The price of memory chips has soared 400%! France and Pakistan: Giants discontinue production of old models Micron (MU.US) and Sandisk (SNDK.US) directly benefit from global demand

According to the Zhitong Finance App, BNP Paribas said that as artificial intelligence (AI) pushes the memory industry into a “historic upward cycle,” Micron Technology (MU.US) and Sandisk (SNDK.US) are expected to continue to benefit. The bank's analyst Karl Ackerman (Karl Ackerman) said in a customer report: “As consumer-grade DRAM and NAND TLC spot prices rose 408% and 165%, respectively, year-on-year in November, we believe DRAM and NAND are entering a historic upward cycle that may continue through 2026. We continue to be optimistic about the memory and storage supply chain, but companies with a higher share of the data center business will perform better.”

After in-depth analysis, Ackman said that the average sales price of DRAM is expected to rise 35% month-on-month in the fourth quarter and 10% month-on-month in the first quarter of 2026. He added that according to recent research, this is mainly due to continued supply constraints. NAND is in a similar situation. Prices are expected to rise 15% in the fourth quarter and 7% in the next quarter.

Ackman explained, “Since 1999, the average upward cycle of DRAM has continued for 8 months, with an average price increase of 53% from trough to peak, while the average upward cycle of NAND usually lasts 6 months, with an average price increase of 40%. Currently, the DRAM upward cycle has entered its 5th month, and the average sales price has risen 55% from the bottom; the NAND upward cycle has entered its 4th month, and the average sales price has risen 51% from the bottom. However, we expect this upward cycle to be more sustainable for both DRAM and NAND. We have observed huge spot/contract spreads: DDR4 is 45%, DDR5 is 89%, 256Gb TLC is 47%, and 512Gb TLC is 9%, which indicates further price increases.”

The memory chip “supercycle” has arrived! Supply shortages may continue until 2026

After ChatGPT was released in November 2022 and sparked a boom in generative AI and the global boom in AI data center construction, memory chip makers began allocating more production capacity to high-bandwidth memory (HBM) chips.

Competition for mature chips from Chinese rivals is becoming increasingly intense, prompting two companies, Samsung and SK Hynix, which control about 70% of the global DRAM chip market, to accelerate the shift to high-end chips. Since the beginning of 2025, these manufacturers have gradually adjusted their strategies, gradually reducing and even planning to completely stop the production of DDR4 memory particles from the end of 2025 to the beginning of 2026, and completely shift production capacity to more profitable and technologically advanced products such as DDR5 and HBM.

Morgan Stanley expects tech giants including Google, Amazon, Meta, Microsoft, and CoreWeave to invest $400 billion in artificial intelligence infrastructure this year. This boom in AI also coincides with traditional data centers and personal computers entering a new renewal cycle. Analysts pointed out that combined with mobile phone sales exceeding expectations, this together exacerbated the tight supply of non-HBM memory chips and boosted their prices.

According to reports, taking 4GB DDR4X as an example, the particle spot market rose 3-4 times from a low of 7 US dollars/piece at the beginning of this year to more than 30 US dollars/piece in mid-November; using 64G eMMC as an example, flash memory rose nearly 1.5 times from 3.2 US dollars/piece at the beginning of the year to over 8 US dollars/piece recently. Also, as demand for eSSD from overseas AI servers increased, NAND flash memory followed DRAM particles and began to rise sharply in price.

As the supply of ordinary memory chips has tightened, the global memory chip industry seems to be entering what many analysts call a “supercycle,” and equipment manufacturers are frantically hoarding memory chips. Tobey Gonnerman, president of semiconductor distributor Fusion Worldwide, said, “Demand has surged in the past month or two. The market is indeed changing amazingly fast. The rush to buy is intensifying and will continue to escalate. Customers generally adopt a double/triple order strategy, which is similar to the situation when there were many shortages in the past.”