The price surge in the memory market is far from over, and this time, the pressure is spreading from high-end HBM and DDR5 to mature memory products such as DDR4 and SLC NAND.

According to Morgan Stanley's latest forecast, the supply shortage of mature DRAM and NAND is worsening. The firm predicts that prices for mature DRAM such as DDR4 may rise by 50% in the third quarter of 2026, and will continue to rise by more than 10% in the fourth quarter; the price increase for SLC NAND is even more aggressive, with prices expected to rise by more than 50% in both the third and fourth quarters of this year.

Price of Memory

This means that the memory market is facing a rather unique situation: on one hand, AI data centers are continuously vying for HBM and high-capacity DDR5 capacity; on the other hand, DDR4, which was previously considered to have entered its mature stage and was even gradually withdrawing from the mainstream market, has suddenly become a "scarce resource" again due to supply contraction.

Why has DDR4 suddenly become so expensive?

Morgan Stanley believes the core reason for the current supply shortage of DDR4 and SLC NAND is not a sudden surge in demand, but rather a proactive contraction in supply.

Over the past few years, major memory manufacturers such as Samsung, SK Hynix, and Micron have continuously adjusted their product structures, shifting limited wafer capacity to HBM, DDR5, and higher-layer 3D NAND. Especially after the surge in demand for AI servers, HBM has become one of the most fiercely contested products among memory manufacturers, while DDR5 has also seen rapid growth with the widespread adoption of AI servers and next-generation PC platforms.

The problem is that memory manufacturers cannot increase wafer capacity indefinitely. Even if overall DRAM demand continues to grow, new capacity must prioritize HBM and high-end server DRAM, meaning that the wafer resources available for mature products like DDR4 are becoming increasingly scarce.

In other words, DDR4 isn't suddenly unwanted; rather, there are fewer and fewer manufacturers producing it.

This also explains why mature memory prices have risen against the trend. As major suppliers gradually reduce DDR4 production, market inventory and new supply continue to decline. Meanwhile, some servers, PCs, industrial equipment, and other traditional electronic products are still unable to immediately switch from DDR4 to DDR5, causing the supply-demand gap to widen rapidly. Previously, the market expected DDR4 prices to rise by 10% to 20%, but this expectation has now been raised to around 50% in the third quarter, indicating that the rate of supply contraction has exceeded previous estimates.

HBM is consuming more and more DRAM capacity

To understand why DDR4 has become a "victim," we must start with HBM.

Compared to regular DDR4 and DDR5, HBM is significantly less efficient at consuming wafer resources. HBM requires vertical integration of multiple DRAM dies using technologies like TSV and stacking, and also necessitates larger peripheral circuitry and redundant design. Therefore, producing the same capacity of HBM requires more DRAM wafers.

More importantly, the demand for HBM is growing rapidly.

For example, market analysts predict that with the continued ramp-up of next-generation AI platforms like Rubin, their demand for HBM will continue to increase significantly. UBS has repeatedly raised its HBM demand forecast, projecting global HBM demand to reach approximately 58 billion Gb in 2027, with the latest market forecast further increasing it to approximately 61.5 billion Gb; Nvidia alone is expected to consume approximately 25.1 billion Gb, accounting for about 40% of global demand.

This means that the growth of AI computing power is actually impacting the entire memory industry in a very wafer-intensive way.

Behind every AI GPU lies not only advanced process computing chips but also a significant amount of HBM (High-bandwidth Medium Memory) as high-bandwidth memory. As GPU computing power increases and the HBM capacity per GPU grows, HBM's share in the overall DRAM industry continues to rise, ultimately squeezing the production resources available for traditional DRAM.

Therefore, the current memory market is no longer simply about "DRAM demand growth," but rather a clear **product structure migration**: wafers are migrating from DDR4 to DDR5, and then further from DDR5 to HBM. Simultaneously, NAND is upgrading from traditional products to higher-layer, higher-capacity products.

For memory manufacturers, this represents a higher-value product portfolio; however, for customers still reliant on mature memory technologies, it means increasingly tight supply.

DDR5 has not seen a price reduction

More noteworthy is that while DDR4 saw the most dramatic price increases, DDR5 has not experienced a price drop either.

According to Bank of America data, the spot price of DDR5-5600/6400 24GB rose approximately 8% month-over-month in August, and by about 483% year-over-year. In mid-2025, this type of 24GB DDR5 product was priced at around $8, while it is currently approaching $47.

This means that DDR5 itself remains in a state of supply shortage.

From the perspective of the end-market, this price increase has become very pronounced. Recent price data in the PC memory market shows that the prices of some DDR5 kits have increased several times over in the past year, and some high-capacity products have even reached several times their historical lows.

The logic behind this is actually different from that of DDR4.

DDR4's price increase was mainly due to continued supply reductions, while DDR5 is simultaneously affected by "demand growth and supply structure adjustments". On the one hand, servers, PCs, and AI infrastructure are continuously increasing the usage of DDR5; on the other hand, storage manufacturers must invest more resources in HBM, further limiting the supply of ordinary DDR5.

Therefore, a very interesting phenomenon has emerged in the market: DDR4 is experiencing price increases due to its "exit," DDR5 is rising in price as it "takes over," and HBM is becoming the product with the most scrambled production capacity due to the surge in AI demand.

These three factors ultimately form an interconnected memory price chain.

Mature memory chips are once again becoming a "strategic resource"

From an industry perspective, the most noteworthy aspect of this round of price increases is not how much DDR4 will rise in the short term, but rather that "mature memory is transforming from a low-value product into a scarce resource".

In the past, DDR4 had entered a mature stage, and the market generally believed that as DDR5 gradually became mainstream, DDR4 prices would continue to decline, eventually exiting the mainstream market. However, reality has reversed: when suppliers actively reduced DDR4 production capacity, and downstream devices could not complete a full upgrade in the short term, a supply gap for DDR4 was created.

This is a very typical characteristic of the memory industry—mature products do not mean they have no value; the price is always determined by supply and demand.

Especially in the industrial, automotive, network equipment, consumer electronics, and some server sectors, product lifecycles are often much longer than PC platforms, and many devices cannot immediately change their memory architecture just because DDR5 is available. For these customers, DDR4 remains a necessity.

Therefore, as long as major memory manufacturers continue to allocate wafer resources to HBM and high-end DDR5, the DDR4 supply shortage will be difficult to alleviate quickly.

SLC NAND faces a very similar situation. As NAND manufacturers continue to migrate to high-number 3D NAND and high-capacity products, the production capacity of mature products such as SLC is being continuously squeezed. Morgan Stanley even predicts that SLC NAND prices may rise by more than 50% in the third and fourth quarters of 2026.

This means that the memory supercycle brought about by AI is no longer just a story of HBM.

From HBM to DDR5, and then to DDR4 and SLC NAND, AI is transmitting price increase pressure to the entire memory industry through the path of "capacity migration."

If this trend continues, then what truly deserves attention in the second half of 2026 may not be "whether memory prices will continue to rise," but rather how long the price increases will last, and when the supply gap of mature memory will truly be alleviated.

Source: Content compiled from Semiconductor Industry Observer

View more at EASELINK