DRAM supply shortages have led to soaring prices, which have already increased by 50% since 2025 and are projected to rise another 30% in the fourth quarter and another 20% by early 2026. Recent reports indicate that the DRAM price surge has already impacted GDDR memory used in graphics cards, with Nvidia and AMD planning supply and price adjustments. While many industries, including automotive, server, and smartphone manufacturing, are stockpiling months' worth of inventory, this is insufficient to offset the continued supply shortages and price increases.
Market demand for HBM is consuming significant capacity, requiring three times the wafers of regular DRAM. Simultaneously, data center demand for DDR5 is surging, with DDR5 server memory prices expected to continue rising until the end of 2026, potentially doubling year-over-year.
Next year, Nvidia will switch its data center product line to the Vera Rubin platform, which, combined with the existing Grace Blackwell platform, utilizes LPDDR5X. This increased capacity will further drive up demand. Each Grace CPU comes equipped with 480GB of LPDDR5X memory, compared to only 16GB in high-end smartphones; the Vera CPU will double that capacity.
Nvidia's increased use of LPDDR has put pressure on smartphone manufacturers, as the supply chain struggles to handle such a massive increase in demand. Lower-end LPDDR4(X) and DDR4 have already been affected, experiencing price inversions, with prices not only higher than LPDDR5(X) and DDR5, but also higher than HBM products.
With Samsung, SK Hynix, Micron, and Changxin Memory (CXMT) ramping up production, DRAM output is projected to grow by more than 20% in 2026.
