The artificial intelligence boom is reshaping the memory market in ways that are now feeding directly into enterprise budgets, with DRAM and NAND flash shortages forcing buyers to compete for scarce supply while chipmakers enjoy record margins.
According to TrendForce, the top five NAND flash suppliers generated a combined $38.9 billion in revenue in the first quarter of 2026, up 83.7% from the previous quarter. Samsung led the pack with $13.51 billion in NAND revenue, while SK...
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Hynix, Kioxia, Micron and SanDisk also posted sharp gains. The surge has been driven less by higher output than by pricing power created by shortages.
That imbalance is now cascading through the broader technology supply chain. Gartner said memory prices rose by 50% to 200% in the first half of 2026, pushing server costs up by more than 125%. In a separate forecast in February, the research firm warned that surging memory costs would cut worldwide PC shipments by 10.4% and smartphone shipments by 8.4% this year, while lifting PC and smartphone prices sharply.
For enterprise buyers, the market has become unusually volatile. James Smith, senior director analyst at Gartner, told EE Times that the usual negotiation playbook is failing because suppliers are shortening quote validity periods and can alter prices up to shipment. He advised companies to build 12- to 24-month demand forecasts, but avoid locking themselves into rigid take-or-pay contracts.
The pressure is also changing how component buyers behave. Biwin, a maker of SSDs and memory modules, has signed a $1.86 billion, two-year fixed-price NAND supply agreement starting on 30 June, according to reports from Tom’s Hardware. The deal, which covers more than half of the company’s annual revenue, underlines how even mid-sized hardware firms are now seeking long-term supply protection as spot markets tighten.
There is little sign of immediate relief. TrendForce has said major NAND suppliers are unlikely to add much new capacity in 2026, instead directing existing output towards the most profitable enterprise storage products. Meanwhile, manufacturers are investing for the longer term rather than solving the current crunch.
Micron’s recent start-up of 1-alpha DRAM production at its Fab 6 site in Virginia has been presented as a step towards greater US supply-chain security. But analysts say the move largely shifts production rather than expanding total global supply. TrendForce noted that Micron is relocating older memory lines from Taiwan to Virginia, leaving its Taiwanese plants to focus on newer DDR5 and high-bandwidth memory for AI workloads.
That matters because the same factories that produce premium AI memory also make conventional DRAM used in servers, PCs and consumer devices. As more capacity is diverted towards high-bandwidth memory, supplies of standard DRAM and LPDDR4 remain tight. SPG Market Intelligence said the shift is already lifting prices for legacy DRAM, while demand for AI-oriented memory continues to intensify.
For IT departments, the result is a more cautious buying strategy. Gartner has urged customers to delay non-essential upgrades, consider the secondary market and prioritise workloads that genuinely need premium infrastructure. Smith said older servers that can accept memory upgrades may still be suitable for lower-priority tasks, allowing businesses to reserve scarce new hardware for the most demanding uses.
The cost pressure is spreading beyond hardware. As data-centre infrastructure becomes more expensive, SaaS and IaaS providers are beginning to pass some of those costs on to enterprise customers. Gartner’s broader 2026 IT spending outlook remains strong, projecting global expenditure of $6.31 trillion, up 13.5% from 2025, with data-centre systems showing the fastest growth. But that expansion is also one of the reasons memory demand has become so distorted.
For now, the market appears set to remain tight well into 2027, and possibly beyond. The winners are the major memory manufacturers, but for corporate buyers the task is less about expansion than endurance: forecasting carefully, negotiating constantly and deciding which workloads are worth the cost of premium silicon.
Source: Noah Wire Services
