The upward momentum in memory chip pricing is clearly decelerating. Latest data from Bernstein indicates that the sequential quarterly increase for DRAM and NAND contract prices in the third quarter of 2026 has narrowed to approximately 20%, a significant slowdown from the second quarter and potentially below the broader market's latest expectations. While supply shortages are expected to persist into 2027, the scope for price increases is being squeezed by demand-side resistance and price caps embedded in long-term agreements.
According to the July memory price tracking report from Bernstein, as cited by the Trading Desk, traditional DRAM saw a sequential quarterly increase of about 17% in the third quarter. This figure slightly exceeds the firm's own model projections but may fall short of certain market expectations. For NAND, when including SSDs, the overall sequential increase nears 20%, aligning closely with the model, though it also risks underperforming the most optimistic forecasts.
Bernstein analyst Mark Li noted in the report that memory is increasingly becoming a cost burden for both AI and non-AI applications. Price caps set in some long-term agreements (LTAs) are also curbing further appreciation potential. He believes that the recent stock price corrections create opportunities for short-term technical rebounds, but the headroom for price increases has become limited.
DRAM: Strong Server Demand, but Growing Resistance from PCs and Mobile Phones
The DRAM market is showing clear internal divergence. Server demand remains robust, with customers anticipating tighter supply conditions in 2027 and showing a strong willingness to stock up proactively. Data from TrendForce shows that server DRAM contract prices rose by 8% to 15% sequentially in July, with the overall sequential increase for the third quarter expected to be between 13% and 18%. However, for customers who have signed LTAs with price caps, July prices have already approached the contract ceiling, creating a noticeable gap compared to quotes for non-LTA customers.
The PC and mobile segments present a starkly different picture. PC DRAM contract prices increased by 13% to 16% sequentially in July, with a sequential increase of about 17% projected for the third quarter. However, OEMs are raising end-product prices due to higher memory costs, leading to an expected sequential decline of over 10% in PC shipments for the third quarter and a significant reduction in purchasing willingness.
For mobile DRAM, TrendForce forecasts a sequential quarterly increase of approximately 10% in the third quarter, a notable slowdown from the second quarter. After reducing their smartphone production plans, mobile OEMs are showing significantly stronger resistance to price hikes. Looking ahead to the fourth quarter, TrendForce expects the sequential increase in mobile DRAM prices to narrow further to single digits.
Consumer DRAM has performed relatively strongly, with contract prices rising 12% to 16% sequentially in July and a sequential increase of 24% to 30% expected for the third quarter. However, TrendForce has observed that spot prices have begun to lag behind contract prices, suggesting that demand may be peaking.
NAND: Wafer Price Rally Falters, SSDs Become the Main Support
The divergence in the NAND market is even more pronounced. Wafer contract prices remained largely flat in July, as module makers, facing weak end-consumer demand, refused to accept further price increases, leading to a sharp contraction in trading volumes. TrendForce points out that against the backdrop of subdued consumer demand, module makers believe NAND wafer prices are already high and are more inclined to consume their own inventory.
Mobile NAND (eMMC/UFS) has performed relatively better, with TrendForce forecasting a sequential quarterly increase of about 20% in the third quarter, mainly driven by a catch-up logic to align with eSSD profitability levels. Notably, Chinese suppliers are winning more shipment share in this cycle by offering lower prices.
SSDs are the core support for the NAND sector. Bernstein believes that client and enterprise SSD contract prices will see a sequential quarterly increase of about 20% in the third quarter, lifting the overall NAND sequential increase to near 20%. However, the firm also notes that the pace of NAND price increases will continue to slow, with a peak potentially occurring at some point in 2027, and that intensifying competition from China constitutes a structural pressure.
Short-Term Rebound Window Exists, but Upside Space is Limited
Bernstein maintains an "Outperform" rating on Samsung Electronics, SK Hynix, Micron Technology, and SanDisk Corp, with target prices of 440,000 Korean Won, 3,300,000 Korean Won, $1,300, and $3,000, respectively. The firm rates KIOXIA as "Underperform" with a target price of 40,000 Japanese Yen.
The agency believes that while memory supply shortages will extend into 2027, keeping prices elevated, the room for further increases has been noticeably compressed. On one hand, PC and mobile customers have stable or even rising inventories, and their significantly reduced shipment plans have led to a sharp decline in their acceptance of price hikes. On the other hand, price caps embedded in some LTA agreements are limiting the pricing power for server DRAM. Additionally, the continuous rise in memory costs is beginning to burden both AI and non-AI applications, and signs of demand-side pressure cannot be ignored.
Bernstein points out that the recent pullback in memory stocks offers entry points for a short-term technical rebound. However, investors should be wary of the risks associated with the tail end of the pricing cycle – the price peak may be visible, rather than a distant horizon.
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