Memory chip prices may jump 70% soon: Here's why
What's the story
The global memory market is poised for a major price surge, with analysts predicting a high double-digit increase in Q1 2026. This comes as chipmakers are prioritizing AI server production over consumer devices due to rising demand. Samsung Electronics and SK hynix are reportedly planning to raise server memory prices by up to 70% this quarter, according to Korea Economic Daily.
Market impact
Price hikes could nearly double memory costs by mid-2026
The proposed price hikes from Samsung and SK hynix, combined with a 50% increase in 2025, could nearly double memory prices by mid-2026. The two South Korean giants, along with US-based Micron, dominate global memory production. They are all shifting advanced manufacturing capacity to high-margin server DRAM and HBM chips for AI infrastructure. This shift is squeezing supply for PCs and smartphones.
Price surge
Conventional DRAM prices already jumped 55-60% in a quarter
Taiwan-based market watcher TrendForce reports that conventional DRAM prices have already jumped by 55-60% in a single quarter. Despite the focus on server chips, supply of these components remains strained too, with supplier inventories falling and shipment growth reliant on wafer output increases. TrendForce forecasts that server DRAM prices will jump by more than 60% in Q1 2026 due to this continued strain on supply.
AI impact
AI's demand for memory fuels price hikes
The current memory chip shortage is largely due to AI's insatiable demand for memory. Hyperscalers like Microsoft, Google, Meta, OpenAI, and Amazon are driving this demand, permanently reshaping silicon wafer allocation away from consumer products such as phones and PCs. This shift restricts the supply of general-purpose memory modules and pushes up prices across the board. IDC expects DRAM and NAND supply growth to lag at just 16% and 17% respectively this year, well below historical norms.
Economic impact
AI infrastructure investment could fuel broader inflation
The rising prices in the memory market have sparked a surge in shares of major memory chip makers. According to Reuters, Micron's shares surged by 240% last year, while Samsung's more than doubled and SK Hynix's market cap nearly quadrupled. However, economists have warned that the rising costs due to AI infrastructure investment could fuel broader inflation as these price hikes ripple through the economy.