DRAM prices surge over 200% as AI demand drains global memory chip supply

The global memory chip market is in the grip of its most extreme supply crunch in decades, with DRAM prices expected to rise more than 200 percent year-on-year as artificial intelligence data centers absorb nearly all available output and new production capacity remains years away.

Dan Kim, chief strategy officer at semiconductor analysis firm TechInsights and former chief economist at the U.S. CHIPS Program Office, described the current market as an eight out of 10 on a scale of intensity — headed for a 10 by early 2027. "We're anticipating an over 200 per cent price increase of DRam" on a year-over-year basis, Kim said in a podcast interview published Friday by the Financial Times. "That is historically unprecedented."ft

A Market With Nothing Left on the Shelf

The shortage is not a typical cyclical squeeze. Kim said that virtually all memory supply has already been spoken for, not only for high-bandwidth memory paired with AI accelerators but across the broader product range. "Practically most of the supply has been sold out," he said, adding that even buyers willing to pay elevated prices are being told manufacturers can only fill a fraction of their orders.ft

Samsung, SK Hynix ↗ 1.92%, and Micron ↗ 2.77% — the three companies that dominate mainstream DRAM production — have reportedly allocated all of their projected 2027 supply as well. SK Hynix CEO Kwak Noh-jung told Reuters in July that 2027 would be "the worst year in the industry's history from the supply perspective," forecasting that demand would exceed production capacity beyond 2030. New fabrication plants under construction in South Korea, Idaho, and China are not expected to begin producing in volume until late 2027 or early 2028.datacenterdynamics+3

Consumer Prices Feel the Pinch

The effects are rippling beyond data centers. Global existing smartphone retail prices have climbed about 15 percent on average so far in 2026, according to Counterpoint Research's Global Smartphone Price Increase Tracker, while new model launches are priced 25 percent higher year-on-year. Gartner estimated earlier this year that combined DRAM and SSD prices would surge roughly 130 percent by the end of 2026, pushing PC prices up 17 percent and smartphone prices up 13 percent compared with 2025 levels. The firm projected worldwide PC shipments would decline 10.4 percent and smartphone shipments would drop 8.4 percent this year.mactech+4

China Looms in the Background

Kim noted that Chinese memory producers YMTC and CXMT are making progress — YMTC now accounts for 10 to 15 percent of global NAND output — but remain constrained by export controls that deny them access to advanced lithography equipment. The United States now represents more than 60 percent of the DRAM market by value, Kim estimated, driven by the concentration of AI infrastructure spending. The question, he said, is what happens in the next down cycle: "How much countercyclical investments can the Chinese make at that point to capture more market share? That would really be the telling sign".ft