The highest capacity DRAM to ever be used for the Commodore 64 motherboard was 256Kbit. By the early 1990s, 1Mbit DRAM was commonplace, but used in a 256Kbx4 would require the C64 to have 256KB of main memory. It was almost certainly cheaper to continue to source the 256Kbit RAMs than to either upgrade the C64 to support 256KB of RAM near its end-of-life, or to just use higher capacity chips in a reduced manner.
Of all the popular 1980s, 8-bit machines, that were still being manufactured into the early 1990s, only the Apple IIgs (ROM 3) and the SAM Coupe utilized 1Mbit DRAM on the motherboard. There might have been some PC clones with 8088 CPUs still made in the early 1990s and utilizing 1Mbit DRAMs, but I don't know of any. The 80286 with its 16-bit data bus was pretty dominant by 1990.
NOTE: Some would call the IIgs a "16-bit computer", but it clearly has only an 8-bit data bus.