With artificial intelligence (AI) driving the memory industry into a "historic upcycle," Micron Technology (MU.US) and SanDisk Corp. (SNDK.US) are poised for sustained gains, according to BNP Paribas. Analyst Karl Ackerman noted in a client report, "As consumer DRAM and NAND TLC spot prices surged 408% and 165% year-over-year in November, respectively, we believe DRAM and NAND are entering a historic upcycle that could extend through 2026. We remain bullish on the memory and storage supply chain, though companies with higher exposure to data center businesses will outperform."
Ackerman further analyzed that DRAM average selling prices (ASPs) are expected to rise 35% quarter-over-quarter in Q4, followed by a 10% increase in Q1 2026, primarily due to persistent supply constraints. Similarly, NAND prices are projected to climb 15% in Q4 and 7% in the next quarter.
"Since 1999, DRAM upcycles have lasted an average of eight months, with ASPs rising 53% from trough to peak, while NAND cycles typically span six months with a 40% price increase," Ackerman explained. "The current DRAM upcycle is now in its fifth month, with prices up 55% from the bottom, while NAND is in its fourth month, up 51%. However, we expect this cycle to be more prolonged for both. The widening spot/contract price gaps—45% for DDR4, 89% for DDR5, 47% for 256Gb TLC, and 9% for 512Gb TLC—signal further price hikes ahead."
The "supercycle" in memory chips has arrived, with shortages potentially lasting until 2026. Following ChatGPT’s 2022 launch and the generative AI boom, coupled with a global wave of AI data center construction, memory chipmakers have shifted capacity toward high-bandwidth memory (HBM). Intensifying competition from Chinese rivals has also pushed Samsung and SK Hynix—which control ~70% of the global DRAM market—to accelerate their transition to advanced chips. These manufacturers began adjusting strategies in early 2025, gradually phasing out DDR4 production with plans to fully halt it by late 2025 to early 2026, reallocating capacity to higher-margin DDR5 and HBM products.
Morgan Stanley estimates tech giants like Google, Amazon, Meta, Microsoft, and CoreWeave will invest $400 billion in AI infrastructure this year. This AI boom coincides with a refresh cycle for traditional data centers and PCs. Analysts highlight that stronger-than-expected smartphone sales have further strained non-HBM memory supply, fueling price surges. For instance, 4GB DDR4X chip spot prices skyrocketed from $7/unit early this year to over $30/unit by mid-November—a 3-4x jump—while 64G eMMC flash memory prices rose nearly 1.5x from $3.2 to over $8/unit. Additionally, rising demand for eSSDs in overseas AI servers has triggered sharp NAND price hikes alongside DRAM.
As general memory supply tightens, the industry is accelerating into what analysts call a "supercycle," with device makers frantically stockpiling chips. "Demand has exploded over the past two months. The market is moving at a breathtaking pace," said Tobey Gonnerman, President of semiconductor distributor Fusion Worldwide. "Panic buying is escalating and will continue. Customers are widely double- or triple-ordering, mirroring past shortage scenarios."
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