URGENT UPDATE: The global memory crisis is set to persist, with industry giants Samsung and SK Hynix confirming they will not significantly increase production capacity. This decision raises alarm bells as analysts predict that high DRAM prices could extend through 2028 and beyond.
During a recent investor relations call, a Samsung representative stated, “We will pursue a strategy of maintaining long-term profitability,” emphasizing a cautious approach to capital expenditures. This strategy includes minimizing the risk of oversupply in a market where current demand outstrips supply by a significant margin. Presently, Samsung reports it can only fulfill 70% of DRAM orders.
Meanwhile, SK Hynix has expressed a slightly more aggressive investment outlook, but the company cautioned that meeting the surging demand will still be challenging. Silicon Motion’s CEO highlighted the unprecedented nature of the shortages, stating, “We’re facing what has never happened before: HDD, DRAM, HBM, NAND… all in severe shortage in 2026.”
In a stark reminder of the gravity of the situation, both companies announced price hikes of up to 30% on memory products, driven largely by the explosive growth in AI data centers. As demand skyrockets, experts predict a decade-long “pricing apocalypse” for SSD and RAM components.
Samsung plans to invest approximately 30% of its sales into production facilities in 2026 to transition to new technologies like 1c DRAM. However, they warn that resolving the supply shortage will be far from easy. The company is also reluctant to enter into long-term contracts with customers, fearing that rapid price increases could leave them with excess inventory. “Customers want long-term contracts of several years, but Samsung Electronics does not want to tie up volumes with a specific customer in a situation where prices are rising rapidly,” the Samsung rep stated.
Despite forecasts suggesting that memory supply will increase by 23% in 2026, demand is expected to surge by 35%, exacerbating the crisis. US-based Micron is investing nearly $10 billion in a new DRAM facility in Japan, but production won’t begin until the second half of 2028.
As the AI boom continues to drive demand, the memory market remains precarious. Experts caution that the current strategy of cautious production increases may be an attempt to avoid a potential market collapse should the AI demand bubble burst.
With memory prices expected to remain elevated, consumers and businesses alike should brace for ongoing challenges in sourcing affordable memory solutions. The implications of this crisis extend far beyond the tech industry, affecting everything from personal devices to enterprise-level solutions.
Stay tuned for more updates as this developing story unfolds.
