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AI-Fueled Memory Squeeze Triggers Steep Q1 Price Hikes and Windfall Profits

AI data centers are diverting wafer capacity to HBM plus server DRAM, shrinking the pool of chips for consumer devices.

Overview

  • Samsung is expected to report about a 160% jump in Q4 operating profit, with analysts citing surging memory prices as the key driver, according to LSEG SmartEstimate reported by Reuters.
  • Suppliers are prioritizing AI-grade memory, with reports out of Korea indicating proposed 60%–70% quarter-over-quarter increases for server DRAM in Q1 as TrendForce tracks 55%–60% jumps in conventional DRAM contracts and a 314% year-over-year spike for some DDR5 in Q4.
  • Samsung executives called the shortage unprecedented and signaled that consumer product repricing may be unavoidable as costs rise across smartphones, PCs, TVs, and appliances.
  • Large buyers are locking supply, with DIGITIMES reporting Apple has secured NAND through early 2026 while facing DRAM contract negotiations that may require sequential price increases of more than 50%, and local media describing procurement teams stationed in South Korea.
  • Memory and storage equities rallied after Nvidia’s CEO said storage is a “completely unserved” market, while market researchers and banks warned tightness could persist into 2027 and lift device prices roughly 5%–20% in 2026.