On July 15, 2026, Samsung Electronics was reported to be planning the construction of a new DRAM factory in Giheung, Gyeonggi Province, with a monthly capacity of 100,000 wafers and a total investment reaching tens of trillions of won. Artificial intelligence is fundamentally reshaping the global supply-demand dynamics and pricing logic of memory chips.
As a core component of AI infrastructure, DRAM (Dynamic Random Access Memory) is undergoing a cycle reconstruction driven by a dramatic shift in demand structure. This new cycle is fundamentally different from traditional memory cycles: instead of being fueled by consumer electronics replacement waves, it is triggered by explosive demand for high-bandwidth memory in AI training and inference. Understanding the evolution of this DRAM cycle is crucial for grasping the direction of the semiconductor industry and changes in the foundational infrastructure of the digital asset market.
Supply-Demand Gap Widens to Near 15-Year High
As of July 2026, global memory chip prices have risen for a third consecutive quarter. In a report released in early July, UBS sharply raised its memory price forecasts, projecting that DDR contract prices will climb 32% quarter-over-quarter in Q3 and another 18% in Q4. The bank expects the tight supply-demand situation in the DRAM industry to persist at least through the first half of 2028.
Multiple data points corroborate this assessment. According to TrendForce, the overall DRAM market in Q3 2026 remains extremely tight, with contract prices expected to rise 13% to 18% quarter-over-quarter. On July 7, Morgan Stanley raised its quarter-over-quarter price increase forecast for PC DRAM blended ASPs from 3%-8% to 15%-20%, and for server DRAM to 13%-18%.
The depth of the supply-demand imbalance is approaching historic extremes. UBS analysts note that, excluding the buffer effect of downstream inventory replenishment, the actual supply-demand gap in 2027 will widen from -8.1% in 2026 to -13.6%, reaching an imbalance rarely seen in the past 30 years. Goldman Sachs reports that the current global memory supply-demand imbalance is at its highest in nearly 15 years. KB Securities analyst Kim Dong-won further predicts that 2027 will mark the tightest supply period in the 70-year history of the memory semiconductor industry.
Upstream price increases have now spread throughout the supply chain. Samsung Electronics plans to raise the average selling price of general DRAM by 20% quarter-over-quarter in Q3 2026, with LPDDR mobile memory prices rising by over 20% as well. According to Yicai, some consumer electronics manufacturers have already received verbal notifications from Samsung about DRAM price hikes.
HBM Emerges as the Structural Variable in the DRAM Cycle
The key to understanding this DRAM cycle lies in the rise of HBM (High Bandwidth Memory). HBM achieves ultra-high bandwidth by vertically stacking multiple DRAM chips, making it an essential memory solution for AI GPUs.
Demand growth has been staggering. SEMI China President Li Feng pointed out that the HBM market is expected to grow 58% to $54.6 billion in 2026, accounting for nearly 40% of the DRAM market. Although Samsung, SK Hynix, and Micron have directed 70% of new capacity toward HBM, the overall capacity shortfall still ranges from 50% to 60%. Omdia data shows that global HBM output in 2026 is expected to more than double year-over-year, rising 103%.
HBM’s "crowding-out effect" on DRAM capacity is the core mechanism behind the supply-demand imbalance. Industry data indicates that HBM’s share of DRAM wafer capacity has risen from 2% in 2020 to an estimated 25% in 2026. One HBM wafer consumes roughly the same capacity as three DDR5 wafers. Each HBM chip is more than twice the size of a standard DRAM chip, and for the same storage capacity, HBM consumes at least three times the wafer area and cleanroom space compared to standard DRAM.
The direct result of this capacity tilt is a structural contraction in general DRAM supply. KB Securities expects HBM’s share of global DRAM wafer output to rise from 15% in 2026 to 34% in 2027. This means most new capacity will go to HBM, effectively limiting the expansion of general DRAM supply.
AI servers have become the largest application market for DRAM, with server demand now accounting for over 50% of total DRAM demand. An AI server uses 8 to 10 times more DRAM per unit than a standard server. The average DRAM installed per server is projected to rise from 1,032 GB in 2025 to 1,432 GB in 2026, an increase of about 39%. TrendForce estimates that about 70% of high-end memory capacity in 2026 will flow to AI data centers.
The Capacity Race and Market Share Battle Among the Big Three
In this HBM-driven cycle, the strategic moves of SK Hynix, Samsung Electronics, and Micron are reshaping the industry landscape.
SK Hynix is currently the undisputed leader in the HBM market. Counterpoint Research data shows that in Q1 2026, SK Hynix held a 58% revenue share in the global HBM market, with Samsung Electronics and Micron each at 21%. Analysts predict SK Hynix’s HBM revenue could reach $5.95 billion in 2026. The company’s entire 2026 HBM capacity has already been locked in by long-term contracts with cloud providers.
However, this lead is under pressure. A July 13 report from Korea Investment & Securities forecasts SK Hynix’s Q2 revenue at 80.9 trillion won (up 264% year-over-year) and operating profit at 60.4 trillion won (up 556% year-over-year), but about 8% below the market consensus of 65 trillion won. The main reason is that SK Hynix’s higher HBM sales share, compared to competitors, resulted in average selling price increases below the market average. Analysts expect that with full-scale HBM4 mass production starting in Q3, average price increases will return to market norms.
Samsung Electronics is racing to catch up. The company plans to invest over 110 trillion won (about $73.3 billion) in equipment and R&D in 2026, up about 22% from the previous year. As of July 15, Samsung announced plans to build a new DRAM fab in Giheung with a monthly capacity of 100,000 wafers, potentially breaking ground as early as Q3 2026.
Samsung has also achieved the world’s first mass production and shipment of HBM4 products. According to a June report from TrendForce, there are now significant differences in HBM4 validation progress among the top three manufacturers, with Samsung in the lead. Samsung expects its HBM sales in 2026 to more than triple year-over-year.
Micron, while having the smallest HBM capacity among the three, is experiencing the fastest growth. In its fiscal Q3 2026 (ending in May), Micron posted revenue of $41.46 billion, up 346% year-over-year. DRAM contributed $31.3 billion, accounting for 76% of total revenue. Gross margin reached 84.9%, surpassing Nvidia.
Even more notable is its Q4 guidance: projected revenue of about $50 billion, gross margin of about 86%, and earnings per share of about $31. Micron’s entire 2026 HBM capacity has been sold out under fixed-price contracts. The company’s equipment investment plan is set to increase by over 90% compared to the previous year.
From Cyclical to Structural: The Long-Term Shift in DRAM Logic
The most fundamental difference in this DRAM cycle compared to previous ones is the structural change in its driving forces.
IDC forecasts global DRAM market revenue will reach $418.6 billion in 2026, up 177% year-over-year. NAND market revenue is expected to hit $174.1 billion, up 138.5%. Total annual output value of the storage industry will surpass $550 billion, with server storage overtaking mobile phones as the largest demand scenario. UBS believes rising prices will drive the memory industry to $992 billion in revenue in 2026.
This growth is not simply another cyclical rebound. IDC makes it clear: this is not just another upswing in the traditional memory boom-bust cycle, but a structural transformation of the industry. Hyperscale data center customers are now buying a fundamentally different, more expensive type of memory chip, and are willing to pay a premium to secure supply.
Supply-side constraints are also structural. After deep industry losses in 2025, manufacturers broadly adopted output control and price protection strategies. Advanced semiconductor process R&D and fab construction take years, compounded by barriers in talent, energy, and regulatory approvals, making it impossible to bring new capacity online quickly. Micron executives believe the tight supply situation will persist until after 2027, with gradual supply-side improvement only beginning in 2028.
The widespread adoption of Long-Term Agreements (LTAs) is changing industry pricing and profit models. SK Hynix, Samsung, and Micron are all locking in future 1-2 year supply volumes and prices for major clients like Nvidia through LTAs. Micron has signed 16 long-term supply agreements covering data centers, consumer electronics, and automotive, with minimum guaranteed revenue from these contracts alone reaching $100 billion. Korea Investment & Securities points out that as the memory industry shifts to 3- to 5-year LTAs, a company’s value will depend on how long it can sustain high profitability, rather than on quarterly average selling price growth rates.
Conclusion
AI server demand is propelling the DRAM industry into an unprecedented new cycle. The defining features of this cycle are not simply higher prices, but a systemic restructuring of demand, capacity allocation, pricing models, and industry landscape.
The rise of HBM has reshaped the DRAM product matrix, while the big three’s capacity tilt has caused a structural shortage of general DRAM. The proliferation of LTAs is smoothing out cyclical volatility in the industry. UBS expects the DRAM supply-demand squeeze to persist at least through the first half of 2028, and KB Securities forecasts 2027 will be the tightest year in the industry’s 70-year history—pointing to a single conclusion: the duration and intensity of this DRAM cycle could far exceed initial market expectations.
For investors, understanding the shift of DRAM from a "cyclical commodity" to a "strategic asset" may offer more long-term value than simply predicting next quarter’s price movement. As memory chips become the core infrastructure of the AI era, the logic of supply and demand and the distribution of pricing power will profoundly impact the entire technology value chain, from semiconductors to digital assets.
FAQ
Q: How much greater is DRAM demand for AI servers compared to standard servers?
An AI server uses 8 to 10 times more DRAM per unit than a standard server. The average DRAM installed per server is projected to rise from 1,032 GB in 2025 to 1,432 GB in 2026. Large-scale model inference and the expansion of AI agents will further accelerate storage demand growth.
Q: How do HBM and traditional DRAM differ in production costs?
HBM is made by vertically stacking multiple DRAM chips. Each HBM chip is more than twice the size of a standard DRAM chip, and for the same storage capacity, HBM consumes at least three times the wafer area and cleanroom space. One HBM wafer consumes about the same capacity as three DDR5 wafers. The high production cost is matched by high gross margins—each HBM chip has a gross margin of 60%-70%, four times that of standard DRAM.
Q: When is the DRAM supply-demand squeeze expected to ease?
UBS believes the tight supply-demand situation in the DRAM industry will persist at least through the first half of 2028. KB Securities predicts the shortage will likely last until at least 2028. Micron executives expect the tight supply to continue until after 2027, with gradual supply-side improvement only beginning in 2028. The three institutions agree on the presence of tightness; their main difference is on how long it will last.
Q: What is the market share landscape among the three HBM giants?
In Q1 2026, SK Hynix led with a 58% revenue share, while Samsung Electronics and Micron each held 21%. For full-year shipment market share, forecasts are SK Hynix at about 52%, Samsung at about 39%, and Micron at about 8%. In the HBM4 segment, Counterpoint Research projects SK Hynix will hold about 54% market share in 2026, Samsung about 28%, and Micron about 18%. Samsung leads in HBM4 validation progress.
Q: How will DRAM price increases affect consumer electronics end prices?
DRAM price hikes have now flowed from upstream manufacturers to consumer electronics. Industry analysis suggests PC and smartphone brands are expected to raise product prices by 15% to 20%. In distribution hubs like Huaqiangbei, prices can change three times a day, and dealers advise postponing non-essential purchases. Automakers have also begun reassessing some smart driving features to control component costs.
