DRAM Prices to Double in Q1 2026 Due to AI Demand

The memory market is facing a significant shortage, with DRAM prices expected to nearly double and NAND flash prices also experiencing substantial increases in the first quarter of 2026. This surge is primarily driven by the growing demand for AI infrastructure, particularly for AI inference workloads. Hyperscalers and cloud service providers (CSPs) are rapidly deploying SSDs to support these workloads, putting a strain on supply chains. TrendForce revised its estimates, now predicting DRAM contract pricing to surge by 90-95% QoQ, while NAND prices are expected to increase by 55-60% during the current quarter. Higher-than-expected PC shipments in the fourth quarter of 2025 further exacerbated the shortages. OEMs like Dell and HP tend to purchase memory in bulk about a year in advance of demand. As inventories begin to draw down, and OEMs begin to restock, expect to see system prices climb. The increased demand for high-performance storage has far surpassed initial expectations as AI applications driven by inference continue to grow. As AI infrastructure continues its transition from mostly training to an inference dominated space, additional DRAM and storage are required. This situation has led to a scramble for memory, with leading North American CSPs rapidly increasing their procurement of enterprise SSDs. The model state is stored in something called the key-value cache. You can think of this as the model's short-term memory. During active use, like a chatbot session, this KV cache is computed and typically stored in HBM. When the session idles, that precomputed KV cache is then pushed to slower system memory, and in many cases eventually drops to a storage tier. By storing the KV cache, inference providers can dramatically reduce the compute required for extended multi-session inference while also improving the interactivity for users.

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