photo taken by Blue Whale Technology reporter at distributors’ counters in Huaqiangbei

A seller in Huaqiangbei also corroborated this: “Later, the price of DDR4 will quickly go back up, because storage manufacturers haven’t lowered their prices. Right now, the ex-factory price of DDR4 is around 900 yuan, but the market price is only about seven or eight hundred—cheaper than the ex-factory price.”

As the reporter learned, the memory industry currently has two pricing systems: leading large electronics manufacturing enterprises mainly place orders directly with original manufacturers, and settlement uses contract prices that are updated on a quarterly basis; meanwhile, the large number of small and micro distributors and DIY consumers purchase from the spot trading market, where prices move with the market. The memory modules suffering from this round of price crash are precisely those traded in the spot market.

This round of price cuts has also caused many distributors to fall from “windfall profits” to “huge losses” overnight. Li Qiang admitted “We’re also losing money,” and added bluntly that “a large amount of capital is being tied up in inventory.”

The contract market is a different story. According to TrendForce Jiubang Consulting’s latest forecast, in the second quarter of 2026, the contract price of standard-type DRAM is expected to rise quarter-over-quarter by 58% to 63%, and the prices of all NAND Flash product lines are expected to rise quarter-over-quarter by 70% to 75%. In other words, while distributors are dumping memory modules at a loss, large customers who can directly source from original manufacturers are seeing their prices actually rising.

Put another way, the fluctuations in memory module prices this time are not a full reversal of global supply and demand; they are more like the concentrated outbreak of a liquidity crisis in the channel market alongside structural mismatches.

In the past, although memory modules had price cycles, their rises and falls were measured in quarters or even years. Distributors mainly profited from the spread between wholesale and retail prices, and making a profit of 1 to 2 yuan per unit was common. Now, price changes are fine-grained down to a daily basis—sometimes “two prices in a single day.”

Stockpiling became the trend since last November

So how did all of this happen? The answer traces back to the 2025 “super bull market” for memory. That year, memory prices surged dramatically, attracting a large number of speculators to enter the market. Based on what merchants in Huaqiangbei observed, many “outsiders” also started getting involved in the memory module business, simply because they “felt they could make money.”

One distributor said that in a group chat for memory chip products, more than 150 people poured in within more than 5 hours. The operating pattern of these speculative funds is like stock trading: stockpile at low prices, sell at high prices, and profit from the difference. A Shenzhen distributor told Blue Whale Technology’s reporter back in November 2025 that “many distributors began large-scale stockpiling.” The core risk of stockpiling is that once prices fall, the accumulated inventory becomes a hot potato.

This logic of speculation was further amplified by the market psychology of “buying when prices rise and not buying when prices fall.” A Huaqiangbei merchant who has experienced multiple rounds of price increases and decreases analyzed: “When prices are rising, everyone is chasing orders; once the market starts to fall, downstream channels all switch to watch-and-wait. Sellers can hold on at first, but once prices break below their psychological bottom line, panic selling shows up immediately. In the end, it turns into a vicious cycle where the deeper the drop, the fewer buyers there are.” This is exactly the same as the stock market’s “chase the rallies and sell off the losers.”

Distributor Zhang Shu put it even more directly: “Maybe someone is manipulating the market, because there’s simply too much inventory.” This sentence also reflects the widespread suspicion among distributors that the market is being manipulated.

When speculation becomes the dominant logic of the market, distributors’ survival conditions change fundamentally. Before 2025, memory wholesaling was in a “low-margin era,” where making 1 to 2 yuan per unit was the norm; and during last year’s price-increase cycle, stockpiling became the industry-wide choice, so ‘super profits’ also became the norm—one memory module could rise by hundreds of yuan or even thousands of yuan at a time. A merchant in Huaqiangbei said that the memory modules he sold were “over 700 yuan half a year ago, and the highest price last year was over 2,500 yuan.”

According to reports from merchants on the front line in Huaqiangbei, after a round of rapid declines, the current memory module prices have entered a temporary “stabilization” phase. “We can only say prices are relatively steadier now. It’s not as crazy as before—one price per day. Now that one price can hold for a few days, that’s already pretty good,” Zhang Shu said.

Even so, most merchants remain cautious about the current price fluctuations and adjust their quotes almost every day. They not only don’t dare to prepare inventory easily, but have even paused replenishment from upstream. As for the future price trend, no one in the market dares to make a definitive conclusion.

From a fundamentals perspective, upstream storage manufacturers have not lowered prices, which provides some support for memory module pricing. But whether channel inventory has already been digested to a reasonable level, and whether concepts like AI can drive a new round of genuine market demand—these remain unknown.

What can be confirmed is that the memory module market is no longer that simple chain where manufacturers lead, distributors follow, and users place orders; it is becoming increasingly like a small-scale wholesale commodity market—full of expectations, games, and uncertainty.

For ordinary consumers, it may well be just as distributor Wang Li said: “If you can use it, buy it; if you can’t use it, wait. It’s that simple.” But for the distributors immersed in this market, this “stock-trading-like” game may be far from over.