- Conventional DRAM prices are set to increase 58-63% quarter over quarter.
- The current projections exclude potential impacts from the regional conflict in the US, Israel and Iran.
- AI infrastructure is moving manufacturing away from consumer memory markets rapidly.
The cost of memory and storage components is rising sharply, with new projections indicating significant increases across multiple segments.
New data from Trendforce shows that conventional DRAM contract prices are expected to increase between 58% and 63% quarter over quarter, while NAND Flash prices could increase by as much as 70% to 75%.
A major factor behind these increases is the continued expansion of AI infrastructure, which is pulling capacity away from consumer markets.
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AI demand is reshaping supply priorities
Vendors are reallocating production to high-margin server applications, including enterprise SSDs and high-capacity memory modules used in AI systems.
This shift tightens the availability of consumer-grade components, forcing buyers to compete for reduced supply.
Demand for enterprise SSDs has shown little sign of abating as large-scale AI deployments continue to expand.
Storage in the cloud service providers are reportedly willing to accept higher prices and secure long-term agreements to guarantee access to critical components.
This dynamic strengthens supplier leverage, allowing them to maintain elevated price levels despite weaker demand in traditional markets.
While suppliers are increasing production through process improvements and higher density technologies, overall capacity growth remains limited.
A meaningful expansion is not expected until late 2027 or 2028, leaving an extended 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 appears to be similarly constrained.
Although demand for smartphones has weakened, demands for high-speed memory powered by AI capabilities remain stable.
Automotive and industrial sectors have also contributed to demand recovery, further complicating supply allocation decisions.
As a result, some categories, notably eMMC and UFS, face particularly tight supply gaps with corresponding price increases.
The effects of limited supply are visible across almost all memory categories.
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 slowed, reduced shipments have kept prices high by limiting availability.
Retail buyers are responding to these conditions by adjusting purchasing strategies, with some choosing to restock in anticipation of further increases.
However, rising costs are also suppressing demand in segments such as memory cards and USB storage, where margins are already tight.
Interestingly, the conflict between the US, Israel and Iran, which is widely expected to disrupt supply chains and potentially push prices higher, was not factored into the current projections.
“Our analysts have not included the regional conflict in their current pricing models as there has been no significant memory supply disruption observed at this stage,” TrendForce told TechRadar Pro.
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