Nvidia's Memory Chip Shift Could Double Server Prices by 2026

Nvidia chip shift to smartphone-style memory to double server-memory prices by end-2026 - Counterpoint

BEIJING, Nov 19 (Reuters) - Nvidia's (NVDA.O), opens new tab move to use smartphone-style memory chips in its artificial intelligence servers could cause server-memory prices to double by late 2026, according to a report published on Wednesday by Counterpoint Research. In the past two months, electronics supply chains around the world have been hit by a shortage of legacy memory chips as manufacturers turned their focus to high-end memory chips suited to semiconductors designed for AI applications. Sign up here. But Counterpoint, a technology-focused market research firm, said there is a new problem on the horizon. Nvidia recently decided to reduce AI server power costs by changing the kind of memory chip it uses to LPDDR, a type of low-power memory chip normally found in phones and tablets, from DDR5, which are typically used in servers. Nvidia is scheduled to release its earnings report later on Wednesday. Because each AI server needs more memory chips than a handset, the change is expected to create sudden demand that the industry is not equipped to handle, according to Counterpoint. Memory suppliers like Samsung Electronics (005930.KS), opens new tab, SK Hynix (000660.KS), opens new tab and Micron (MU.O), opens new tab are already facing shortages of older dynamic random-access memory products after reducing production to focus on high-bandwidth memory, which is necessary to make the advanced accelerators that power the global AI boom. Counterpoint said tightness at the low end of the market is at risk of spreading upward as chipmakers weigh whether to divert more factory capacity to LPDDR to meet Nvidia's needs. "The bigger risk on the horizon is with advanced memory, as Nvidia's recent pivot to LPDDR means they're a customer on the scale of a major smartphone maker - a seismic shift for the supply chain which can't easily absorb this scale of demand," Counterpoint said. The firm said it expected prices for server-memory chips to double by the end of 2026. Higher server-memory prices would raise costs for cloud providers and AI developers, potentially adding pressure to data-centre budgets that are already stretched by record spending on graphics processing units and power upgrades. Reporting by Eduardo Baptista; Editing by Thomas Derpinghaus Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia shift to smartphone-style memory could double server-memory prices by end-2026

Nvidia's move to use smartphone-style memory chips in its artificial intelligence servers could cause server-memory prices to double by late 2026. Because each AI server needs more memory chips than a handset, the change is expected to create sudden demand that the industry is not equipped to handle, according to Counterpoint. Nvidia's move to use smartphone-style memory chips in its artificial intelligence servers could cause server-memory prices to double by late 2026, according to a report published on Wednesday by Counterpoint Research. In the past two months, electronics supply chains around the world have been hit by a shortage of legacy memory chips as manufacturers turned their focus to high-end memory chips suited to semiconductors designed for AI applications. But Counterpoint, a technology-focused market research firm, said there was a new problem on the horizon. Nvidia recently decided to reduce AI server power costs by changing the kind of memory chip it uses to LPDDR, a type of low-power memory chip normally found in phones and tablets, from DDR5 chips, which are typically used in servers. Because each AI server needs more memory chips than a handset, the change is expected to create sudden demand that the industry is not equipped to handle, according to Counterpoint. Because each AI server needs more memory chips than a handset, the change is expected to create sudden demand that the industry is not equipped to handle, according to Counterpoint. Nvidia is scheduled to release its earnings report later on Wednesday. Memory suppliers like Samsung Electronics, SK Hynix and Micron are already facing shortages of older dynamic random-access memory products after reducing production to focus on high-bandwidth memory, which is necessary to make the advanced accelerators that power the global AI boom. Counterpoint said tightness at the low end of the market was at risk of spreading upward as chipmakers weigh whether to divert more factory capacity to LPDDR to meet Nvidia's needs. "The bigger risk on the horizon is with advanced memory, as Nvidia's recent pivot to LPDDR means they're a customer on the scale of a major smartphone maker - a seismic shift for the supply chain which can't easily absorb this scale of demand," Counterpoint said. The firm said it expected prices for server-memory chips to double by the end of 2026. It also forecast that overall memory chip prices were likely to rise 50% from current levels through the second quarter of 2026. Higher server-memory prices would raise costs for cloud providers and AI developers, potentially adding pressure to data-centre budgets that are already stretched by record spending on graphics processing units and power upgrades.

NVIDIA's Shift to Consumer-Grade LPDDR For AI Servers Could Spell Massive Trouble for Buyers, as It Could Send PC and Mobile Prices Skyrocketing

It appears that NVIDIA is making a drastic change within the AI memory supply chain, as the firm is now looking to integrate LPDDR modules into AI servers, switching from the traditional DDR technology. Memory modules have now entered the 'era of shortages', driven by massive DRAM demand the industry has been witnessing for the past few months, and initially, it was estimated that the impact wouldn't be too much considering that DRAM capacity was in the phase of expansion; however, it appears that the datacenter buildout has reached new levels. This has prompted manufacturers like NVIDIA to make drastic decisions, one of them being the use of LPDDR memory type for AI servers. Based on what Counterpoint Research has disclosed, this move will trigger a 'seismic shift'. The bigger risk on the horizon is with advanced memory as NVIDIA's recent pivot to LPDDR means it is a customer on the scale of a major smartphone maker -- a seismic shift for the supply chain which can't easily absorb this scale of demand. - Counterpoint As far as memory prices are concerned, it is reported that they are expected to rise by up to 50% within just a few quarters, adding on to the already-estimated 50% YoY increase, which means that within a span of a few months, we are looking at a gigantic 100% rise. One of the main reasons why NVIDIA intends to switch to LPDDR memory over the traditional DDR5 solutions is that it is a more power-efficient platform, and at the same time, features effective "error correction" mechanisms. While for the AI industry, this is an optimistic move, for consumers, this is another trouble. LPDDR5 and higher-level models have seen widespread adoption in the PC and mobile supply chains, particularly in modern-day smartphones. And more importantly, the capacity that NVIDIA requires is significantly higher compared to what memory suppliers can offer to the company, which means that the supply chain will remain in a 'highly constrained' scenario for months to come. With this, it would not be incorrect to say that HBM, DDR, LPDDR, GDDR, and even RDIMM modules will be in short supply, affecting every user out there. We hope that the memory markets will rapidly adjust to the evolving supply chain situation, but from the looks of it, it will take several quarters before things return to normal.

Nvidia's Smartphone-Style Memory Shift To Trigger A 100% Price Surge In Server Memory By 2026: Report - Samsung Electronics Co (OTC:SSNLF), NVIDIA (NASDAQ:NVDA)

The decision by Nvidia Corp (NASDAQ:NVDA) to integrate smartphone-style memory chips into its AI servers could potentially double the prices of server memory by the end of 2026, according to a report. Demand Spike Pressures Market The move by Nvidia to use Low-Power Double Data Rate (LPDDR) memory chips, commonly found in smartphones and tablets, instead of the traditional DDR5 chips used in servers, is expected to cause a surge in demand that the industry may not be equipped to handle, according to a Counterpoint Research report on Wednesday. "..a seismic shift for the supply chain which can't easily absorb this scale of demand," wrote Research Director MS Hwang. This shift comes amid a global shortage of legacy memory chips, with manufacturers prioritizing advanced AI-ready components. Nvidia's sudden surge in demand for LPDDR chips could strain the already tight supply chain even further. Counterpoint Research cautioned that the low-end shortage could move up the market as chipmakers weigh shifting more production to LPDDR to support Nvidia's demand. The firm expects this pivot could drive server-memory chip prices to double by late 2026. "2x increase in DRAM module prices for DDR5 64GB RDIMM across Q1 2025 to the end of 2026 in a highly constrained scenario," stated Hwang. See Also: Elon Musk Back At White House For Trump's Dinner With Saudi Crown Prince In First Visit Since Public Feud AI Chip Demand Triggers Global Shortage The global semiconductor industry has been experiencing significant disruptions due to the increasing demand for AI-related chips. In response to the AI boom, Samsung Electronics (OTC:SSNLF) hiked its key memory chip prices by up to 60% in September, triggering a global shortage. This crisis has led to a "panic ordering" situation across the industry. Meanwhile, SK Hynix, a major supplier to Nvidia, has sold out its chip supply for 2026, driven by the AI boom, and is planning to increase investments. This surge in demand for AI-related chips has created a "super cycle" in the memory chip industry, leading to record profits for key suppliers like SK Hynix. Recently, Billionaire Peter Thiel fully exited his Nvidia stake and sharply reduced his Tesla (NASDAQ:TSLA) holdings, reflecting what appears to be rising concern over a potential AI market bubble. Benzinga's Edge Rankings place Nvidia in the 98th percentile for growth and the 3rd percentile for value, reflecting a mixed performance profile. Check the detailed report here. Nvidia is set to report its third-quarter earnings after market close on Wednesday. Price Action: On a year-to-date basis, Nvidia stock climbed 31.13%. On Tuesday, it fell 2.81% to close at $181.36. READ NEXT: Elon Musk Says This Is When Tesla Will Have Its Nvidia Moment: 'Major Valuation Change...' Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$183.351.10%OverviewSSNLFSamsung Electronics Co Ltd$65.2154.0%TSLATesla Inc$403.860.65%Market News and Data brought to you by Benzinga APIs

Nvidia shift to smartphone-style memory could double server-memory prices by end-2026

BEIJING -- Nvidia's move to use smartphone-style memory chips in its artificial intelligence servers could cause server-memory prices to double by late 2026, according to a report published on Wednesday by Counterpoint Research. In the past two months, electronics supply chains around the world have been hit by a shortage of legacy memory chips as manufacturers turned their focus to high-end memory chips suited to semiconductors designed for AI applications. But Counterpoint, a technology-focused market research firm, said there was a new problem on the horizon. Nvidia recently decided to reduce AI server power costs by changing the kind of memory chip it uses to LPDDR, a type of low-power memory chip normally found in phones and tablets, from DDR5 chips, which are typically used in servers. Because each AI server needs more memory chips than a handset, the change is expected to create sudden demand that the industry is not equipped to handle, according to Counterpoint. Nvidia is scheduled to release its earnings report later on Wednesday. Memory suppliers like Samsung Electronics, SK Hynix and Micron are already facing shortages of older dynamic random-access memory products after reducing production to focus on high-bandwidth memory, which is necessary to make the advanced accelerators that power the global AI boom. Counterpoint said tightness at the low end of the market was at risk of spreading upward as chipmakers weigh whether to divert more factory capacity to LPDDR to meet Nvidia's needs. "The bigger risk on the horizon is with advanced memory, as Nvidia's recent pivot to LPDDR means they're a customer on the scale of a major smartphone maker - a seismic shift for the supply chain which can't easily absorb this scale of demand," Counterpoint said. The firm said it expected prices for server-memory chips to double by the end of 2026. It also forecast that overall memory chip prices were likely to rise 50 per cent from current levels through the second quarter of 2026. Higher server-memory prices would raise costs for cloud providers and AI developers, potentially adding pressure to data-center budgets that are already stretched by record spending on graphics processing units and power upgrades.

Nvidia chip shift to smartphone-style memory to double server-memory prices by end-2026 - Counterpoint

BEIJING (Reuters) -Nvidia's move to use smartphone-style memory chips in its artificial intelligence servers could cause server-memory prices to double by late 2026, according to a report published on Wednesday by Counterpoint Research. In the past two months, electronics supply chains around the world have been hit by a shortage of legacy memory chips as manufacturers turned their focus to high-end memory chips suited to semiconductors designed for AI applications. But Counterpoint, a technology-focused market research firm, said there is a new problem on the horizon. Nvidia recently decided to reduce AI server power costs by changing the kind of memory chip it uses to LPDDR, a type of low-power memory chip normally found in phones and tablets, from DDR5, which are typically used in servers. Nvidia is scheduled to release its earnings report later on Wednesday. Because each AI server needs more memory chips than a handset, the change is expected to create sudden demand that the industry is not equipped to handle, according to Counterpoint. Memory suppliers like Samsung Electronics, SK Hynix and Micron are already facing shortages of older dynamic random-access memory products after reducing production to focus on high-bandwidth memory, which is necessary to make the advanced accelerators that power the global AI boom. Counterpoint said tightness at the low end of the market is at risk of spreading upward as chipmakers weigh whether to divert more factory capacity to LPDDR to meet Nvidia's needs. "The bigger risk on the horizon is with advanced memory, as Nvidia's recent pivot to LPDDR means they're a customer on the scale of a major smartphone maker - a seismic shift for the supply chain which can't easily absorb this scale of demand," Counterpoint said. The firm said it expected prices for server-memory chips to double by the end of 2026. Higher server-memory prices would raise costs for cloud providers and AI developers, potentially adding pressure to data-centre budgets that are already stretched by record spending on graphics processing units and power upgrades. (Reporting by Eduardo Baptista; Editing by Thomas Derpinghaus)