PC Prices Surge After Decades of Decline
Rising DRAM Prices, Korea’s Signature Product, Also a Factor
Price Spike Opens Door for Chinese DRAM to Enter Global Market
In January 1981, Sambo Computer introduced the first personal computer (PC) to the Korean market. This product, labeled SE-8001, was priced at about 10 million won. At that time, the starting monthly salary for a university graduate had just surpassed 200,000 won for the first time (according to the Korea Employers Federation). In other words, the SE-8001 was a high-priced item equivalent to four years of a new employee’s annual salary at most companies. Although it was called a personal computer, its main customers were actually businesses. Companies purchased the SE-8001 to improve office efficiency in tasks such as accounting.
The first product that truly fit the description of a home or personal computer appeared in the Korean market in 1983. That was Samsung Electronics’ SPC-1000. It was priced at 495,000 won. Although this was still more than twice the monthly salary of a young professional, the price had dropped to a level that was attainable for those willing to make a significant investment. The performance of today’s home computers is hundreds of thousands of times better than the SPC-1000. Calculations that took the SPC-1000 an hour can now be solved in just 0.1 seconds.
For decades, computer performance has soared, but the real price, adjusted for inflation, has continued to fall. The term used to describe this phenomenon is Moore’s Law. In 1965, Gordon Moore, co-founder of Intel, announced that the performance of computers would double every 18 months. As a result, he predicted that semiconductor performance would increase while prices would remain the same or even decrease. In reality, the performance of PCs, which are collections of semiconductors, has continued to rise dramatically over the decades, but when adjusted for inflation, prices have continued to drop. Moore’s Law was an empirical rule that embodied the confidence that IT development would positively change human life.
However, recently, there has been talk that Moore’s Law is dead. There is a saying, “Today is the cheapest it will ever be.” This is usually said by real estate agents when selling apartments. But now, PC assembly retailers are constantly repeating this phrase. In fact, PC prices are rising overnight. The CEO of an IT company said, “The unit price for company PCs has doubled in the past one to two years.”
Some explain the rise in PC prices by linking it to the Bitcoin craze. Among computer components, the price of graphics processing units (GPUs) has risen the most. NVIDIA’s GPU is the representative example. When I interviewed Jensen Huang, CEO of NVIDIA, in 2010, he said, “The world’s most powerful semiconductor for computation is not Intel’s CPU, but NVIDIA’s GPU.” At that time, the roles of graphics cards and CPUs were completely different. It was hard to understand why he saw CPUs as competitors. But at some point, as he predicted, NVIDIA’s GPU began to take over tasks previously monopolized by Intel’s CPU. GPUs took over the role of CPUs in cryptocurrency mining computers. The competition between CPUs and GPUs had truly begun.
As the cryptocurrency craze intensified, GPU prices followed an upward curve. The domestic launch price of the GPU (RTX3080) released in 2020 was around 900,000 won, but at one point, it soared to 2.7 million won-a bizarre phenomenon. The common sense that the price of older products falls over time was shattered. Later, as NVIDIA GPUs began to replace Intel CPUs in AI servers, GPU prices skyrocketed. For example, the price of a flagship GPU released in 2014 (NVIDIA GeForce GTX 980) was $550, but a comparable product released in 2024 (NVIDIA GeForce RTX 4090) is priced at $1,600. Naturally, computer prices surged, and NVIDIA’s operating margin soared to 62.4% this year.
Furthermore, the prices of memory semiconductors used in computers have recently surged. The prices of memory semiconductors, where Samsung Electronics and SK Hynix compete for the top two spots globally, have risen by 2 to 5 times compared to the beginning of the year, depending on the type. Semiconductor analysts believe that this phenomenon, driven by explosive demand for semiconductors due to artificial intelligence (AI), will continue until 2027. There are even forecasts that Hynix will record an operating margin next year comparable to NVIDIA’s.
Semiconductors are the driving force of the Korean economy. Naturally, next year’s economy is expected to be better than this year. However, this situation could threaten the future of the Korean economy in the long term. These days, assembled PCs are mostly equipped with products from brands like G.SKILL or Essencore, rather than Samsung Electronics or Hynix. Earlier this year, consumers would have dismissed anything other than Samsung or Hynix, but now there is little objection, as domestic products are either out of stock or too expensive. In the first quarter of this year, the Chinese memory semiconductor company CXMT had a global market share in the 6% range, but by the third quarter, it had surpassed 10%. The shortage of DRAM supply and soaring prices present a tremendous opportunity for Chinese memory semiconductor companies. The fact that they can enter the market without fierce competition with Samsung Electronics and Hynix, and without suffering, is a great stroke of luck.
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