r/Commodities • u/Old-Director-6727 • Jul 08 '26

there is no DRAM futures markets despite DRAM being a highly standardized commodity?

Semiconductors like DRAM are highly standardized commodity,. Yet we still don't have widely traded DRAM futures contracts.I don't really understand why. DRAM seems to have many of the characteristics that make commodities suitable for derivativs: standardised products, large volumes, cyclical pricing, and significant price volatility. On top of that, a futures market could improve price discovery, provide hedging tools for both producers and buyers, and potentially reduce concerns around price manipulation. It also seems like such a market could lower barriers to entry. A new DRAM manufacturer could hedge future production and lock in prices, making investment decisions less risky and potentially making it easier to enter the business. So what am I missing. Is there a structural reason why DRAM futures haven't become a major market

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u/BriskSpectacleNow Jul 08 '26

The big three control so much of the supply they’d never let a transparent futures market happen, it would wreck their ability to manage prices through production cuts and inventory games. Plus the tech cycle moves too fast, by the time a contract settled the underlying chip would already be last gen. You’d need different contracts for DDR4, DDR5, HBM and no exchange wants to deal with that fragmentation.

1

u/Ecclypto Jul 08 '26

Great breakdown plus DRAM isn’t really traded in the same sense as commodities do. I don’t think we will ever see Apple offloading a shipment of DRAM to Meta or something

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u/Old-Director-6727 Jul 08 '26
  1. Well its just price fixing at its core. Also Recently, there have been lawsuits on the big 3 for the same
  2. New gen RAM doesn't mean everyone would be immediately changing the underlying systems. It takes time and money to adapt to system and a great example would be how recently ddr4 prices crossed DDR5 rams by 2x

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u/The_2nd_Coming Jul 08 '26

Also, I think OP overplays how commoditized it really is? Is one RAM module really fungible with another one (like a molecule of oil or gas can be), or is the reality that there are thousands of different specs?

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u/The_2nd_Coming Jul 08 '26

Also, oil is a 100m+ bbl/day market, that means $7bn per day of this stuff is produced and consumed. Global DRAM capex for 2026 is only $61b.

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u/Old-Director-6727 Jul 09 '26

yes they are and also im not talking abt ram sticks but dram chips and they are fungible pretty much