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

Ask AI · Why do dealers prefer to clear out memory inventory even at a loss?

Image source: Visual China

Blue Whale News, April 7 (reporter Zhai Zhichao) Recently, memory module prices have seen another steep drop, once again drawing widespread attention from the market.

In interviews, multiple dealers in Shenzhen’s Huaqiangbei repeatedly mentioned — “Now memory storage feels like trading stocks.” One dealer told a reporter from Blue Whale Technology, “Prices have been falling for many days, and they say it might be going up again next.”

According to a Blue Whale Technology reporter, in the recent period, 16GB DDR4 has dropped from 900 yuan to around 700 yuan, while 16GB DDR5 has plunged from a high of 1,800 yuan down to around 1,200 yuan; the price drop for some models exceeds 30%. On social media, “wait-and-see” investors are cheering, believing they’ve finally gotten the chance to act.

However, when the Blue Whale Technology reporter visited the Huaqiangbei market, they found that things are not that simple.

Multiple dealers told the Blue Whale Technology reporter that even though terminal market prices have continued to decline, the official guidance prices set by original manufacturers such as Samsung, SK hynix, and Micron remain firm. What’s more, the market has rarely seen a price inversion phenomenon—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 cuts are essentially dealers “selling at a loss to drum up business.” “The factory price hasn’t changed, and our procurement cost is still very high.” Dealer Li Qiang admitted to the Blue Whale Technology reporter.

Dealer “selling at a loss to drum up business”

Why would dealers push goods out even if they lose money? The core reason is the cash-flow pressure caused by high inventory.

“The market has too much stock, so we have to sell at a low price.” Multiple dealers said that because earlier expectations for market demand were overly optimistic, combined with some channel partners proactively stockpiling, inventory has piled up severely along the distribution chain. As the cash-flow pressure keeps increasing, cutting prices to sell off inventory has become the only way to bring in cash. “Even if we lose money, we still have to sell—there’s nothing we can do.” Li Qiang said helplessly. According to information provided, as of the end of March 2026, inventory across memory channels is generally above 60 days—far beyond the safety line—forcing dealers to cut prices and clear stock.

Image source: Huaqiangbei dealer storefront / photographed by Blue Whale Technology reporter

A seller in Huaqiangbei also confirms this: “Later, the price of DDR4 will rise back pretty quickly, because storage manufacturers haven’t reduced prices. Now DDR4’s ex-factory price is around 900 yuan, but the market price is only seven or eight hundred—cheaper than the ex-factory price.”

As the reporter learned, there are currently two pricing systems in the memory industry. Large leading electronics manufacturing enterprises mainly place direct orders with the original manufacturers, and settlement is based on contract prices updated quarterly. In contrast, the many small and micro dealers and DIY consumers purchase from the spot trading market, where prices move with the market. The memory modules that suffered this round of price collapse were precisely those in the spot market.

This price drop also caused many dealers to fall overnight from “extraordinary profits” into “massive losses.” Li Qiang said “We’re losing money too,” and added plainly that “a large amount of capital has been tied up by the inventory issue.”

The contract market is a different story. According to TrendForce’s latest forecast, in the second quarter of 2026, the contract price of standard-type DRAM is expected to rise 58% to 63% quarter-over-quarter, and the price of all NAND Flash product lines is expected to increase 70% to 75% quarter-over-quarter. That means that while dealers are dumping memory modules at a loss, large customers who can buy directly from the original manufacturers are actually getting prices that are rising.

In other words, the fluctuations in memory module prices this time are not a comprehensive reversal of global supply-and-demand, but more like a concentrated outbreak of a channel-market liquidity crisis and structural misalignment.

In the past, memory module prices had cycles, but rises and falls were measured in quarters or even years. Dealers mainly profited from the spread between wholesale and retail; making one or two yuan per module was typical. Now, price changes are refined down to the level of days—sometimes “two prices in one day.”

Stockpiling became the trend starting in November last year

How did all this happen? The answer traces back to the 2025 memory “super bull market.” That year, memory prices surged violently, attracting a large number of speculators to enter the market. Based on what traders in Huaqiangbei observed, many “outsiders” also started getting into the memory module business just because “they think they can make money.”

One dealer said that in a memory chip group chat, more than 150 people poured in within a little over five hours. The operating model of this speculative capital was like trading stocks: stock up at low prices, sell at high prices, and profit from the spread. A Shenzhen dealer told Blue Whale Technology’s reporter back in November 2025 that at the time, “many dealers started stockpiling at large scale.” And the central risk of stockpiling is that once prices fall, the accumulated inventory becomes a hot potato.

This speculative logic was further amplified by the market psychology of “buying when prices rise, not buying when prices fall.” A Huaqiangbei trader who has personally experienced multiple rounds of price increases and decreases analyzed: “When prices rise, everyone chases after inventory; once prices start to fall, downstream channels keep watching and waiting. Sellers could still hold on at first, but the moment the price breaks below people’s psychological bottom line, panic selling appears immediately, and it ultimately turns into a vicious cycle of ‘the more it falls, the fewer people are willing to take the inventory.’” It’s just like the stock market’s “chasing momentum to buy and selling in panic.”

Dealer Zhang Shuai put it even more directly: “Maybe someone is running the market, because there’s just too much inventory on hand.” This sentence also reflects the widespread suspicion among dealers that the market is being manipulated.

When speculation becomes the market’s dominant logic, dealers’ survival conditions change fundamentally too. Before 2025, memory wholesaling was in a “low-profit era,” where making one or two yuan per module was the norm; during last year’s price-increase cycle, stockpiling became the industry’s shared choice, and “extraordinary profits” became the new norm as well—one memory module could easily rise by a hundred yuan or even a thousand yuan. A business in Huaqiangbei said that the memory modules he sold were “sold for more than 700 yuan six months ago, and last year’s peak price reached more than 2,500 yuan.”

Based on reports from shops on the front line of Huaqiangbei, after a round of rapid declines, memory module prices have now entered a brief “stabilization” phase. “We can only say prices have been relatively steady; they’re not as crazy as before, with one price per day. Now one price can hold for a few days—that’s already pretty good.” Zhang Shuai said.

Even so, most merchants remain cautious about current price fluctuations, making small adjustments to quotes almost every day. Not only do they not dare to stock up easily, some have even paused replenishment to the upstream. No one in the market dares to make a definitive call on the future price trend.

From a fundamentals perspective, upstream storage manufacturers have not cut prices, which provides some support for memory module pricing. But whether channel inventory has been digested to a reasonable level, and whether concepts such as AI can generate a new round of real market demand, are still unknown.

What can be confirmed is that the memory module market is no longer the simple chain where manufacturers lead, dealers follow, and users pay. It is becoming more and more like a small-scale commodity market—full of expectations, gamesmanship, and uncertainty.

For ordinary consumers, it may be just as dealer Wang Li said: “If you can use it, buy; if you can’t use it, wait. It’s that simple.” But for the dealers who are in the middle of it, this market battle, comparable to “trading stocks,” is far from over.