(Yicai) July 3 -- The prices of Double Data Rate 4 memory products on sale in Shenzhen’s Huaqiangbei, an area of the Chinese city that is home to one of the world's largest electronics markets, have surged after major manufacturers began to phase out production and focus on newer lines.

DDR4 16-gigabyte product prices have climbed to more than CNY200 (USD27.90) from around CNY100 over the past month, with some modules pushing CNY300, according to vendors at Huaqiangbei.

The price spike comes as South Korea’s Samsung Electronics and SK Hynix along with US-based Micron Technology confirmed that they will stop making DDR4 products and move on to DDR5 instead. But DDR4 is still widely used in budget computers and smartphones, and the higher cost could make these products uncompetitive.

Some Huaqiangbei vendors said that stockpiling is occurring in the market. TrendForce analysts also noted that after makers issued end of life notices for DDR4 products, buyers rushed to replenish inventories, tightening spot supply and driving sharp price hikes. Micron confirmed its discontinuation plan in June.

The average spot price for DDR4 16GB 3200 rose 50 percent to over USD6 last month from USD3.97 in early April, according to market researchers at TrendForce. Prices of DDR4 32GB modules are now generally above CNY500 (USD70).

TrendForce analyst Xu Jiayuan has said that memory prices could rise 5 percent to 10 percent in the second quarter, with DDR4 increases outpacing DDR5. Market researchers expect DDR4 supply gaps to persist. The latest projections from ChinaFlashMarket are for a 15 percent to 20 percent shortage of LPDDR4X for mobiles.

But the gap may present opportunities. Industry insiders have suggested that Chinese chipmakers could step in and boost their domestic market share.

Many vendors advising a wait-and-see approach, but prices could continue to keep rising. One seller said that with DDR4 supply continuing to shrink, prices are unlikely to drop rapidly from the current highs.

Editor: Tom Litting