The wave of collecting memory chips is more profitable than gold

On the side of the road in the Shenzhen technology center, Roy Luo attentively examined the labels on a stack of NAND flash memory chips in the open trunk of his car. This is an essential component for phones, computers and servers, costing from a few dollars to several dozen dollars.

Luo must decide quickly before the goods fall into someone else’s hands. After checking his phone, the 30-year-old merchant nodded and immediately transferred the money to the seller.

At the world’s largest electronics market Huaqiangbei, lightning deals have been bustling since September last year. Global shortages fuel speculation. “Many people earned millions of dollars, some people earned more than 50 million yuan ($7.2 million),” Luo said.

The fever stems from the AI ​​boom – a field that requires much more memory than traditional computing. As factories prioritize capacity for AI chips, the supply for consumer equipment is tightened, causing black market prices to “dance” day by day.

Research firm TrendForce recorded a continuous increase in memory chip prices. DRAM contract prices are expected to increase 90-95%, while NAND flash chips increase about 55-60% each quarter.

The price storm immediately spread to end users. At the end of December, Xiaomi 17 Ultra launched with a price 500 yuan higher than the previous generation. Xiaomi President Lu Weibing admitted that rising component costs put direct pressure on selling prices. A similar situation also occurs with high-end models from Vivo and Oppo.

Global supply currently still depends on Samsung, SK Hynix and Micron. As new factories take years to operate, scarcity and risk are dominating every transaction in the market.

Luo has been waiting for this opportunity since 2023 after giving up his high salary at Alibaba to trade chips full-time. In April 2025, the market signal was clear, he gathered goods to wait for prices to increase instead of quickly rotating capital. “This round attracts many players and the cash flow is much larger,” he said.

On the social network Weibo, the topic comparing a box of memory chips worth as much as an apartment in Shanghai is at the top of searches. Users shared rapidly changing price lists, saying that chips increase in price faster than gold and complaining that being one day late could cost thousands of yuan more when buying a computer.

Control of supply is shifting upstream. Michael Li, leader of the SK Hynix chip supply team, said prices for high-capacity models change daily and require immediate payment. “This is no longer a buyer’s market,” Li said.

Due to lack of distribution, Li had to turn to independent traders like Luo to collect any unopened chips. However, the current game requires large capital, completely eliminating small companies that cannot afford to endure losses through fluctuations.

In China, chips mainly circulate through intermediaries for export to foreign countries – places with better purchasing power, instead of going to domestic manufacturers.

Jerry, a hardware manager at a telecommunications company, saw the price of memory modules increase sixfold from July, to 6,000 yuan. His company constantly has to adjust selling prices for customers.

“Locking the price before now is impossible. In today’s market, holding memory chips is more profitable than holding gold,” Jerry said.

Government technology projects were hit hard. Jerry told of a server manufacturer that agreed to pay a fine for breach of contract instead of shipping at a loss when chip prices skyrocketed.

The large language model DeepSeek caused a fever in early 2025, causing the demand for AI servers to accelerate. Jerry explained: “Nvidia alone has consumed huge amounts of memory, pushing Google and domestic firms into fierce competition for supply.”

Global firms prioritize orders for strategic customers, forcing retail buyers to look to domestic chips like ChangXin (CXMT) or YMTC. Despite concerns about stability, Jerry admitted that businesses have no choice but to accept risks to have goods.

Domestic firms also tightened regulations, requiring “money in exchange” instead of debt as before. In a 20 million yuan contract late last year, the chip price increased 3-4 times, making customers stunned but still had to nod.

Zack, an expert at a chip company, said customers are having to cancel plans to build data centers or reduce the scale of AI due to costs. He affirmed that the era of cheap chips is over: “Chip prices will remain high for many years to come when they become a fundamental resource like electricity or bandwidth.”