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Surging demand from artificial intelligence buildouts is causing a global memory chip shortage, elevating prices and prompting shifts in supply strategies as industry players brace for ongoing scarcity into 2026.
Memory chip prices are surging as artificial intelligence buildouts tighten supply for server DRAM, especially DDR5, and high-bandwidth memory (HBM), forcing buyers to plan for higher component costs and giving suppliers greater leverage in contract negotiations. According to the report by EditorialGE, contract pricing strengthened in late 2025 as large cloud and hyperscale buyers increased order volumes, and suppliers have become more willing to raise quotes. [1]
The immediate driver is rapid AI infrastructure expansion by cloud service providers upgrading data centres to support larger models and higher-performance computing platforms, which require far more memory per server than traditional workloads. TrendForce’s analysis shows global server shipments are expected to rise about 4% in 2026 while memory content per server continues to climb, pushing bit demand higher even if unit growth is modest. [1][4]
Supply competition between memory types is intensifying because HBM and conventional DRAM share wafer capacity at leading suppliers; booming HBM demand for AI accelerators can “crowd out” other DRAM output and tighten overall availability. TrendForce observed an HBM3e price premium of more than four times DDR5 as of the second quarter of 2025, a gap that underscores how HBM scarcity is pressuring the broader market. [1][4]
Market trackers and industry analysts have revised price outlooks sharply upward. TrendForce raised its late‑2025 DRAM outlook to project 18–23% growth in contract prices for 4Q25, up from an earlier 8–13% view, and expects DDR5 contract prices to remain on an upward path through at least the first half of 2026. Counterpoint Research and other forecasters report DRAM gains through 2025 and further steep increases into 2026 as AI demand reshapes priorities. [1][4][5]
That re‑pricing is already influencing OEMs and channel behaviour. Asus has announced product price increases starting 5 January 2026, citing rising DRAM and storage costs driven by AI demand, while IDC warns the PC market could shrink materially in 2026, by as much as 9% in a downside scenario, if memory shortages persist and component costs push OEMs to raise device prices. Smaller PC manufacturers and DIY builders are expected to feel the heaviest impact. [2][3]
Suppliers are responding by reshaping product mix as well as prices. TrendForce and company earnings show a profitability shift: DDR5 profitability is forecast to surpass HBM3e from early 2026, prompting some suppliers to consider allocating more capacity to server DDR5 to maximise returns even as they try to honour HBM commitments to major AI customers. TrendForce also notes suppliers may attempt to lift HBM3e average selling prices to balance portfolio profitability if DDR5 becomes the near‑term profit leader. [1][4]
The corporate results reflect the upcycle. Micron reported fiscal Q1 2026 revenue and net income that markedly outpaced the prior year, and SK hynix reported strong revenue and operating profit driven by HBM and high‑performance server products; SK hynix additionally said HBM4 shipments began in Q4 2025 and that HBM supply discussions for 2026 had been completed, signalling customers are securing multi‑quarter supply amid tightness. [1]
Beyond GPUs, new demand sources are emerging. TrendForce and other reporting indicate ASIC adoption and Nvidia’s use of smartphone‑class LPDDR5X in server CPUs are further widening the scope of AI‑driven memory demand, putting pressure on smartphone and mobile memory pools as well as server inventories. Counterpoint Research warns that LPDDR5X demand could elevate prices for smartphone‑class memory, with knock‑on effects for phones and other consumer electronics. [6][5]
For buyers the implications are clear: longer lead times, stronger inventory planning and multi‑quarter supply agreements will become more important than chasing the lowest spot price. Buyers may prioritise delivery certainty to avoid delayed server racks and data‑centre deployments, while procurement teams watch product transitions, HBM3e to HBM4 and legacy DDR to DDR5, because transition periods can constrict yields and effective supply even with high fab utilisation. TrendForce sums up the outlook as a structural supply shortage into 2026 unless suppliers can expand output and improve next‑generation yields without triggering an oversupply cycle. [1][4][7]
What happens next will hinge on several moving parts: how quickly suppliers scale HBM and DDR5 capacity and improve yields, whether additional sources of memory demand (such as ASICs and new CPU memory architectures) continue to grow, and how OEMs and hyperscalers adjust procurement strategies. Industry projections and company statements now point to a memory market where AI has turned what was once a cyclical commodity into a capacity‑constrained critical input for global compute buildouts. [1][5][7]
📌 Reference Map:
##Reference Map:
- [1] (EditorialGE) – Paragraph 1, Paragraph 2, Paragraph 3, Paragraph 4, Paragraph 6, Paragraph 7, Paragraph 9
- [4] (TrendForce press release) – Paragraph 2, Paragraph 3, Paragraph 4, Paragraph 6, Paragraph 9
- [5] (Tom’s Hardware / Counterpoint summary) – Paragraph 4, Paragraph 8, Paragraph 9
- [2] (Tom’s Hardware / Asus report) – Paragraph 5
- [3] (Tom’s Hardware / IDC report) – Paragraph 5
- [6] (TrendForce / Chosun Biz / Goldman Sachs summary) – Paragraph 8
- [7] (TrendForce research report) – Paragraph 9
Source: Fuse Wire Services
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