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Contract negotiations extend as suppliers prioritize major American clients, while spot prices rise on strong demand. AI adoption reshapes memory specifications toward higher bandwidth and lower power. As computing demands surge, severe capacity shortages limit server configurations, making supplier allocation critical to industry growth.
AI demand and proprietary chip adoption drive upward revisions in global server shipments. Despite supply bottlenecks, memory face severe shortages and soaring prices. AMD and alternative architectures gain market share, putting pressure on the traditional market leader.
Soaring memory prices have triggered a chain reaction, leading to a significant downward revision in annual smartphone production. Faced with heavy cost pressures, brand strategies are diverging; tech giants with premium pricing power and deep resources are poised to expand their market share. Driven by surging contract prices, the mobile DRAM market revenue hit record highs, officially cementing a highly consolidated four-player oligopoly.
Beyond full-rack solutions, NVIDIA is also actively promoting its standalone Vera CPU to capture the AI inference market. However, given the LPDRAM supply bottleneck, NVIDIA has decided to reduce the memory module capacity on its next-generation platforms to ensure shipment volumes align with market share targets. As AI applications continue to expand, the AI server ecosystem has the potential to become the single largest outlet for global LPDRAM, surpassing smartphone applications.
Driven by AI expanding into inference, cloud providers are accelerating data center buildouts, triggering a surge in server memory orders. This has caused contract prices to skyrocket and fueled robust industry revenue growth. Looking ahead, with supplier inventories hitting rock bottom and output prioritizing server products, the severe market undersupply is unlikely to ease anytime soon.
Driven by agentic AI applications, the server DRAM market experienced explosive growth. The need for models to handle complex computations and offload long contexts has led to a severe shortage of key modules. Despite hardware supply bottlenecks, cloud service providers continue aggressive procurement, depleting manufacturers' inventories to critical lows. Contract prices are surging, with this under-supply and upward price trend expected to persist long-term.
TrendForce raised its 2026 global server shipment forecast, driven by surging AI server demand from CSPs and enterprises, with momentum expected through 2027.
Server DRAM contract prices strengthen on supplier hikes, while spot markets show modest gains amid cautious buying. To overcome conventional capacity constraints caused by a focus on high-bandwidth memory, manufacturers are aggressively advancing node transitions to boost overall bit supply. Despite extensive expansion plans, new capacity will not significantly debut until the second half of the year after next, prolonging the current market undersupply.
Server DRAM contract prices continue to rise due to supply deficits and depleted manufacturer inventories. Although premium pricing on high-capacity modules and shifts in processor configurations have led cloud service providers to recalibrate their demand toward low-to-mid capacity options—temporarily halting the growth momentum of large-capacity shipments in the second half—overall server demand remains robust, keeping the market under-supplied.
The era of high-cost memory is unlikely to end anytime soon, and the global smartphone market is projected to enter an output adjustment period starting in 2Q26. Brands equipped with economies of scale, conglomerate resources, and premium product pricing power are well-positioned to stand out in this elimination race. Conversely, brands predominantly selling low-to-mid-range products must brace themselves for a battle for survival.
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