Prices, not volumes, drive the windfall
The world’s memory makers are collecting revenue on a scale the industry has never seen, and the people buying their chips are feeling the strain. Global DRAM revenue climbed 369% in the third quarter of 2026 compared with a year earlier, reaching just under $200 billion, according to Counterpoint Research. That is close to five times last year’s level.
The surprising part is how little extra product was involved. Shipments rose only about 4%. Nearly all the growth came from price, as demand from AI accelerators and data-centre servers kept supply tight and pushed selling prices to new records.
Why AI is swallowing the supply
Artificial intelligence workloads are memory-hungry. Training and running large models requires huge pools of fast memory sitting next to the processors, and companies building data centres have been buying as much as they can get. Chipmakers, in turn, have shifted production toward high-bandwidth memory and other premium products that earn higher margins, leaving less capacity for the ordinary chips used in phones and laptops.
MS Hwang, research director at Counterpoint, expects prices to stay elevated through next year. High-bandwidth memory, which lagged commodity DRAM in price increases for much of 2026, is now catching up, he said.
Consumers pay the price
The squeeze is showing up in consumer markets. Counterpoint reported that global smartphone shipments fell 20% year on year in the third quarter, the weakest July-to-September period since 2012. Retail phone prices have risen by around 20% this year as manufacturers pass on higher component costs.
Other devices are affected as well. PC makers and gaming-hardware companies face the same input-cost pressure, and analysts have warned for months that higher memory bills could mean pricier products, scaled-back specifications or delayed launches. For shoppers heading into the holiday season, that could translate into fewer discounts on gadgets.
Winners and the market’s mood
The beneficiaries are easy to identify. Memory producers and storage companies are reporting some of the strongest earnings in their history. On Wednesday, shares in Sandisk, Micron Technology and SK Hynix all rose by more than 10% as a broad rebound in AI-related stocks swept through the market, helped by strong results from cloud provider CoreWeave.
That rally followed a rough patch. Worries about a slower pace of data-centre construction triggered heavy selling across technology shares last week. The memory numbers offer a counterpoint, suggesting that demand for AI hardware remains intense, even if investors are debating how long the building boom can last.
How long can it last?
History offers a note of caution. Memory has long been a boom-and-bust business, with periods of shortage followed by gluts as manufacturers add capacity and demand cools. Building new fabrication plants takes years and enormous sums, which is why the current tightness has proved so durable.
Counterpoint’s view is that supply will stay constrained for now, and prices will remain high into 2027. If AI spending slows sharply, however, the cycle could turn faster than expected. Analysts are also watching whether customers begin to push back, by using memory more efficiently, delaying orders or looking for alternatives.
What to watch next
Several markers will show where the market is heading:
- Contract-price trends. Fresh quarterly negotiations between memory makers and big buyers will indicate whether prices are still rising.
- Data-centre spending plans. Any change in capital budgets from the largest cloud companies would feed straight through to memory demand.
- Consumer device pricing. Holiday-season launches and discounts will reveal how much of the cost increase buyers are willing to absorb.
For now, the message from the numbers is simple. The AI boom is not only reshaping software and chips. It is also changing what ordinary gadgets cost.
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