- Conventional DRAM prices are expected to increase 58-63% quarter-over-quarter.
- Current projections exclude potential impacts from regional conflict between the United States, Israel and Iran.
- AI infrastructure is rapidly diverting production away from consumer memory markets.
The cost of memory and storage components is rising sharply, with new projections indicating significant increases across several segments.
New data from Trendforce shows that conventional DRAM contract prices are expected to rise between 58% and 63% quarter-over-quarter, while NAND Flash prices could rise as much as 70% to 75%.
One of the main factors driving these increases is the continued expansion of artificial intelligence infrastructure, which is driving capabilities away from consumer markets.
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AI demand is reshaping supply priorities
Suppliers are shifting production toward high-margin server applications, including enterprise SSDs and high-capacity memory modules used in AI systems.
This change reduces the availability of consumer components, forcing buyers to compete for a reduced supply.
Demand for enterprise SSDs has shown no signs of slowing down, as large-scale AI deployments continue to expand.
Cloud storage service providers would be willing to accept higher prices and enter into long-term agreements to ensure access to critical components.
This dynamic strengthens the influence of suppliers, allowing them to maintain high price levels despite weaker demand in traditional markets.
As suppliers increase production through process improvements and higher-density technologies, overall capacity growth remains limited.
Significant expansion is not expected until late 2027 or 2028, which would leave a prolonged period of tight supply conditions.
At the same time, manufacturers are deliberately limiting shipments to lower-margin segments, including client SSDs and NAND wafers, to maintain profitability.
In the mobile and embedded storage markets, the situation seems equally limited.
Although demand for smartphones has weakened, the need for high-speed memory driven by AI features remains stable.
The automotive and industrial sectors also contributed to the recovery in demand, further complicating supply allocation decisions.
As a result, certain categories, including eMMCs and UFS, are facing particularly tight supply gaps, leading to corresponding price increases.
The effects of limited supply are visible in almost every memory category.
Graphics memory prices are rising due to limited capacity allocation, while consumer DRAM continues to face shortages as vendors reduce their exposure to lower-margin products.
Even where demand has faltered, reduced shipping has kept prices high by limiting availability.
Retail buyers are responding to these conditions by adjusting their purchasing strategies, with some choosing to replenish their inventories in anticipation of further increases.
However, rising costs are also dampening demand in segments such as memory cards and USB storage, where margins are already thin.
Interestingly, the conflict between the United States, Israel and Iran, which is expected to disrupt supply chains and potentially drive up prices, has not been factored into the current projections.
“Our analysts have not included regional conflict in their current pricing models as no substantial disruption in memory supply has been observed at this point,” TrendForce told TechRadar Pro.
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