AI Boom Sparks Decade-Long RAM and SSD Shortage, Driving Prices Skyward

Reviewed byNidhi Govil

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The surge in AI technology is causing a severe shortage in DRAM and NAND flash memory, leading to predictions of high prices for RAM and SSDs lasting up to a decade. This shortage is driven by the increasing demand from AI data centers and the shift from HDDs to SSDs.

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AI's Insatiable Appetite for Memory

The rapid growth of artificial intelligence (AI) is reshaping the hardware landscape, particularly in the realm of memory and storage. As AI models become increasingly complex, their demand for RAM and SSDs has skyrocketed, leading to a global supply crunch that experts warn could last for up to a decade

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The Scale of AI's Impact

The impact of AI on the memory market is staggering. Some AI projects are reportedly consuming up to 40% of global DRAM output

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. OpenAI alone has signed a deal with Samsung and SK Hynix for 900,000 DRAM wafers per month, potentially accounting for 40% of current global DRAM production

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Shift from HDDs to SSDs

The storage landscape is undergoing a significant transformation. Pua Khein-Seng, CEO of Phison Electronics Corporation, notes that in 2020, the ratio of SSDs to HDDs in data centers was less than 10% to over 90%. Today, it's about 20% to 80%, and the trend is expected to continue until SSDs account for 80% to 100% of data center storage

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Supply Chain Challenges

The memory shortage is exacerbated by several factors:

  1. Manufacturers scaled back production during the 2022-2023 market slowdown

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  2. Focus has shifted to high-margin memory segments like High Bandwidth Memory (HBM) for specialized AI applications

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  3. Building semiconductor fabrication plants is time-consuming and expensive

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  4. Geopolitical tensions and skilled labor shortages further complicate production

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Market Impact and Future Outlook

The effects of this supply-demand imbalance are already visible. Contract prices for DRAM and NAND flash surged by 15-20% in late 2025

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. Samsung's next-gen V9 3D NAND memory is nearly booked out before full release, and Micron's High Bandwidth Memory production is almost sold out through the end of 2026

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Phison's CEO predicts a 'severe' NAND flash shortage starting in 2026, potentially lasting for a decade

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. This 'supercycle' of storage and memory demand could significantly impact both consumer and enterprise markets, potentially ending the era of affordable storage upgrades

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However, it's worth noting that some observers are betting on an AI crash, with concerns about a possible 'trillion dollar' AI bubble

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. The ultimate outcome remains uncertain, but the current trajectory suggests a challenging landscape for memory and storage markets in the coming years.

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