DRAM prices are going to rise further!

Industry forecast data shows that due to the continued high investment of Cloud Service Providers (CSP) in artificial intelligence infrastructure, the supply growth of Dynamic Random-Access Memory (DRAM) and NAND flash cannot keep up with the pace of demand expansion. It is expected that the global memory market will continue to be in a tight supply situation in 2026, pushing product prices higher. This market outlook is based on the fluctuating year of 2025 for memory manufacturers. In that year, manufacturers were initially dealing with the impact of geopolitical uncertainties and excess inventory, but in the second half of the year, the supply-demand situation in the market suddenly tightened. Analysts believe that as the proportion of artificial intelligence servers in the industry's production capacity continues to rise, suppliers are tilting their capacity towards higher-profit products, and this supply-demand imbalance is expected to continue. Industry estimates show that the supply of DRAM is expected to increase by about 15% to 20% in 2026, while demand is expected to grow faster, reaching around 20% to 25%. The NAND flash market is showing a similar trend, with the supply expected to increase by 13% to 18%, while demand is expected to increase by 18% to 23%. This supply-demand gap is most pronounced in the server application field. Analysts predict that with major cloud platforms continuing to increase their investment in artificial intelligence training and inference business, the consumption of DRAM and NAND flash in the server field is expected to surge by 40% to 50% in 2026. The phased-out DDR4 exacerbates traditional product supply pressure The rapid reduction of traditional DDRAM production lines has become a core factor leading to memory shortages. Leading suppliers are accelerating the elimination of DDR4-related production lines and reallocating wafer capacity to newer, higher-profit products. It is rumored in the industry that by the second half of 2026, the proportion of Samsung Electronics and SK Hynix's DDR4 wafer production is expected to decrease to single-digit percentages, leading to a substantial reduction in the market supply of DDR4. The capacity contraction directly drives the strong rebound in DDR4 prices. Although some sectors are gradually transitioning to DDR5 platforms, in the fourth quarter of 2025, the spot price difference between DDR4 and DDR5 further widened, confirming the continued demand for DDR4. Market insiders estimate that the supply of DDR4 will be short of demand by about 10% in 2026, supporting its price to remain high at least until the second half of 2026. Memory suppliers in Taiwan have benefited from these market changes. Nanya Technology has further consolidated its position as the world's largest DDR4 supplier, while Macronix has increased capital expenditure to expand production capacity. According to industry sources, Macronix plans to increase its Kaohsiung plant's monthly capacity from about 14,000 wafers to 24,000 to 25,000 wafers. High Bandwidth Memory (HBM) encroaching DDR5 capacity As the proportion of High Bandwidth Memory (HBM) in high-end capacity continues to rise, the pressure on memory supply is further increasing. Industry estimates show that the HBM3E capacity of SK Hynix, Micron Technology, and Samsung Electronics has been fully booked. Currently, SK Hynix's HBM4 product has been validated by customers, and it is expected that other competitors will quickly follow suit with the layout of HBM4, further squeezing the capacity space of standard DDR5. At the same time, artificial intelligence servers and new generation Central Processing Unit (CPU) platforms are gradually adopting larger capacity DDR5 RDIMM memory configurations, prompting suppliers to focus more on enterprise-level and artificial intelligence-related products. Market estimations show that the contract price of Samsung's 64GB DDR5 RDIMM memory has increased from around $265 in the third quarter of 2025 to about $450 in the fourth quarter, and may approach $480 in the first quarter of 2026, with the possibility of further increases. Analysts point out that excluding HBM, the prices of traditional DDRAM products increased by nearly 50% or more in the fourth quarter of 2025. This price increase trend is expected to continue into the first half of 2026, and given the scale of the supply-demand gap, there is limited room for product prices to fall even in the second half of 2026. In 2026, the demand for 128GB or larger capacity DDR5 memory modules and SOCAMM2 memory configurations using LPDDR5X specifications is expected to account for a larger share of DRAM capacity. In addition, the production of HBM4 will not only consume more wafers but also involve more complex yield management, further exacerbating the structural supply pressure on the memory market. As memory manufacturers suspend public quotes and continue to raise prices, purchasers in non-artificial intelligence and consumer markets are facing the dual challenges of rising procurement costs and a shortage of supply. NAND flash capacity expansion struggles to alleviate supply shortages In the NAND flash field, the process of capacity expansion is also constrained. Although Kaixiang and Yangtze Memory are constructing new production bases, industry sources suggest that these new capacities are unlikely to make a substantial contribution to market supply dynamics until the second quarter of 2026. The explosion of artificial intelligence inference business is also reshaping the market demand structure for NAND flash. In 2025, capital investment in inference-related infrastructure exceeded that of training business, and this investment is expected to further increase in 2026, driving a rapid increase in demand for enterprise-level Solid State Drives (SSDs). North American cloud service operators have a growing demand for high-capacity SSDs ranging from 128TB to 256TB, prompting manufacturers to transition from Triple-Level Cell (TLC) NAND flash technology to Quad-Level Cell (QLC) technology to achieve a balance between cost and storage density. The large-scale bookings of NAND flash by cloud service providers have significantly driven up prices. Market estimates show that in the fourth quarter of 2025, NAND wafer prices surged by about 95% to 100% compared to the previous quarter, making it difficult for some buyers to secure stable supply even at higher prices. Analysts predict that the shortage of NAND flash supply and the trend of rising prices will continue into 2026, although the pace of price increases may slow down. Memory module manufacturers are under pressure, and profit margins are facing challenges The tense supply situation is forcing memory module manufacturers to adopt limited shipping strategies and prioritize the orders of strategic customers. While the increase in average selling prices has supported revenue growth, the continuous rise in raw material costs is squeezing manufacturers' profit margins and intensifying the competition for sources. ADATA Technology indicates that the polarization of the memory module market in 2026 may intensify, with some manufacturers able to secure stable chip supply, while others will continue to face the challenge of supply shortages. Industrial memory supplier A-DATA International points out that cloud artificial intelligence businesses will be the core growth driver of the market in 2026, and the acceleration of artificial intelligence inference and edge computing applications may benefit manufacturers with product lines related to artificial intelligence. Main controller chip manufacturer Phison Electronics reveals that the company has locked in some chip supply for 2026 during the industry's off-peak season, but these capacities are still insufficient to meet market demand. Phison Electronics predicts that the supply-demand imbalance in the memory market will continue for several years and plans to reduce shipment volume in the retail market to focus resources on enterprise-level customers. Analysts caution that there are still many risks in the current market, including technical challenges in the production of high-end memory products and potential fluctuations in capital expenditure by cloud service providers. Looking ahead to 2026, with strong demand driven by artificial intelligence and the dual effect of structural supply constraints, the pricing power in the memory market will remain firmly in the hands of memory chip manufacturers.