- Counterpoint Research says the DRAM market has grown by more than 30% in value for two quarters in a row.
- Gartner expects PC prices to rise 17% this year.
- PC solid-state drives have doubled or tripled in price since December.
None of this is happening in a vacuum. Nvidia and other AI buyers are still scaling up infrastructure, and the more they spend on accelerators and servers, the more memory they need to feed them. That keeps pricing power on the side of chipmakers for now, even if PC buyers are the ones feeling the sting first.
Why supply will stay tight
Building new memory capacity is slow business: it takes at least two and a half years to bring a new facility online. That lag matters because even if suppliers want to ship more, they cannot flood the market quickly enough to crush prices the way they have in past cycles.
Long-term supply contracts are also becoming more attractive, with deals running three to five years and often carrying large upfront payments. Those advance payments help fund the very factories needed to relieve the shortage – a neat trick for chipmakers, and a mildly annoying one for everyone buying laptops.
Micron and SK hynix are already planning to spend tens of billions of dollars on new memory plants in the US and Asia. The bigger question is whether the industry can add enough capacity before AI demand cools, or whether this is the new normal for the rest of the decade.
Memory chips are getting a rare kind of luxury treatment: prices are rising, demand is still outrunning supply, and Wall Street is betting that the boom won’t fade anytime soon. Melius Research now expects the pressure on DRAM and NAND to last through the end of the decade, helped by generative AI and the huge appetite of data-center buyers.
That is a sharp break from the old semiconductor cycle, where memory makers bounced between fat profits and painful losses. This time, the AI buildout is acting like a giant sponge, soaking up every extra chip the industry can make.
Micron and Sandisk are already riding the wave
Micron climbed 5.6% yesterday after Melius Research said the stock could gain another 41% over the next 12 months. That call lands after a staggering rise of more than 550% over the previous year, with Micron’s market value now approaching $600 billion.
Sandisk got a similar vote of confidence. The NAND specialist rose 8.1% as Melius projected a further 36% increase over the next 12 months, following a 3,000% rally last year that pushed its capitalization above $157 billion. If that sounds overheated, it probably is – but the market is rewarding anyone with actual supply in a shortage.
Prices are still moving up across the chain
- Counterpoint Research says the DRAM market has grown by more than 30% in value for two quarters in a row.
- Gartner expects PC prices to rise 17% this year.
- PC solid-state drives have doubled or tripled in price since December.
None of this is happening in a vacuum. Nvidia and other AI buyers are still scaling up infrastructure, and the more they spend on accelerators and servers, the more memory they need to feed them. That keeps pricing power on the side of chipmakers for now, even if PC buyers are the ones feeling the sting first.
Why supply will stay tight
Building new memory capacity is slow business: it takes at least two and a half years to bring a new facility online. That lag matters because even if suppliers want to ship more, they cannot flood the market quickly enough to crush prices the way they have in past cycles.
Long-term supply contracts are also becoming more attractive, with deals running three to five years and often carrying large upfront payments. Those advance payments help fund the very factories needed to relieve the shortage – a neat trick for chipmakers, and a mildly annoying one for everyone buying laptops.
Micron and SK hynix are already planning to spend tens of billions of dollars on new memory plants in the US and Asia. The bigger question is whether the industry can add enough capacity before AI demand cools, or whether this is the new normal for the rest of the decade.