Recently, the performance of the memory chip sector has been very eye-catching. The reason behind this is that the explosion of AI demand has led to a sharp rise in prices and tight supply across the industry. This round of market prices is not a short-term speculation behavior, but is supported by very solid and reliable industrial logic.
Explosive growth in industry demand
Major cloud service providers in North America are significantly increasing investment in AI infrastructure. By 2026, the total investment by these companies in related fields is expected to climb to US$600 billion. Huge capital expenditures directly drive huge demand for storage chips, especially server memory and flash memory for data centers.
Since 2024, this investment trend has begun and continues to accelerate. If enterprises want to train and run large models, they must purchase a large number of high-performance storage hardware. This resulted in a sharp increase in orders from server manufacturers and cloud vendors, which were then passed on to the upstream chip link, achieving a definite demand boost.
Memory chip prices fluctuate violently
Due to the influence of supply and demand, the price of the memory chip market will show a shocking increase in 2025. The price increase of the once mainstream model DDR4 memory was close to 2000%. The price of DDR5 and NAND flash memory products has also increased several times. Price increases of this level are relatively rare in the history of the semiconductor industry.
The most critical reason for its sharp surge in price is that the lack of early investment in production capacity coincided with the sudden demand for AI. The memory chip industry is highly cyclical, and manufacturers will reduce capital expenditures when prices are at low levels. In 2025, AI demand will be released intensively, but existing production capacity will not be able to meet it, causing prices to rise rapidly.
The gap between supply and demand will continue to exist in the future
According to predictions made by market analysis institutions, the global memory chip market will still be in short supply in 2026. The demand growth rate of DRAM memory is expected to exceed the supply growth rate by about 5 percentage points, and the situation is similar for NAND flash memory. This shows that the gap between supply and demand will be difficult to bridge in a short period of time.
Specifically for the specific field of servers, the situation is even more prominent. It is estimated that in 2026, the total amount of DRAM and NAND consumed by servers will increase by nearly half compared with 2025. Among them, the demand for memory chips with high bandwidth and high capacity specially designed for AI servers is growing faster and may become the focus of shortage.
Contract prices are expected to continue to rise
The display industry predicts that in the first quarter of 2026, the contract price of memory chips will continue to rise, and the overall increase may reach 30% to 40%. Among them, the increase of DDR5 server memory may exceed 40%, and the price of enterprise-class solid-state drives will also increase significantly.
These forecasts are based on the current negotiation situation in the supply chain. Major chip manufacturers generally show a strong momentum when negotiating new quarter contracts with downstream customers. Given that inventory levels are low and future demand is highly visible, buyers are more willing to accept price increases.
Industrial chain companies benefit significantly
Against this background, many companies in the storage industry chain have shown active market performance. Starting from the chip design link, all the way to the manufacturing link, and then to the distribution link, the revenue and profit expectations of related companies have been raised. The capital market reacted very quickly to this situation. Within this sector, the stock prices of many companies have risen significantly.
From the perspective of storage module manufacturers and brands, increasing product prices can directly improve gross profit margins. At the same time, distributors with stable supply and long-term customer relationships can also benefit from it. The profitability of all links in the industry chain is expected to improve overall in 2026.
Key points for investors to pay attention to
Focusing on the continued industry boom, investors should pay attention to several key points. First, whether the production capacity expansion plans formulated by major memory chip manufacturers can be successfully realized as scheduled; second, what is the actual growth rate of AI server shipments; third, whether high prices will in turn inhibit some demand.
The speed of technology iteration is also worthy of attention. The penetration rate of DDR5 memory is increasing rapidly. Products with higher performance are likely to bring new growth points. The recovery of demand for downstream applications such as smartphones and personal computers will also have an impact on the overall supply and demand balance.
How long do you think the price increase of memory chips will continue this time? Which type of company is most likely to gain the greatest benefits from this wave of market conditions? You are welcome to share your views in the comment area. If you feel that the analysis is enlightening, please like it to support it.
