Sigmaintell predicts the super cycle for DRAM, initially driven by AI computing demand starting in the second half of 2025, will continue throughout 2026. The firm forecasts a supply-demand shortage will persist across the DRAM market for the full year, although the rate of price increases is expected to diverge. Overall, the global average price increase for DRAM is projected to moderate from over 70% in the first quarter to a range of 30% to 50% in the second quarter. Price growth is anticipated to continue narrowing in the second half of the year, eventually stabilizing.
The demand structure for DRAM is undergoing a significant transformation. Since late 2025, explosive growth in computing power requirements from global AI servers and data centers has directly impacted the memory industry, causing substantial fluctuations in the supply-demand balance and prices of DRAM specifically. In terms of pricing, DRAM prices have seen significant quarter-on-quarter increases since Q4 2025. By the end of Q1 2026, cumulative price growth over the past six months exceeded 100%, marking the fastest rate of increase in nearly five years. Fundamentally, this super cycle is primarily driven by the "siphoning effect" of AI server demand for memory resources. Compared to traditional servers, AI servers require larger memory configurations (DDR and HBM), higher performance, and impose stricter standards for bandwidth, latency, and stability. This differentiated demand has triggered a structural reallocation of DRAM production capacity, leading to a supply-demand imbalance.
Within the DDR segment, which serves as the mainstay of the DRAM industry, supply dynamics are driving structural demand adjustments. The DDR product line is primarily divided into DDR and LPDDR categories, catering to different downstream applications. DDR4 and DDR5 mainly supply AI servers, traditional servers, PCs, tablets, TVs, and consumer IoT devices. LPDDR4X and LPDDR5X are focused on mobile terminals like smartphones, representing a core DRAM product in consumer electronics and a key component in the global smartphone supply chain. A divergence in demand growth is evident. Sigmaintell forecasts DRAM demand from AI servers will surge by 105% year-on-year in 2026, far outpacing the overall industry. In contrast, demand from traditional servers is projected to see only a mild 3% year-on-year increase, a significant deceleration from the 11% growth in 2025. For consumer electronics, DRAM demand is expected to decline year-on-year in 2026. Its share of total DRAM capacity (in gigabytes) is forecast to drop from 54% in 2025 to 42% in 2026, with demand suppression most pronounced in low-end segments like entry-level PCs, budget smartphones, and affordable IoT devices.
HBM (High Bandwidth Memory), the dedicated memory for AI server GPUs and a core enabler of AI computing power, is seeing its share expand rapidly, exacerbating supply tightness. HBM capacity demand is projected to grow 110% year-on-year in 2026. Furthermore, the transition to HBM4 mass production in 2026, with its higher stack layers and greater process complexity, will further increase wafer consumption per unit. According to Sigmaintell's estimates, HBM's share of global DRAM wafer capacity will exceed 20% in 2026. This allocation of wafer capacity to HBM further constrains the capacity available for DDR products, intensifying the overall supply shortage.
Considering the capacity allocation and demand shifts for both DDR and HBM, Sigmaintell's data indicates the global DRAM supply-demand balance shifted from a slightly loose equilibrium of approximately +8% in 2025 (supply slightly exceeding demand) to a deficit of around -12% in 2026 (supply falling short of demand by about 12%). This shortage is expected to persist throughout 2026. Against this backdrop, global DRAM prices are forecast to continue rising in 2026, but the rate of increase will feature "high growth in the first half and moderation in the second half," with divergent trends across different product categories and customer segments.
The price increase transmission path began in the server market, particularly for DDR and HBM used in AI servers, where urgent demand and capacity shortages triggered sharp price hikes first. As server market prices continued to climb, DRAM prices in the consumer electronics market gradually followed, creating a "servers lead, consumer electronics follow" pattern. In terms of contract prices, server DRAM maintained significant increases for three consecutive quarters from Q3 2025 through Q1 2026. By the end of Q1 2026, the average selling price for server DRAM had risen approximately 3 to 4 times compared to Q2 2025, with DDR4 prices increasing about 4-fold and DDR5 about 3.5-fold. Price increases in the consumer electronics market lagged behind. Starting in Q4 2025, facing procurement shortages due to high server market prices, consumer electronics brands were compelled to raise prices passively. This led to a rapid expansion of price increases in the consumer electronics sector from Q4 2025 to Q1 2026. Currently, at the end of Q1 2026, DDR contract prices in consumer electronics have increased approximately 2 to 2.5 times compared to Q2 2025, a significant rise but still lower on average than server market prices.
Based on these trends, Sigmaintell offers the following price outlook for Q2 and the second half of 2026. In the second quarter, DRAM prices are expected to continue rising, but with diverging growth rates. A key reason is that DDR prices in the consumer electronics market will gradually converge with those in the server market, narrowing the price gap and reducing upward momentum. DDR4 increases are expected to moderate first. DDR5 and LPDDR5X, however, may still have room for catch-up growth due to remaining price differentials, though the extent will vary. Overall, the global average DRAM price increase is projected to moderate from over 70% in Q1 to a range of 30% to 50% in Q2. In the second half of 2026, price growth is forecast to continue narrowing towards stabilization. Key supporting factors include a stabilization of capacity allocation by DRAM manufacturers, the gradual fulfillment of urgent inventory needs from AI server and cloud service providers, and a subsiding of panic-buying sentiment. Concurrently, weakening demand from the consumer electronics sector will gradually feed upstream, partially alleviating the supply-demand tension. Price increases are expected to further moderate to a range of 5% to 20% in the second half, with prices stabilizing at a high level by year-end. It is important to note that DDR4 price growth will moderate first in Q2, while DDR5 and LPDDR4X/5X categories are expected to maintain substantial increases due to ongoing support. This divergence will be a defining characteristic of the DRAM market in the second half of 2026.
Amid high DRAM prices and capacity shortages, the consumer electronics sector bears the most significant pressure. The proportion of memory costs within the Bill of Materials (BOM) for consumer electronic products has risen sharply, severely eroding profit margins. Brand manufacturers are forced to pass cost pressures to the end market, leading to widespread price increases for consumer electronics. These higher retail prices will suppress demand, particularly purchasing willingness among budget-conscious consumers, resulting in an overall decline in consumer electronics demand. In this environment, Sigmaintell believes consumer electronics brands can no longer maintain all markets and product lines comprehensively. 2026 is poised to become a critical "year of strategic choices." Some brands may abandon low-end markets or non-core product lines to focus on mid-to-high-end segments, prioritizing revenue and profit protection. Others may make choices regarding regional markets, scaling back in areas with weak demand to concentrate on core regions of strength. Some smaller brands, facing unsustainable cost pressures and product line challenges, may be forced to exit the market entirely.
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