The memory semiconductor market has entered a difficult phase where prices are rising but actual sales volumes are shrinking.
The primary cause of this situation is the global AI boom. As demand for AI chips skyrockets, major memory manufacturers like Samsung are shifting a significant portion of their production capacity to HBM (High Bandwidth Memory), a specialized memory used alongside AI processors. This strategic shift, however, creates a supply bottleneck for the general-purpose memory chips used in our daily devices like smartphones and PCs.
This leads to a clear causal chain. First, the reallocation of production capacity directly results in a structural supply shortage of NAND flash (used in SSDs) and mobile DRAM (like LPDDR4X). With less supply available, a price increase becomes almost inevitable.
Second, armed with pricing power, major suppliers have been aggressively raising their contract prices since late 2025. These are the prices large manufacturers like Apple or Dell pay. By early 2026, these price hikes had become exceptionally steep, with some NAND products jumping over 50% in a short period.
However, this is where the market freezes up. Distributors and smaller players in the spot market, who buy and sell chips for immediate delivery, cannot pass these sharp cost increases on to their customers instantly. This creates a situation of negative margins, where they lose money on every chip sold. Consequently, trading volume plummets as buyers wait for prices to stabilize and sellers are unwilling to sell at a loss.
Ultimately, this pressure will be passed on to consumers. Smartphone and PC manufacturers, faced with soaring component costs, will have two choices: raise the prices of their final products or adjust specifications downward—for example, by releasing a new phone with 6GB of RAM instead of 8GB, or a 128GB SSD instead of 256GB. This is a classic supply shock, where a crunch in one critical area sends ripples throughout the entire electronics industry.
- HBM (High Bandwidth Memory): A type of high-performance memory optimized for use with AI accelerators and GPUs, providing much faster data transfer speeds than conventional memory.
- Spot Market: A market where financial instruments or commodities, such as memory chips, are traded for immediate delivery, as opposed to future delivery.
- Negative Margin: A situation where the cost to acquire a product is higher than the price it is sold for, resulting in a financial loss on the sale.