Memory Makers Adjust Focus Toward Server Applications Leading to Significant Price Increases in 1Q26

Memory Market Dynamics in 1Q26

As we step into the first quarter of 2026, the memory market is set to experience notable changes that reflect the evolving demands of technology, particularly from AI-related applications. According to the latest research from TrendForce, conventional DRAM contract prices are projected to surge by an astonishing 55-60% quarter-on-quarter (QoQ). This steep rise is mirrored in the NAND Flash sector, where prices are anticipated to climb between 33% to 38% QoQ.

The catalyst behind these price escalations can be attributed to the ongoing disparity between supply and demand in the DRAM market. U.S.-based cloud service providers (CSPs) have been aggressively securing capacity, thereby leaving other buyers with no choice but to accept the higher pricing landscape. Specifically, server DRAM prices are expected to increase by over 60% QoQ, buoyed by heightened requirements for AI server infrastructure.

TrendForce's analysis indicates that as the DRAM supply continues to be reallocated towards server and high bandwidth memory (HBM) products, many other sectors are beginning to feel a pinch. This reallocation has inevitably led to a decline in supplies for conventional DRAM products, thus contributing to an upward price trajectory.

Impact on PC and Mobile Memory Sectors

Despite a downturn in notebook shipments and concerns over slower overall memory demand, the prices for PC DRAM are anticipated to witness a remarkable spike in the first quarter. DRAM suppliers are tightening their supply chains to original equipment manufacturers (OEMs) and module makers, compelling them to source memory at inflated prices. Consequently, branded module prices are also on track to increase significantly, thus elevating PC DRAM price levels.

Interestingly, while smartphone brands typically face reduced memory demand during a seasonal lull, they too will be challenged by a tight supply of mobile DRAM. This situation is expected to persist, pushing contract prices even higher in the coming quarters. Many brands are proactive in their procurement efforts in Q1 2026, signaling a strong appetite for memory resources amidst predicted shortages.

The markets for LPDDR4X and LPDDR5X are particularly affected, sustaining undersupply issues due to an uneven distribution of resources, further fueling price increases. Additionally, the demand for graphics DRAM has moderated, notably influenced by lower sales forecasts for Nvidia's RTX 6000-series and some reductions in shipments from PC OEMs. However, a constraint on supply persists, due to shared production technologies related to DDR5.

Rising Demand for NAND Flash

Shifting attention to the NAND Flash market, TrendForce remarks that although demand from client SSDs is anticipated to go down, especially with declines in notebook shipments, the overall server market is set to thrive in 2026 as North American CSPs boost their investments in AI infrastructure. This is projected to position enterprise SSDs prominently as the leading application segment for NAND Flash products.

With an emphasis on enhancing profit margins, suppliers are pivoting from client SSDs toward data center SSDs, contributing to a scarcity of high-capacity, low-cost QLC products. As a result, contract prices for client SSDs are likely to rise by at least 40% QoQ, marking a standout increase in comparison to other NAND Flash products.

On the front of eMMC and UFS products, smartphone demand is facing challenges. Having experienced an overaccumulation of inventory following aggressive promotional periods, the current trajectory suggests a significant drop in smartphone shipments on a QoQ basis. Although Chromebook shipments might show resilience, it's amidst an overall lackluster demand for eMMC/UFS products.

Conclusion

Ultimately, the memory market in Q1 2026 presents a mixed yet challenging scenario where strong demand from AI server applications fuels significant price rises across both DRAM and NAND Flash sectors. Supply constraints will likely continue to impact various categories, leading to ongoing price surges. It’s a testament to the dynamic nature of technology markets, where the pulse of AI is driving new supply and demand paradigms.

For those keeping a finger on the memory market's pulse, this period represents a critical juncture not just for pricing strategies but for technological advancements that are reshaping industry landscapes.