Surging demand for AI computing power has propelled the storage market into an unprecedented super upturn. Is this rally set to accelerate further, or is it approaching a turning point?
The latest monthly price tracker report on the memory market released by market research firm Counterpoint Research shows that global memory chip prices are experiencing a rare surge, with the overall market entering a 'super bull market' phase, and price levels surpassing the historical highs of 2018 across the board.
Driven by the continuous surge in demand for AI computing infrastructure and server capacity, memory products such as DRAM and NAND are in short supply, pushing suppliers' pricing power to historic highs. The report forecasts that memory prices will increase by 40%-50% overall in the fourth quarter of 2025, with another 40%-50% rise expected in the first quarter of 2026, followed by an estimated further 20% increase in the second quarter of 2026.
Continued rise in memory prices forces a rewrite of industry cost lines.
Structurally, this round of price increases is not a short-term rebound but rather a sharp reversal following a prolonged period of downturn.
After experiencing prolonged price declines and destocking from 2023 to 2024, leading memory manufacturers proactively cut production and concentrated capacity on high-margin products, setting the stage for this round of supply tightening.
Counterpoint noted in its report that traditional server DRAM, consumer-grade DRAM, and NAND prices have already undergone multiple rounds of cumulative increases in 2025, with a single-quarter increase of 40%-50% in the fourth quarter of 2025, and even larger price hikes for some high-end modules.
This upward trend has already been reflected in specific products. Counterpoint disclosed that the price of the commonly used 64GB RDIMM module in data centers jumped from $255 in the third quarter of 2025 to approximately $450 in the fourth quarter, and is expected to rise further to around $700 by March 2026, with both quarterly and annual increases far exceeding those of the previous cycle.
The rapid price increase has rendered downstream OEMs' original cost models ineffective, eroding cost advantages painstakingly achieved through fine-tuning other components, all being concentrated in the single item of 'memory'.
At the same time, the industry's judgment of a 'super memory cycle' is strengthening. Third-party data indicates that revenue from the DRAM industry grew strongly year-on-year and quarter-on-quarter in the third quarter of 2025, with contract prices continuing to rise in the fourth quarter. Standard DRAM contract prices increased by nearly 50% in the quarter, while high-bandwidth memory (HBM) and advanced process products saw even greater increases, driving a significant recovery in overall memory business profitability.
AI servers seize capacity, leaving PCs and smartphones to 'foot the bill' passively.
The core driving force behind this round of market activity is the demand for a new generation of servers represented by AI training and inference clusters.
Major cloud service providers and internet companies began locking in high-end HBM and server DRAM capacity in the second half of 2025, which not only pushed up the prices of memory used in AI servers but also further squeezed the wafer resources available for consumer-grade PCs and smartphones.
Industry tracking agencies estimate that server DRAM prices could rise by more than 60% in the first quarter of 2026. U.S. cloud computing firms started stockpiling early from the end of 2025 to secure bit supply for the first half of 2026.
The tilt in production capacity is translating into a comprehensive increase in end-device manufacturing costs. Previous research by Counterpoint on the smartphone supply chain showed that due to multiple rounds of price increases for DRAM and NAND, starting from the middle of 2025, the material costs of low-end models rose by an average of about 25%, mid-range models by about 15%, and high-end models by about 10%.
On this basis, if storage prices rise nearly twofold cumulatively in the first half of 2026 as indicated in the latest reports, the overall material cost of smartphones is expected to increase by an additional 8%-15%, making an upward trend in average selling prices unavoidable.
The PC and server sectors are also experiencing significant pressure. Prices of high-end DDR5 memory modules for enterprise and professional users have surged by about 50% in a single quarter, prompting some OEMs to reassess standard memory configurations and product pricing strategies.
In configurations targeting AI workstations, edge servers, and high-performance desktops, the share of memory and storage in total material costs has risen significantly, forcing manufacturers to rebalance configuration portfolios beyond GPUs and CPUs.
Downward revision of terminal shipment forecasts accelerates the transmission of price pressures to consumers.
While costs continue to rise, end-user demand has not expanded correspondingly. The latest forecast from Counterpoint shows that global smartphone shipments in 2026 may decline slightly, with overall shipment expectations revised downward by approximately 2%, with a greater impact on mid- and low-end models.
Research suggests that in an environment of persistently high storage costs, some manufacturers will reduce or delay the launch of entry-level new products, preferring instead to raise average selling prices to offset cost pressures. This will further compress the willingness of price-sensitive consumers to upgrade their devices.
For leading brands, strong bargaining power and economies of scale have, to a certain extent, cushioned the impact of this round of cost increases. Some large terminal manufacturers have locked in parts of storage resources and price ranges through long-term supply agreements, joint research and development, and supply chain finance, thereby creating maneuvering space across product lines and internalizing more of the pressure.
However, for small and medium-sized brands and unbranded manufacturers, with upstream quotations uniformly rising and downstream selling prices being difficult to significantly increase, profit margins have been noticeably squeezed. Some companies’ shipment strategies have shifted to “reducing low-end production and stabilizing the mid-to-high-end market.”
In the capital markets, this round of the storage 'super bull market' has been directly reflected in the earnings forecasts and stock price performances of leading companies. Represented by several major storage vendors in South Korea and the United States, their performance guidance for Q4 2025 to early 2026 generally indicates profits will grow multiple times year-over-year, which is widely attributed to the sharp rebound in storage prices and an increase in the proportion of high value-added products.
This divergence has also created clear 'winners' and 'reluctant bearers' within the chip industry chain. The robustness of upstream storage vendors contrasts sharply with the cost pressures faced by downstream assembly firms and some branded manufacturers.
Over the next few months, the market will remain focused on two main themes:
Whether storage vendors will significantly ramp up capital expenditures and capacity planning for 2026, potentially altering the supply-demand balance over a longer time horizon.
Whether the pace of AI infrastructure investment will slow down, thereby freeing up more available capacity for end products. Scenario analyses from multiple institutions suggest that if AI-related investments maintain current intensity, high storage prices may persist until the second half of 2026 or beyond. However, once new capacities are concentrated and demand marginally cools, the inflection point of this 'super bull market' could emerge around the next earnings season.
Editor/Jayden
