The ongoing memory shortage is proving to be more severe than initially anticipated, with prices for both DRAM and NAND flash memory expected to surge in the first quarter of 2026. This escalation is driven by the increasing demands from AI-driven cloud service providers and hyperscalers, which continue to pressure supply chains.

Early forecasts by TrendForce in January warned of potential DRAM price increases. However, recent revisions indicate these contract prices may rise by an unprecedented 90–95% quarter-over-quarter, with NAND prices climbing 55–60% over the same period.

While AI demand is a key driver, unexpected spikes in PC shipments during Q4 2025 have further strained resources. Large tech OEMs typically purchase memory in advance, allowing them to buffer temporary price hikes. However, with inventories decreasing, future system prices are anticipated to increase significantly as OEMs move to replenish stocks.

Importantly, the surge in demand is not limited to PCs. The industry projects a remarkable rise in LPDDR memory costs, particularly in notebooks and smartphones, marking some of the steepest increases in history for these components.

NAND flash is experiencing a similar surge as hyperscalers and CSPs look to expand their SSD deployments to support AI inference workloads. The demand for high-performance storage far exceeds initial expectations, driven by the need for effective AI application support.

Given the protracted lead times for bringing new memory fabrication plants online, relief from the current price escalation is not anticipated in the immediate future. TrendForce projects high prices persisting through 2028, with prices peaking later this year. As AI infrastructures continue evolving, transitioning from training to inference-dominated models, the demand for DRAM and storage solutions will continue to grow.