The memory market is once again raising alarms. This time, it’s not due to a simple temporary price fluctuation but because a more structural situation is beginning to emerge. Simon Chen, President of ADATA, has warned that the DRAM inventory levels held by major manufacturers are already approaching the “alert line,” with only about 3 to 5 weeks of stock remaining. In such a sensitive sector, this margin is very tight.
The warning comes at a time when Artificial Intelligence is profoundly disrupting the semiconductor supply chain. Not only due to the demand for high-bandwidth memory (HBM) for accelerators but also because of the cascading effect this priority is having on conventional DRAM, NAND Flash, and enterprise SSDs. What was recently seen as a problem mostly confined to data centers and large AI deployments is now clearly affecting PCs, mobile devices, servers, and consumer electronics.
Memory No Longer Has a Cushion, and the Market Is Acting Like a Seller’s Market
Chen’s statements, made in Taiwan after ADATA’s earnings report, depict a market that has ceased to operate normally. He explained that several large cloud service providers have already approached ADATA to secure long-term supply agreements—a move he described as unusual. When customers start to safeguard future purchases with such urgency, it typically signals fears that the market will worsen before stabilizing.
ADATA itself has prepared for this scenario. The company announced that it had accumulated approximately 30 billion Taiwanese dollars’ worth of inventory by the end of February and expected to surpass 35 billion by the end of March. The key aspect is not just the figure but the timing of these purchases: part of that inventory was acquired when costs were still significantly lower than current prices. This helps explain why the company is so optimistic about 2026: it enters this phase with stock on hand, whereas others will have to buy at higher prices and possibly later.
Chen also delivered another important message: NAND shortages could worsen even further in the second half of the year due to the surge in AI inference, which is increasing demand for enterprise SSDs. In other words, the problem no longer limits itself to RAM. Storage is beginning to follow the same trajectory.
DRAM and NAND Prices Skyrocket While AI Absorbs Capacity
TrendForce’s data supports this outlook. The consultancy revised upwards its forecasts for the first quarter of 2026, now expecting quarterly increases of 90% to 95% for conventional DRAM and 55% to 60% for NAND Flash. For enterprise SSDs, contractual prices could increase by 53% to 58% during the same period.
The main reason remains the same: demand from data centers and AI workloads is outpacing available capacity. TrendForce notes that memory suppliers are focusing heavily on more profitable products, while supply for other segments becomes tighter. Additionally, some capacity is being diverted toward server DRAM and advanced infrastructure memory, leaving less room to serve PCs, laptops, or smartphones.
As a result, the market clearly favors manufacturers. ADATA itself is already talking about a “seller’s market,” where those with products set the terms, and those needing memory must accept higher prices, delays, or reduced availability. This isn’t an exaggerated statement given recent sector behavior.
Impact Begins to Show in Mobile Phones, PCs, and Consumer Electronics
Although technical discussions often center around AI infrastructure, the impact on consumer markets is becoming evident. Counterpoint Research estimates that global smartphone sales could fall by 12% in 2026 to below 1.1 billion units—the lowest level since 2013. Meanwhile, the average selling price could rise to $523, setting a record.
This movement makes sense. When memory prices rise so rapidly, manufacturers of mobile and computers have less room to absorb the hit. High-end segments might still pass some costs onto consumers, but mid- and low-range devices face a much more delicate situation. Sometimes, the consequences will be higher prices, but also more limited configurations, less variety, or postponed launches.
Furthermore, the situation doesn’t seem to be resolving soon. Nanya Technology, another key player in the sector, warned earlier this week that DRAM shortages could persist until 2028—due to AI-driven demand and slow capacity additions. This suggests that we are facing a longer-term shift rather than a temporary blip in the market.
In this context, ADATA’s warning is even more significant. It’s not just a company taking advantage of the moment to boast about forecasts; it’s a clear sign that safety margins are shrinking and that competition for memory and storage hardware will intensify throughout 2026. For manufacturers, integrators, distributors, and consumers, the lesson is becoming clear: the era of cheap memory is over—at least for now.
Frequently Asked Questions
Why are DRAM prices expected to rise so much in 2026?
Because data center and AI demand is absorbing much of the supply, while new capacity is slow to arrive. This has reduced available stock and increased manufacturers’ bargaining power.
What does it mean that DRAM inventory is near the “alert line”?
It indicates that manufacturers and distributors have very little safety margin, around 3 to 5 weeks of stock according to ADATA. When this cushion diminishes, any spike in demand can lead to price increases or supply issues.
Does DRAM shortage also affect SSDs and NAND memory?
Yes. Both ADATA and various analysis firms indicate that the NAND market is also tightening, primarily due to strong demand for enterprise SSDs used in AI workloads and inference.
How could this memory crisis impact mobile phones and computers?
It could lead to higher prices, fewer models available, tighter configurations, and more cautious launches—especially in mid- and low-range segments where manufacturers have less leeway to absorb increased costs.
via: IThome