Memory Chip Shortage Deepens as AI Demand Surges, Analysts See Tight Supply Persisting Until 2027

The boom in AI is diverting memory chip production to high-performance products like HBM, creating a severe shortage of standard chips.

This supply crunch has triggered a massive price surge, with some memory contract prices jumping by over 90% in a single quarter.

Analysts, including CITIC Securities, predict this 'sellers' market' will likely continue until the first half of 2027.

The global memory chip market is currently in the grip of a severe supply shortage, driving prices to extraordinary levels. This situation has created what is known as a 'sellers' market', where manufacturers hold significant power, and this trend is expected to continue until at least the first half of 2027.

The primary cause behind this disruption is the explosive growth in Artificial Intelligence (AI). First, the demand for specialized, high-performance memory for AI systems, known as High-Bandwidth Memory (HBM), is surging. Major chipmakers like Samsung, SK hynix, and Micron are reallocating their production capacity—from manufacturing facilities to packaging resources—to meet this lucrative AI-driven demand. This shift acts like a vacuum, pulling resources away from the production of conventional memory chips (DRAM and NAND) used in everyday devices like smartphones and PCs.

Second, this AI-driven capacity shift coincided with a period where manufacturers had already been deliberately cutting production of standard chips since late 2025 to stabilize falling prices. This pre-existing supply discipline, combined with the new, massive demand from the AI sector, created a perfect storm. The result was a dramatic and rapid price increase. For the first quarter of 2026 alone, contract prices for conventional DRAM were projected to rise by an astonishing 90-95%, with NAND prices also jumping 55-60%.

Finally, we see clear evidence of this trend in the market. Kioxia, a major NAND producer, has already stated its entire 2026 output is sold out. Furthermore, downstream companies like Biwin, which assemble chips into final products, reported a staggering 1,000% year-over-year profit increase. This confirms that the high prices are being passed through the supply chain, validating the severity of the shortage.

DRAM and NAND: These are the two main types of memory chips. DRAM is volatile memory used for active tasks (like RAM in your computer), while NAND is non-volatile flash memory used for long-term storage (like in SSDs).
High-Bandwidth Memory (HBM): A high-performance type of DRAM designed for data-intensive applications like AI accelerators and supercomputers. It offers much faster data transfer speeds than conventional DRAM.
Average Selling Price (ASP): The average price at which a certain type of product is sold. A rising ASP is a key indicator of strong demand and/or tight supply.

Memory Chip Shortage Deepens as AI Demand Surges, Analysts See Tight Supply Persisting Until 2027

The boom in AI is diverting memory chip production to high-performance products like HBM, creating a severe shortage of standard chips.

This supply crunch has triggered a massive price surge, with some memory contract prices jumping by over 90% in a single quarter.

Analysts, including CITIC Securities, predict this 'sellers' market' will likely continue until the first half of 2027.

DRAM and NAND: These are the two main types of memory chips. DRAM is volatile memory used for active tasks (like RAM in your computer), while NAND is non-volatile flash memory used for long-term storage (like in SSDs).
High-Bandwidth Memory (HBM): A high-performance type of DRAM designed for data-intensive applications like AI accelerators and supercomputers. It offers much faster data transfer speeds than conventional DRAM.
Average Selling Price (ASP): The average price at which a certain type of product is sold. A rising ASP is a key indicator of strong demand and/or tight supply.