AMD faces rising costs as memory prices overshadow new processor launches

Advanced Micro Devices is entering the year with new processors to show, but forces beyond raw silicon performance are shaping the wider PC market. At CES, the chipmaker outlined its latest Ryzen products while also acknowledging mounting pressures from supply constraints and sharply rising component costs. Executives suggested that the challenge ahead is less about delivering headline-grabbing upgrades and more about keeping systems affordable in a volatile market.

In discussions with media at the event, AMD executives described an industry still recovering from disruption, with pricing and availability proving as influential as technical innovation. While the company continues to refresh its processor line-up, it is also having to manage expectations among PC builders and gamers who had hoped for a smoother year ahead.

Incremental gains in AMD’s latest processors

At CES, AMD unveiled several additions to its Ryzen portfolio, including the Ryzen 7 9850X3D and new Strix Halo accelerated processing units, such as the Ryzen AI Max+ 388 and 382. These chips are aimed at high-performance laptops, compact desktops and handheld gaming devices, where efficiency and integrated graphics matter as much as raw computing power.

On closer inspection, however, the announcements point to a strategy of refinement rather than reinvention. The new processors continue to rely on AMD’s RDNA 3.5 graphics architecture, rather than introducing the next-generation RDNA 4 technology. This means users should not expect dramatic leaps in visual performance, particularly when compared with last year’s models.

David McAfee, AMD’s corporate vice-president and general manager for Ryzen CPUs, acknowledged that improvements over the previous Ryzen 7 9800X3D would be modest. Gains are expected to be most noticeable in competitive esports titles and older games that benefit from higher frame rates rather than cutting-edge graphics. For many users, the update is likely to feel like a small step forward, designed to maintain momentum rather than redefine expectations.

Memory costs threaten the value equation

While new processors often dominate headlines, AMD executives indicated that the more serious challenge lies elsewhere. Prices for DDR5 memory have surged dramatically, in some cases rising by nearly 500%. Such increases have a direct impact on the overall cost of building or upgrading a PC, often outweighing the cost of the processor.

This situation complicates AMD’s long-standing position as a provider of strong performance at accessible prices. The company does not currently offer a direct rival to Nvidia’s highest-end graphics cards, such as the RTX 5080 or 5090. Instead, it focuses on appealing to cost-conscious buyers with products like the Radeon RX 9070. That strategy depends heavily on the rest of the system remaining affordable.

McAfee said AMD is in active discussions with suppliers to stabilise pricing and availability, but the company is acutely aware of the risks. Even a competitively priced processor loses its appeal if consumers must spend excessively on memory to complete a system. The imbalance has created uncertainty for PC builders, particularly gamers who are sensitive to total platform cost rather than individual components.

Software caution and a longer-term outlook

Beyond hardware, AMD is also advancing its software features, including the FSR Redstone update. This technology uses artificial intelligence to generate additional frames and smooth gameplay, improving performance without extra hardware demands. However, the company is proceeding cautiously amid mixed reactions from gamers.

Frame generation has attracted industry-wide criticism when implemented too aggressively, often resulting in visual artefacts or increased input lag. McAfee said AMD is moving “cautiously” with its approach, reflecting an awareness that players are wary of features that appear unfinished or prioritise marketing claims over real-world experience.

Looking further ahead, AMD expects the introduction of RDNA 4-based APUs to bring more substantial benefits, particularly for handheld gaming devices and low-power systems. In those scenarios, techniques such as frame generation could help smaller devices deliver smoother gameplay without excessive power consumption.

For now, AMD’s focus appears to be on stability rather than bold transformation. With memory prices climbing and market conditions unsettled, the company is concentrating on maintaining its product line and value proposition until costs ease. The message from CES was clear: innovation continues, but survival in a turbulent market has become just as important as performance gains.