Memory prices surge as AI demand triggers supply crisis, threatening budget devices worldwide

Spiralling memory spot prices could trigger 'industry cycle collapse,' report warns -- NAND wafer costs surge 25% in a single month

DDR5 and NAND posted the sharpest monthly gains, with contract price forecasts pointing to further increases ahead. Memory spot prices rose broadly in February 2026, with NAND flash wafer costs leading the way, according to DigiTimes market data compiled this month. Amidst the report of specific increases, the article warns that the increasing gap between demand and supply of memory is driving "rapid" spot price increases and procurement capital pressures, which, if continued, could lead to an "industry cycle collapse." DDR5 16G (2Gx8) chips averaged $39, up 7.4% month-over-month, while 1Tb TLC flash wafers jumped 25% to $25 -- the steepest single-month gain reported. These increases came despite a Lunar New Year slowdown that briefly cooled trading activity in mid-February, with spot markets rebounding once the holiday passed. DDR4 posted more mixed results, with the 16Gb (2Gx8) variant holding nearly flat, rising just 0.26% to $78.10, while the 8Gb (1Gx8) gained 6.8% to $33. DDR3 4Gb (512Mx8) chips rose 7.5% to $5.70. The slower DDR4 gains reflect a moderation from the 20-30% monthly increases seen across DRAM products in January, though market DigiTimes says this pullback is "partly seasonal rather than a sign of easing structural pressure." The February spot data comes against a backdrop of sharply higher contract price forecasts, with TrendForce revising its Q1 2026 conventional DRAM contract price outlook upward in early February, raising its estimate from a prior 55-60% quarter-over-quarter increase to 90-95%. PC DRAM is now projected to more than double quarter-over-quarter, which TrendForce described as a new quarterly record. Meanwhile, NAND flash contract prices are forecast to rise 55-60% QoQ, also revised up from an earlier 33-38% estimate. We're all aware at this point that it's AI infrastructure that's driving these increases, having continued to pull memory capacity toward server DRAM and high-bandwidth memory, leaving conventional DRAM and consumer NAND segments undersupplied. North American cloud service providers have been pulling forward orders since late 2025, locking in allocations and pushing other buyers down the priority queue. TrendForce noted that even tier-1 PC OEMs with secured supplier allocations have seen inventory levels decline. On the NAND side, the February spot jump extends a troubling, longer-term trend. According to DigiTimes, which cited ChinaFlashMarket data, 1Tb QLC/TLC flash wafer prices have roughly tripled since October 2025, with 512Gb TLC prices up nearly fivefold over the same period. This is because suppliers have been redirecting capacity toward enterprise SSDs, where margins are higher, limiting wafer availability for module makers and sustaining upward pressure across the category. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Memory price hikes will kill off budget PCs and smartphones

Analyst warns soaring DRAM and NAND costs could push entry-level devices out of reach Ballooning memory prices are forecast to kill off entry-level PCs, leading to a decline in global shipments this year - and a similar effect is going to hit smartphones. Analyst biz Gartner is projecting a drop in PC shipments of more than 10 percent during 2026, and a decline of around 8 percent for smartphones, all due to the AI-driven memory shortage. Some types of memory have doubled or quadrupled in price since last year, and Gartner believes DRAM and NAND flash used in PCs and phones is set for a further 130 percent rise by the end of 2026. The upshot of this is that the budget PC will disappear, simply because vendors won't be able to build them at a price that will satisfy cost-conscious buyers, according to Gartner research director Ranjit Atwal. "Because the price of memory is increasing so much, vendors lose the ability to provide entry-level PCs - those below about $500," he told The Register. PC makers could just raise the price of their cheap and cheerful boxes to above that level to compensate for the memory hike, however, price-sensitive buyers simply won't bite, he added. Another factor expected to add to declining fortunes of the PC industry this year is AI devices - systems equipped with special hardware for accelerating AI tasks, typically via a neural processing unit (NPU) embedded in the CPU. These systems were predicted to take the market by storm, but they require more memory to support AI processing and vendors like to mark them up to a premium price. "Historically, downgrading specifications was the way to go when prices were being squeezed, but that's difficult here," Atwal said. For example, Microsoft requires a minimum of 16 GB for Copilot+ PCs, its own AI platform spec, and Gartner recommends at least 32 GB for new enterprise PCs. "The thinking was that the average price [of AI PCs] would fall this year, and lead to more adoption," said Atwal, "but that's not happening." The lack of killer applications isn't helping either. In any case, buyers are still looking more at the traditional attributes of price, battery life, and performance rather than AI capabilities when sourcing a new PC, as we reported earlier this year. HP revealed in its latest earnings on Tuesday that 35 percent of the PCs it now sells are AI PCs, but these models were supposed to be dominating the market by this time, and expected to comprise virtually every system you could purchase by next year. The memory price hike is complicating this. HP disclosed that DRAM now accounts for 35 percent of the PC build cost, up from between 15 and 18 percent last quarter, and it expects this proportion to increase during the rest of the calendar year. For this reason, AI PCs are likely to remain in the premium bracket, and Atwal predicts they won't make up more than 50 percent of the market until 2028. As a result, systems without NPUs will stick around for longer. On the back of rising costs, Gartner expects more corporate and home buyers to sweat their assets for longer and hold off refreshing their PCs. As a result, the lifetime of systems is set to increase by 15 percent within businesses and 20 percent for consumers. However, anyone considering a refresh should buy now, as prices are only going to inflate and likely stay up until at least the end of next year. With smartphones, vendors have more margin to play with, and so can be more flexible, according to Atwal, but he still sees entry-level models going the same way as the budget PC. "The increase in memory prices means entry phones will become more expensive, but premium devices are likely to go up less," he said. As a result, the price advantage enjoyed by budget smartphones will shrink, leading some buyers to move upmarket while others will simply hold off purchasing. Similar predictions were made in a report last month, which said low-cost phone makers will be hardest hit by the memory crisis, as memory and storage costs make up a higher share of their bill of materials. "The end result is that you are losing choice in the marketplace," Atwal said. "What we have here is a fairly unique situation," he explained. "Usually when memory prices shoot up, it is because of production issues constraining supply. Here, it is demand-side pressure from hyperscalers pushing up memory costs for PCs and smartphones." Unlike earlier boom-bust cycles in the memory industry, in which prices rise and fall in line with inventories, this shortage is likely to be long-lasting, and could extend through to the end of 2027, Atwal warned. ®

DDR5 RAM prices tripled in six months, and nobody is talking about when they'll come back down

Abhinav pivoted from a career in banking to pursue his first love in writing. Even while working full-time, he continued contributing as an editor-at-large, a role he has held for more than 7 years. A lifelong tech enthusiast who has built three gaming and productivity powerhouse PCs since 2018, his passion for technology keeps him closely following the semiconductor industry, from NVIDIA and AMD to ARM. His MSc dissertation explored how artificial intelligence will reshape the future of work, reflecting his curiosity about the wider social impact of emerging technologies. The PC hardware market is caught in a perfect storm. As recently as July 2025, a 32GB DDR5 kit would set you back a reasonable $95, perhaps $80 if you didn't care for RGB. By January 2026, the same kit cost anywhere between $350 and $600. In Europe, prices peaked in early February at a staggering €430 to €490, which are numbers that would have seemed inconceivable just months prior. So, what exactly has caused prices to hit the stratosphere? Hardware enthusiasts are no strangers to the occasional pricing surge, and the GPU market has made that abundantly clear. But for an inflation cycle to last so long without market correction, a fundamental economic and technological shift needs to be at play. Between the insatiable appetite of the AI industry and the abrupt exit of key consumer players, the future of affordable memory hands in precarious balance. That does leave us with one pressing question. When will DDR5 RAM prices drop? Analysts can't seem to reach a consensus The reason why the current pricing crisis feels different and more persistent from the cyclical fluctuations of the past is because consumers are now in a zero-sum game against the expanding AI industry. According to IDC analysts, this is no longer merely a lopsided case of demand massively outweighing supply, but a "potentially permanent" reallocation of global silicon wafer capacity. If it is believed, then this would suggest that the price floor for memory has been raised for a long term as production priority will favor high-margin enterprise clients. The impact has already been experienced in the broader tech sector. Gartner has projected the total device spending (including PCs, smartphones and tablets) to reach $836 billion this year, yet warned of a growth slowdown to 6.1% due to "rising memory prices". There is growing skepticism among financial analysts regarding the profitability of AI, but contrary to the popular narrative, the idea that the "AI bubble" burst would return memory prices to normal seems to be pure fiction. This is because the "Big 3" memory manufacturers, Samsung Electronics, SK Hynix and Micron are already aiming to aggressively expand High-Bandwidth Memory (HBM) production. While SK Hynix has already made a $15 billion investment to achieve its target, Micron has abandoned its consumer-focused brand entirely, with Crucial ceasing retail operations later this month. Since HBM uses roughly three times the wafer capacity as DDR5 and is procured at higher contract prices, consumers bear the ultimate cost in the supply chain. There are, however, intersperses of silver linings. Micron has committed $10 billion towards a new DRAM facility that can help alleviate the supply constraint, but it isn't expected to be operational until 2028. The analyst discourse has largely shifted from "when will prices return to normal" to "by what extent can the prices come down", and consumers are left navigating this economy that has left them estranged from the era of affordable devices. Micron says quitting the DIY memory industry will actually "help consumers" In a recent interview, a Micron executive said that the company still supplied DRAM to PC manufacturers like Dell, Asus, and more. Posts 83 By Patrick O'Rourke Have memory prices begun to stabilize? There are some signs of correction, but they are localized geographically The last few weeks of February have introduced a surprising amount of geographical divergence, especially when it comes to the European markets. Tech publications have reported price drops in consumer RAM across the EU, signaling what can be construed as it hitting a temporary 'ceiling'. Tom's Hardware cited data from a price tracking platform, CamelCamelCamel, reporting signs of 'market correction' and price reduction across a variety of consumer RAM SKUs this week. It's important to know that, while a welcome change, this stabilization seems to be far from being a global trend. In the United States, the correction seems to be almost non-existent. However, going by the data, prices seem to be reaching stagnation. It is also important to note that the fluctuation shows only marginal, week-to-week volatility instead of a downward trend simply because there isn't one. The "root cause", which is the supply chain constraint, continues to persist. This is no longer merely a lopsided case of demand massively outweighing supply, but a "potentially permanent" reallocation of global silicon wafer capacity. There may not be a "return to normal" on the 2026 roadmap Consumer market is undergoing a rapid shift, and most of it is unfavorable As we move into 2026, the prospect of memory returning to 2024 pricing seems increasingly bleak and an overwhelming amount of evidence suggests that such a turn is not guaranteed. As Crucial ceases shipments by the end of fiscal Q2, the exit will remove a critical competitive force responsible for maintaining the price floor in the market, and this void is not likely to be filled by alternatives. Tech analysts hoping that Chinese manufacturers might act as a "budget savior" in this paradigm also find themselves disappointed. WCCFTech recently reported that listings on Chinese retail platforms show KingBank (a Chinese manufacturer using CXMT modules) pricing its products in line with Western brands rather than undercutting them. What's even more concerning is that the "safe haven" offered by older platforms and technology also seems to be vanishing fast. DDR4 pricing is actually accelerating faster than its successor in some regions, further exacerbated by DRAM suppliers ceasing production in favor of the newer and more profitable DDR5 and HBM memory. RAM upgrades may hurt for a long time It may be time for the consumer to come around to the fact that AI demand, shrinking competition and a supply chain reoriented around enterprise profits has fundamentally altered the memory market, and by extension, the consumer PC market. With no meaningful relief expected before 2028, consumers are left with virtually no other option than to patiently wait and watch, or to simply accept the "new normal".

Say goodbye to budget PCs and smartphones - memory is too expensive now - General Chat

Ballooning memory prices are forecast to kill off entry-level PCs, leading to a decline in global shipments this year - and a similar effect is going to hit smartphones. Analyst biz Gartner is projecting a drop in PC shipments of more than 10 percent during 2026, and a decline of around 8 percent for smartphones, all due to the AI-driven memory shortage. A hard disk drive platter with 1s and 0s projected onto it Hard drives already sold out for this year - AI to blame READ MORE Some types of memory have doubled or quadrupled in price since last year, and Gartner believes DRAM and NAND flash used in PCs and phones is set for a further 130 percent rise by the end of 2026. The upshot of this is that the budget PC will disappear, simply because vendors won't be able to build them at a price that will satisfy cost-conscious buyers, according to Gartner research director Ranjit Atwal. "Because the price of memory is increasing so much, vendors lose the ability to provide entry-level PCs - those below about $500," he told The Register. The used market will also sky rocket in price of course.

AI memory crunch forces DRAM market into 'hourly pricing' model, report claims -- small and medium-sized businesses fighting for survival

Over 190,000 small and mid-size electronics companies are being squeezed out of the memory market by AI. Memory prices have begun shifting on an hourly basis as the AI-driven shortage intensifies, according to a DigiTimes report published today, with semiconductor industry insiders warning that smaller firms unable to place immediate orders with upfront payment risk sharply higher quotes within minutes. The report describes a market now split between roughly 100 top-tier buyers with the leverage to secure supply and more than 190,000 small and mid-size enterprises fighting over what remains. The report says that cloud service providers, leading automakers, and smartphone giants Apple and Samsung hold enough financial clout to resist price hikes and maintain priority allocation from memory manufacturers. Samsung, SK hynix, and Micron cannot afford to jeopardize those relationships, so these large customers get served first, while also increasingly requiring prepayment or cash transactions before confirming orders -- terms that smaller firms with little bargaining power will struggle with. According to DigiTimes, these companies began struggling to absorb soaring memory costs in the second half of 2025. As prices continued climbing into 2026, some have started revising demand forecasts downward in what amounts to a "cut losses to survive" strategy. That approach is expected to spread as high prices persist, directly reducing overall market demand for memory. Last month, TrendForce revised its Q1 2026 DRAM contract price forecast upward to a 90-95% quarter-over-quarter increase, with NAND flash up 55-60% over the same period. A separate DigiTimes report published today indicates that DRAM prices could surge a further 70% in Q2 2026, while research firm IDC has warned the shortage could persist well into 2027. HP disclosed last month that DRAM now accounts for 35% of its PC build cost, up from between 15% and 18% a quarter earlier. Meanwhile, Gartner projects PC shipments will drop more than 10% in 2026, and smartphone shipments will fall roughly 8%, both driven by memory costs. IDC expects white-box and lower-tier vendors, including DIY system builders, to bear the heaviest burden. All this raises a question about what happens next if enough SMEs exit the market because they can't afford the premiums. If smaller buyers collectively pull back, tight capacity could soon become oversupply, potentially exposing the shortage as "illusory," says DigiTimes. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Gartner says sub-$500 entry level PCs could disappear by 2028 as memory prices surge

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Forward-looking: The PC has long had a reputation as an expensive machine. According to Gartner, the barrier to entry will be even higher by 2028. That's the year that the research firm says the sub-$500 entry-level PC segment will have completely disappeared, another victim of the AI-driven memory crisis. Writing in a press statement, Gartner warns that soaring memory costs are projected to cause a 10.4% worldwide decline in PC shipments while smartphone shipments are expected to drop by 8.4% in 2026. The company also estimates there will be a 130% surge in combined DRAM and solid-state drive (SSD) prices by the end of 2026, increasing PC prices by 17% and smartphone prices by 13% compared to 2025 levels. These sorts of reports have become depressingly familiar in an age where the impact of the memory crisis is felt daily as manufacturers prioritize the lucrative AI market. But something we haven't seen before is Gartner's warning that the current situation is expected to wipe out an entire product category. In this case, it's entry-level sub-$500 PCs, which it says will disappear by 2028. Buying a PC without a dedicated GPU for under $500 is possible these days. They're often bought by people on a budget who simply want a machine for work or education purposes, using the web on something other than a smartphone, and so on. But with the memory crisis pushing up the BOM for almost everything with a chip in it, budget PCs are becoming more expensive all the time. Eventually, new $500 PCs are expected to go the way of Blockbuster, according to Gartner. Gartner also writes that PC memory costs are expected to peak at 23% of the total bill-of-materials up from 16% in 2025. "This sharp increase removes vendors' ability to absorb costs, making low-margin entry-level laptops nonviable." Ranjit Atwal, Senior Director Analyst at Gartner, predicts that another effect of this crisis will be the higher prices narrowing the range of devices available, which will cause buyers to hold on to their devices for longer, "fundamentally altering upgrade cycles." Because of rising costs, Gartner expects PC lifetimes to increase by 15% for business buyers and 20% for consumers by the end of 2026. It warns that holding on to PCs for longer potentially means more security vulnerabilities and challenges of managing older devices. The more recent effects of the memory crisis include Valve confirming that the Steam Deck OLED is out of stock due to the component shortages/high prices - it's also why the Steam Machine was delayed. Some companies are even offering budget laptops with 1.2TB of storage, even though 1TB of it is actually a free one-year OneDrive cloud storage trial.

Budget PCs (under $500) may go extinct due to AI-driven RAM shortage

Consumers are expected to keep their current computers 20% longer before upgrading due to these significant price increases. Buying a cheap PC may soon become significantly more difficult. According to research firm Gartner, sharply rising memory prices are expected to make computers more expensive in the short term and could cause the entry-level PC market to "disappear" by 2028. The market chaos is largely driven by the growth of AI, with newly planned AI infrastructure gobbling up all the RAM it can get its hands on, leaving little-to-none for the consumer market. Prices for DRAM memory and SSD storage are expected to jump around 130 percent by the end of 2026, driving PC prices up an average of 17 percent. As PCs become more expensive, both businesses and individuals are expected to hold on to their current sysetms for much longer than they might've anticipated. Gartner estimates that consumers may use their computers up to 20 percent longer before upgrading. The budget segment is particularly vulnerable. Gartner believes that PCs in the entry-level range (under $500) may wind down and disappear altogether as early as 2028. At the same time, the development of so-called AI PCs is expected to slow down as higher component costs make it more difficult to produce at reasonable prices.

RAM Crisis GetsWorse : Hits Laptops, Phones & Consoles as HBM Demand Surges

The global RAM shortage is creating ripple effects across the tech industry, with high-bandwidth memory (HBM) at the center of the crisis. As ColdFusion explains, the surging demand for AI data centers, driven by their reliance on HBM to train and operate advanced machine learning models, has left other sectors scrambling to secure adequate supply. Companies like OpenAI have claimed significant portions of the global memory market, forcing manufacturers to prioritize enterprise-grade products over consumer-focused alternatives. This shift has led to rising costs, delayed product launches and growing tension between the needs of AI-driven industries and the broader tech ecosystem. In this investigation, we'll explore how the RAM shortage is reshaping market dynamics and what it means for consumers and businesses alike. Learn about the challenges facing manufacturers as they attempt to balance AI-specific demand with production constraints and discover how supply chain bottlenecks are influencing the availability of consumer electronics. Additionally, gain insight into the economic consequences of this crisis, from price hikes in gaming hardware to the potential long-term impact on innovation and competition. These developments highlight the complexity of addressing a shortage that continues to reshape the global technology landscape. Global RAM Shortage Crisis AI Data Centers: The Core of the Demand Surge AI data centers are at the heart of the current RAM shortage. These facilities require vast amounts of HBM to train and operate large-scale machine learning models, which are integral to advancements in artificial intelligence. Companies like OpenAI and other leading AI developers have secured substantial portions of the global RAM supply, leaving other sectors scrambling to meet their own needs. HBM is uniquely suited to AI applications due to its ability to handle the immense data processing demands of these systems. As a result, manufacturers are prioritizing the production of enterprise-grade memory over consumer-grade alternatives. While this ensures that AI systems can continue to operate efficiently, it exacerbates shortages in other markets, creating a cascading effect that disrupts the broader tech industry. Supply Chain Bottlenecks and Market Dynamics The global RAM market is dominated by three major manufacturers: Samsung, SK Hynix and Micron Technology. Together, these companies account for 93% of global production. In response to the surge in AI-driven demand, they are shifting their focus toward producing AI-specific memory products. This strategic pivot has left significant gaps in the consumer electronics market, where demand for devices like laptops and gaming consoles remains high. Expanding production capacity to address the shortage is not a straightforward solution. Building new manufacturing facilities requires substantial investment and years of development. Manufacturers are hesitant to make such commitments due to concerns about potential overproduction and market saturation once the current demand surge subsides. This cautious approach has left the supply chain vulnerable, with limited flexibility to respond to sudden spikes in demand. Why RAM Prices Are Rising in 2026 Browse through more resources below from our in-depth content covering more areas on AI business. Impact on Consumer Electronics The consumer electronics market is experiencing significant challenges as a result of the RAM shortage. Rising RAM prices have led to increased costs for devices such as laptops, smartphones and gaming consoles. Major companies like Apple, Lenovo and HP are struggling to secure sufficient memory supplies, forcing them to either delay product launches or pass higher costs onto consumers. Gaming hardware is particularly affected. Next-generation gaming consoles, such as the anticipated PlayStation 6 and Xbox, may face delays or price hikes due to limited RAM availability. Similarly, gaming GPUs, which are essential for high-performance computing and gaming, are being deprioritized as manufacturers focus on meeting the demands of AI-driven applications. This shift underscores the growing tension between consumer and enterprise markets, with consumers bearing much of the burden. Economic and Industry-Wide Consequences The economic impact of the RAM shortage is far-reaching. The PC and smartphone markets, already weakened by declining consumer demand, are expected to contract further as higher prices and limited supply deter potential buyers. Some manufacturers may be forced to scale back production or exit the market entirely, reducing competition and potentially slowing innovation. Even industry leaders like Nvidia are adjusting their strategies in response to the shortage. The company has shifted its focus toward data center products, deprioritizing consumer GPUs to meet the needs of AI workloads. This reallocation of resources highlights a broader industry trend, as manufacturers prioritize AI growth at the expense of other sectors. The long-term implications of this shift could reshape the technology landscape, with significant consequences for innovation and market dynamics. China's Growing Role in the RAM Market China is emerging as a potential player in the global RAM market, with manufacturers like ChangXin Memory Technologies (CXMT) working to develop DDR5 memory. However, these efforts are still in their early stages and it will take years for Chinese companies to scale production to levels that can significantly impact global supply. In the short term, existing production commitments and long-term contracts with major players like Samsung and SK Hynix limit the potential for immediate relief. This underscores the challenges of diversifying the supply chain and reducing reliance on a small number of dominant manufacturers. While China's entry into the market could eventually provide greater stability, it is unlikely to address the current crisis in the near future. Broader Implications for the Tech Industry The ongoing RAM shortage has exposed critical vulnerabilities in the global tech supply chain. Over-reliance on a few key manufacturers has created bottlenecks, while geopolitical tensions and trade restrictions add further uncertainty. The insatiable demand for AI hardware raises questions about the sustainability of current growth trends and the industry's ability to adapt to future challenges. Expanding manufacturing capacity to meet demand presents significant environmental and logistical challenges. RAM production is resource-intensive, requiring finite raw materials and energy-heavy processes. These factors complicate efforts to scale production sustainably, highlighting the need for long-term planning and investment in more resilient and diversified supply chains. The shortage also serves as a reminder of the interconnectedness of the global technology ecosystem. As AI continues to drive innovation, its demand for high-bandwidth memory is reshaping priorities across the industry. Addressing these challenges will require strategic planning, sustainable practices and a commitment to supply chain diversification. The lessons learned from this crisis will play a crucial role in shaping the future trajectory of the tech industry, making sure its stability and continued growth in an increasingly complex global economy. Media Credit: ColdFusion Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.