Semiconductors That Rival Oil: Memory Prices Seen Rising Another 50% in the Second Half

[Financial News] As competition intensifies to secure memory chips for AI data centers, prices of DRAM and NAND flash are expected to rise by as much as nearly 50% in the second half of this year as well. With big tech companies locking up production through long-term supply contracts, shortages of general-purpose memory used in PCs and smartphones are also expected to worsen.
According to Wccftech, a U.S. IT media outlet, on the 29th local time, Jefferies said in a recent report that DRAM and NAND prices are expected to rise by 40% to 50% in the third quarter and by 30% to 40% in the fourth quarter, compared with the previous quarter.
Jefferies also projected that memory prices will rise 40% to 45% next year from this year. However, it said that when new production capacity begins to expand in earnest in 2028, supply could increase by 10% to 15%, which may push average selling prices down.
The biggest driver of the price increase is the preemption of supply by cloud hyperscalers. Jefferies estimated that about 50% of total memory production is currently tied up in long-term supply agreements between memory makers and global big tech firms.
Micron, for example, has signed 16 strategic customer agreements covering the 2026 to 2030 period. These contracts include clauses requiring the purchase of a set volume.
Jefferies explained that if the share of long-term supply contracts rises to 70%, shortages of commodity memory used in PCs, laptops and smartphones will become even more severe.
It said the challenge from Chinese companies is not an immediate threat. ChangXin Memory Technologies (CXMT) is currently 1.5 to 2 generations behind global leaders in DRAM technology, making it unlikely to have a major impact on the market landscape in 2026 and 2027. However, if Chinese firms expand overseas supply after 2028, they could emerge as a new variable.
This outlook is also reflected in Micron's earnings. Micron's revenue for the third quarter of this year (March to May) jumped 346% from a year earlier to $41.5 billion. During the same period, DRAM prices rose in the mid-60% range from the previous quarter, while NAND prices climbed in the mid-80% range. Micron also projected fourth-quarter revenue of $50 billion.
Micron CEO Sanjay Mehrotra said, "We can supply only 50% to 67% of customer demand in the medium term," predicting that the shortage will continue for some time. He added, "Supply conditions will improve only after 2028, when the new semiconductor plant in Idaho begins full-scale operations."
Market research firm Gartner forecast that by the end of this year, combined prices of DRAM and solid-state drives (SSDs) will rise 130%, pushing average PC selling prices up 17% and reducing global PC shipments by 10.4%.
TrendForce, a Taiwan-based market research firm, also said contract prices for PC DRAM are expected to continue rising in the third quarter of this year.

km@fnnews.com Kim Kyung-min Reporter