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Restricted by supply shortages, PC DRAM contract prices skyrocketed in the first quarter, with DDR4 outperforming DDR5. Although rising laptop prices have dampened full-year shipment forecasts, low inventory levels and new platform demand have led to a sharp upward revision in price outlooks. Major suppliers are strategically delaying pricing, sustaining a strong bullish market.
While most smartphone brands have not yet officially initiated price negotiations for 1Q26 mobile DRAM, market signals indicate that the upward trend will persist this quarter, with momentum exceeding that of the previous quarter. US-based clients have already finalized negotiations, while Chinese clients are expected to settle theirs after the Lunar New Year. With overall DRAM supply remaining tight, product profitability has become the decisive factor in securing resource allocation. On the end-market front, rising memory prices are causing a decline in smartphone and notebook shipments, as well as extending replacement cycles. Facing this high-cost environment, brands are compelled to rethink their strategies to control BOM costs and maintain price competitiveness.
Persistent DRAM supply shortages have empowered suppliers, driving sharp upward revisions in contract prices. High-margin Server DRAM now leads profitability, prompting capacity shifts. Consequently, pricing trends remain strong with limited negotiation room for buyers.
Contract price forecasts were raised sharply, led by PC DRAM, with further upside potential. High spot costs stalled advanced chip trading, shifting demand to mature products. CXMT is accelerating process upgrades to expand global share, focusing on high-capacity DDR5 and HBM to boost localization.
US memory tariffs face cost hurdles. Asian makers stay low intention due to high expenses; costs will likely shift to buyers, favoring friend-shoring over US expansion.
Driven by robust demand for AI servers and high-performance computing, the memory market has entered a super-cycle of price hikes starting from 2H25. Escalating memory costs are forcing brands to raise end-device prices and scale back low-end models to cope with cost pressures. Against this backdrop, the year-on-year decline in global smartphone production for 2026 could widen to approximately 15%, or potentially even higher, under a pessimistic scenario. However, given the absence of signals indicating a halt in price increases and persistent supply tightness, most brands are choosing to maintain their established procurement volumes with suppliers to secure resource allocations. It is noteworthy that this wave of memory price increases is driving up the retail prices of various electronic devices, further evolving into a broader risk of consumer electronics inflation.
In 2026, benefiting from strong capital expenditure by North American CSPs, AI server shipments and revenue share are expected to rise significantly, driving supply chain expansion and the development of liquid cooling technologies. Industry players such as Foxconn, Quanta, Wistron, and MGCooling are actively deploying rack-level and data center system liquid cooling solutions as well as overseas production capacities. Despite lingering geopolitical variables, overall market momentum remains robust.
AI infrastructure upgrades are driving structural memory demand, making DRAM and NAND Flash critical resources. Heavy CSP investment is pushing prices and revenue to record highs. With persistent shortages giving suppliers pricing power, the market is poised for sustained long-term growth.
Micron acquires PSMC’s Tongluo facility to accelerate capacity expansion, alongside agreements for DRAM technology licensing and advanced packaging. This strategic partnership resolves Micron’s AI-driven bottlenecks and enhances PSMC’s mature process capabilities, significantly boosting future industry supply and technical depth.
Manufacturers prioritize server demand, cutting PC supply. This prompts a sharp upward revision in 1Q price forecasts, urging buyers to secure supply.
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