Memory market hits new highs as AI demand and server capacity reshape supply

Average contract prices for DRAM and NAND flash reached record levels in September, driven by surging demand for AI infrastructure and a shift of production towards server-grade products, according to market reports.

Average contract prices for DRAM and NAND flash both hit record levels in September, underscoring how the memory market is being squeezed by demand linked to artificial intelligence infrastructure and by a reallocation of production towards server-grade products, according to market data from DRAMeXchange and analysis from TrendForce.

DRAMeXchange said the September average fixed transaction price for standard PC memory, DDR4 8Gb 1Gx8, rose to $26, up 4.0% from $25 in August. NAND flash prices also increased, though only by 0.4%, and in both cases the pace of growth slowed from the previous month even as new highs were set.

TrendForce said the main pressure point is server demand, as cloud service providers continue to buy more server DRAM to support AI infrastructure expansion. That has reduced inventory at suppliers and pushed contract prices higher. The firm also pointed to rising output of high-bandwidth memory, or HBM, as a factor limiting the capacity available for conventional DRAM.

The impact is now spreading beyond data centres into the PC market. According to TrendForce, major manufacturers in South Korea and Taiwan have shifted more capacity towards server products, tightening supply of PC DRAM. In response, PC makers are building safety stock and adjusting product configurations to contain costs and prepare for further shortages.

Even so, market activity has cooled somewhat. After DRAM suppliers and PC original equipment manufacturers negotiated third-quarter contract prices in July and August, September trading shifted towards securing volumes for the fourth quarter and into next year, which helped reduce transaction activity.