Powerchip raises DRAM prices 45% amid deepening shortage

Taiwan's Powerchip Semiconductor Manufacturing Corp announced this month that it is hiking DRAM prices by 45%, warning that the structural supply shortage driving the increase could persist into 2027 and that further price increases remain possible. The company also raised prices of power-management and display-driver chips by 10 to 15%, effective immediately.taipeitimes

Earnings Show Strong Revenue Recovery

The price increases came alongside Powerchip's Q2 2026 earnings briefing, which showed revenue surging 27% sequentially and 53% year-over-year. Gross margin improved to 28%, and the company's cash reserves rose sharply, though net income declined 77% from the prior quarter. Capital expenditure for 2026 is set at $488 million. JPMorgan upgraded the stock to "overweight" in June, raising its price target to NT$100 and forecasting gross margins could reach 47% by end of 2027 as memory and logic foundry pricing continues to climb.tradingview+1

Industry-Wide Shortage Deepens

Powerchip's warning aligns with an increasingly grim industry consensus. SK Hynix CEO Kwak Noh-jung told Reuters last week that 2027 will be "the worst year in the industry's history from the supply perspective," adding that customer demand would exceed supply capacity "even beyond 2030". According to TechWire Asia, citing Nikkei Asia, leading U.S. and South Korean suppliers are expanding DRAM output at a pace that would meet only about 60% of demand by 2027, with a roughly 40% gap remaining between supply and demand. Counterpoint Research has said supply and demand conditions in the memory market are not expected to stabilize until around 2028.techwireasia+1

AI Demand at the Root

The shortage stems largely from memory makers redirecting manufacturing capacity toward high-bandwidth memory used in AI data centers, squeezing supply of conventional DRAM for consumer electronics. IDC noted that this reallocation away from smartphones and PCs toward high-margin AI memory solutions has pushed DRAM prices sharply higher and constrained availability. The research firm projected that 2026 DRAM supply growth would remain below historical norms. For customers across consumer electronics and enterprise computing, Powerchip's "structural" shortage call reinforces the message that elevated memory costs are now the baseline for the foreseeable future.idc