Chip makers warn of shortages DRAM, NAND and possibly HBM memory chips. because demand from cloud service providers exceeds supply. The problem is made worse by the fact that Recent Trump Administration Ban on Chinese Factories production of these components.
Major component maker Samsung announced in the Korean press last week that it was going to focus on producing DRAM chips at the expense of NAND at its plants in Pyeongtaek and Hwaseong in South Korea, which have so far produced both types of components.
The reason is that RAM has the highest demand from customers. This explosive growth in DRAM demand is due to large amounts of memory required on servers to load artificial intelligence (AI) modelswhose size – often many tens of gigabytes – far exceeds the size of traditional web applications. And that's just to meet inference needs, i.e. enterprises' use of pre-trained AI.
Pressure on DRAM production will impact internal HBM memory in GPUs designed for artificial intelligence training. In both cases, these are the same circuits – they are etched on the same chains. The difference lies in the way they are assembled on the communication bus. The HBM bus is very large because it is designed to interface directly with the pins of the compute chip, while the bus for DDR5 chips is smaller and allows some of the connections to be placed behind the chipset.
60% at DDR5 prices and 100% by the end of 2026
Demand for more server memory is now so strong that the price of DDR5 DRAM components in wholesale markets has risen 60% this month. Prices are set at the end of each month by producers depending on demand. Unusually, however, Samsung delayed publishing the latest prices by two weeks to assess the situation.
According to Toby Gonnerman, head of memory wholesaler Fusion Worldwide, quotes Reuters“Most server manufacturers and data center operators now have to accept that they will no longer receive memory components on time, and that premium stock prices are already… extreme.”
The 32GB DDR5 chip is trading at $239, down from $149 at the end of September. The 16GB chip now costs $135, and the 64GB chip now costs $1,194.
In particular, Samsung, like its competitor and compatriot SK Hynix, has recently upgraded its production lines to engrave memories with greater precision: Samsung's Generation 1c (between 11 and 12 nanometers) and SK Hynix's Generation 1b (between 12 and 13 nanometers). The problem is that the novelty of these processes has led to a number of production failures. At Samsung, only 50-70% of the DRAM circuits engraved on the wafer are functional, compared to the usual 80%.
Another aggravating factor is Nvidia's recently announced intention to use only LPDDR5 memory in its GPUs by the end of 2026. This type of memory is more energy efficient than regular DDR5, meaning Nvidia GPUs will consume less power. But LPDDR5 is more difficult to produce. According to Gonnerman, quoted Reuterswidespread use of LPDDR5 will mean doubling the cost of memory on servers.
According to analysts, prices for DRAM components are unlikely to stabilize before mid-2027.
There are also not enough SSD drives
The fact that Samsung and SK Hynix are dismantling NAND production lines to install DRAM production lines will create a shortage of SSDs from the end of 2025 to the end of 2026.
SSD manufacturer Phison was the first to sound the alarm. latest financial reportpublished earlier this month. The price of a 1-terabit TLC NAND chip (it takes eight to make 1TB) is now trading at $10.70 on the wholesale market, down from $4.80 this summer, according to its CEO Khein-Seng Pua. All of the SSDs that Phison will produce in 2026 have already been sold, and prices will continue to rise until 2027.
Rival SanDisk also announced that all of its NAND chip suppliers raised prices by 50% between October and November. SanDisk also noted that it had to wait as long as 15 days to receive updated monthly prices.
Analysts say SSD manufacturing isn't just suffering from a likely drop in Samsung's production volumes—it must also respond to growing demand from artificial intelligence infrastructure providers who are now favoring SSDs over hard drives to load tens of GB of RAM from large language models (LLMs) faster.
As a result, Transcend, Innodisk and Apacer Technology, all three of which assemble NAND circuits into chips before reselling them to SSD manufacturers, have just announced unprecedented financial results, with sales up 27%, 64% and 70% year over year, respectively.
In response to this sudden shortage, server and PC maker Lenovo said Bloomberg that the company is stockpiling DRAM and NAND components to supply all the machines it intends to produce by the end of 2026. According to media reports, its rival Acer sent a delegation to purchase components directly from Samsung factories, bypassing the usual wholesalers in the supply chain.
