The world’s top three memory manufacturers - Samsung, SK Hynix, and Micron - currently dominate about 70% of the global DRAM market.

After a period of DRAM oversupply in early 2023, these manufacturers slashed production. By the end of 2024, excess inventory had been absorbed by the market.

Now, manufacturers have shifted focus toward high-margin memory products like HBM and DDR5. At the same time, they’ve scaled back DDR4 output, even though many customers still rely on the older standard.

This shift has caused a widespread price increase across the DRAM industry. Between September and November alone, Samsung’s memory chip prices climbed by 60%.

In just two months, the contract price for a 32GB DDR5 module jumped from $149 to $239. Modules in other capacities have also surged - 16GB and 128GB DDR5 kits now sell for $135 and $1,194 respectively, reflecting increases of around 50%.

The primary driver behind this shortage is the global race to build artificial intelligence infrastructure. AI data centers are consuming vast quantities of memory, outcompeting the consumer market for supply.

Nvidia’s financial reports highlight the trend: nearly 90% of the company’s revenue now comes from data center chips. CEO Jensen Huang noted, “Over the past six months, the demand for compute power has increased significantly. AI has reached a tipping point - everyone wants to use it. We are witnessing two exponential growth curves colliding.”

Global AI spending is projected to reach $2 trillion by 2026. Huang predicts infrastructure investment could hit $3 to $4 trillion by the end of the decade.

Many of the new AI GPU clusters rely on high-bandwidth memory (HBM) stacks, which require more manufacturing capacity than conventional DRAM.

Manufacturers are now allocating three times more wafer capacity to HBM than to standard DRAM, resulting in a severe drop in DDR4/DDR5 availability - just as hyperscalers race to buy memory for both AI and traditional servers.

The memory crunch is not limited to DRAM. NAND flash (used in storage) and even HDDs are now in short supply.

According to memory producer Adata, DRAM, NAND, and HDDs are simultaneously experiencing shortages for the first time in 30 years.

This “perfect storm” is pushing PC makers and consumers into a pricing nightmare, with every component becoming more expensive all at once.

Retailers face chaos

A recent PCWorld article illustrated the madness: stores like Central Computers in San Francisco Bay Area and Micro Center in the U.S. are now adjusting RAM prices daily - like produce at a local market.

At Central Computers, a sign reads: “Prices are changing daily as manufacturers and distributors respond to supply constraints and high demand. As a result, we cannot post fixed prices at this time.” Micro Center echoes this, advising customers to speak to staff for real-time pricing “due to market fluctuations.”

Just three months ago, a gamer could buy a 32GB RAM kit for $130. That same kit now costs $440 - more than triple. A 64GB DDR5 set can easily fetch $700, $800, or even $900.

As a result, graphics cards, gaming consoles, smartphones, and laptops all face looming price hikes.

After raising Xbox prices in May, Microsoft may be forced to do it again. Sony reportedly stockpiled inventory and has not announced immediate changes to PlayStation 5 pricing.

However, Epic Games CEO Tim Sweeney warned that surging RAM costs could be a long-term problem for the gaming industry.

Meanwhile, DRAM is used in virtually every device - from smartphones to laptops. Many manufacturers are re-evaluating product specs or delaying launches due to component costs.

Analysts expect this price trend to last at least four more years, in line with supply contracts signed between Samsung, SK Hynix, and major clients.

Consumers and businesses planning to upgrade their tech should brace for a tough period ahead.

The situation may only ease if the “AI bubble” bursts - or if new, more memory-efficient AI models emerge. Neither scenario seems likely anytime soon.

So, if you're planning to upgrade your smartphone, PC, or console - this might be the moment to act, before prices climb even higher.

Du Lam