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The landscape of the DRAM market has significantly deteriorated, especially within the PC sector. Following the discontinuation of its consumer brand, Crucial, Micron Technology has issued a concerning forecast about its capacity to meet consumer demand. In a recent financial briefing, CEO Sanjay Mehrotra stated that the company can fulfill only 50% to 66% of current market needs, indicating a substantial supply constraint that analysts predict will persist beyond 2026.
In the first quarter of fiscal 2026, Micron reported impressive revenue of $13.64 billion, marking a nearly 57% year-on-year increase. This growth is primarily attributed to enhanced pricing strategies and a surge in demand from AI data centers. As the technology sector increasingly embraces artificial intelligence, the demand for memory products is expected to remain robust. Mehrotra emphasized that the company is actively seeking multi-year supply commitments to tackle these challenges.
Impact of high bandwidth memory on supply
A key factor influencing the DRAM landscape is the rise of high bandwidth memory (HBM). This memory type requires significantly more wafer space—up to three times that of traditional DDR5. As a result, Micron anticipates substantial growth in its HBM revenue, estimating the Total Addressable Market (TAM) for HBM could reach $100 billion by 2028, surpassing the overall DRAM market by.
Manufacturing expansion plans
Despite plans for manufacturing expansions, Micron has expressed disappointment regarding its inability to meet the full demand from key clients. The company is currently developing two fabrication plants in Idaho, with the first set to commence chip production by mid-2027. Additionally, a new facility in New York is planned, with operations expected to begin around 2030.
Even with these advancements, Micron can only address a fraction of the growing demand. Customers are increasingly concerned about securing long-term access to memory products, leading many to pursue multi-year contracts.
Price fluctuations and market predictions
The ongoing DRAM shortage is contributing to a significant increase in DDR5 prices. Industry experts largely agree that these shortages will continue well into the next year and possibly beyond. While some vendors, such as Sapphire, predict price stabilization within the next six to eight months, others, including Kingston, anticipate continued price increases.
Kingston’s perspective on NAND pricing
Cameron Crandall, Kingston’s Datacenter SSD Business Manager, recently shared insights on the rising NAND prices during a podcast. He disclosed that NAND prices have surged by an astonishing 246% since the first quarter of, with a substantial portion of that increase occurring in just the past two months. Given that NAND constitutes approximately 90% of the overall cost for SSDs, Kingston will need to adjust its pricing strategy accordingly.
Crandall advised consumers considering RAM or SSD upgrades to act quickly, warning that prices are expected to rise further. He emphasized that delaying purchases may not be wise. Kingston remains dedicated to ensuring that the gap left by Crucial’s exit from the market is effectively filled.
Historical context and future implications
This current situation is not unprecedented. Historical events such as the 1995 Kobe earthquake and a 1993 resin factory fire have previously caused dramatic price increases in the memory market. However, the current scenario is more complex, driven by factors such as increasing demand for AI applications and strategic shifts by major memory manufacturers.
The concentration of the DRAM market among a few key players—SK Hynix, Samsung, and Micron—has historically allowed for stable production and pricing. However, as these companies redirect resources towards more profitable sectors like AI and HBM, consumer-facing products may suffer. This shift could lead to a prolonged period of inflated prices and limited availability, forcing consumers to navigate a landscape that has become increasingly volatile.