Memory and storage prices will only get worse, Adata CEO says

Rising AI demand pushes up prices for DRAM, NAND, SSDs, and HDDs

by · TechSpot

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The big picture: Multiple manufacturers have recently frozen or hiked memory and storage prices as demand from AI data centers surges, and executives warn the situation may get worse before it gets better. Across the industry, AI and cloud giants are displacing traditional memory makers, while DDR4 RAM – once the backbone of PCs and servers – is slowly being phased out. The result is a perfect storm that's upending supply chains and reshaping the economics of the memory market.

Adata chairman Simon Chen projects that manufacturing shortages in RAM, flash memory, solid-state drives, and hard drives will continue driving prices upward well into 2026. Speaking at a press conference, Chen said that this is the first time in his three-decade career that all four major manufacturing lines have experienced simultaneous shortages.

Cloud service providers that have heavily invested in AI, such as OpenAI, Amazon Web Services, and Microsoft, require massive amounts of storage space to address the data needs for training large language models amid the ongoing AI boom. These companies have become the primary clients for memory and storage manufacturers, leaving traditional module manufacturers to sift through reserves that have reached historic lows.

Since manufacturers began transitioning away from DDR4 RAM, prices for the previous-generation memory have surpassed those of its successor, DDR5. Chen expects DDR4 to bear the brunt of the crisis, with contract prices rising by 20 – 30% between the fourth quarter of this year and the first half of 2026, and spot prices rising higher. DDR5 prices are also expected to increase, and HDDs will suffer from low inventory through the first half of next year.

AI server demands are stretching supplies despite efforts by Samsung and SK Hynix to intensify production by up to 30%. Chen explained that the AI craze has upset the traditional memory market cycle, lengthening the upswing period.

The Adata chairman expects shortages to last for at least four years, but others have an even more pessimistic outlook. Phison CEO Pua Khein-Seng recently projected NAND flash shortages to begin next year and last for a decade, creating a "supercycle."

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Samsung, Micron, SanDisk, Western Digital, and Seagate have already adjusted prices in recent weeks. Since AI data centers require vast quantities of infrequently accessed storage, for which HDDs are ideal, demand has driven manufacturing into uncharted territory and spilled over into the SSD sector. Consumers might see prices climb by up to 30%.

However, much of the speculation depends on the enduring popularity of AI, which faces growing fears of a bubble. Although concerns about the true financial benefits of using AI are growing, no one is sure when the AI bubble might burst or how demand could change afterward.