Strongest Memory Price Surge in History? UBS Forecasts 35% QoQ DDR Price Hike, NAND Shortage to Last Until Q3 2026

The memory market is experiencing its strongest price surge in history amid persistent supply shortages.

According to UBS Group AG's latest report by the Nicolas Gaudois team, the memory industry is facing unprecedented supply-demand tension. For DRAM, supply shortages are expected to continue until Q1 2027, with DDR demand growing by 20.7%, far outpacing supply growth. Meanwhile, NAND shortages are projected to extend until Q3 2026.

This will drive the most robust memory price surge in nearly three decades. UBS forecasts DDR contract prices to rise 35% quarter-over-quarter (QoQ) in Q4 this year, while NAND prices are expected to climb 20%, significantly exceeding prior estimates. By Q1 2026, DDR contract prices could surge another 30%, with NAND prices rising another 20%.

Customers are actively securing long-term supply, with major cloud service providers extending pre-orders to 2028. Despite aggressive procurement efforts, inventory levels remain low—server DDR stocks stand at 11 weeks, PC and mobile DRAM at 9 weeks, and SSDs at 8 weeks—indicating strong underlying demand rather than speculative hoarding.

**Unprecedented Supply Shortages: NAND Until Q3 2026, DRAM Until 2027** UBS data reveals that DRAM supply shortages will persist until Q1 2027, with DDR demand growth (20.7%) significantly outpacing supply growth (18.6%). NAND shortages are expected to last until Q3 2026.

AI server demand is a key driver. UBS projects server shipments to grow 12.9% to 18.1 million units in 2026, with AI servers requiring higher memory capacity per unit. High-bandwidth memory (HBM) demand is also surging, expected to reach 27.67 billion Gb in 2026, up 59.9% year-over-year.

Traditional applications remain strong, with smartphones, PCs, and enterprise storage upgrades fueling steady growth.

**Customers Lock in Long-Term Contracts to Secure Supply** Facing tight supply, customers are shifting strategies—major cloud providers are signing pre-purchase orders (PPOs) extending to 2027 or 2028, securing volume without fixed pricing to allow for future hikes.

PC and smartphone makers face greater procurement risks, as they lack the bargaining power of cloud giants. UBS analysts note that even if double-digit QoQ price hikes seem unsustainable through 2026, customers may have to accept them to ensure supply continuity.

Low inventory levels further confirm tight supply-demand dynamics, reinforcing that price increases reflect real demand rather than speculation.

**Industry Reshuffle: Who Stands to Gain?** The report highlights SK Hynix's dominance in HBM, likely holding ~70% of the HBM4 market and becoming a key supplier for Google’s TPU 7p. Samsung is positioned as the secondary supplier.

UBS raised price targets for major memory players: SK Hynix to KRW 853,000 (Buy), Samsung Electronics to KRW 154,000 (Buy), and Nanya Tech to TWD 190 (upgraded to Buy).

Traditional server demand remains robust, with Dell'Oro reporting a 41.8% YoY surge in Q3 2025 server purchases, supporting stable earnings for memory suppliers.