Data centers now take most of the output
The memory chip market has flipped. Data centres, built to train and run AI models, are now estimated to consume about 70% of the memory chips produced worldwide, according to IDC. The three companies that make more than 95% of global DRAM — Samsung, SK Hynix and Micron — have moved production lines toward high-bandwidth memory, the stacked chips that sit beside AI accelerators.
High-bandwidth memory now takes roughly 23% of DRAM wafer capacity, up sharply from a few years ago. That capacity has to come from somewhere. It came out of the ordinary DRAM and NAND flash used in laptops, phones, tablets and cars.
Prices double and buyers get allocated
DRAM prices have roughly doubled since early 2025. Supply growth for 2026 is projected at about 16% for DRAM and 17% for NAND, both below the 20% to 30% range that was normal in past cycles. IDC expects PC, tablet and smartphone prices to rise 10% to 20% by the end of the year.
Shipments are shrinking as a result. Smartphone shipments are projected to fall 12.9% in 2026, and the PC market faces an 11.3% contraction. Device makers say they are being allocated fewer chips than they ordered, and some are cutting memory in base models to hold prices down.
Why the shortage is slow to fix
Adding wafer capacity takes years. A new fab needs land, water, power, tools and trained staff, and the equipment queue is long. Memory makers are also cautious: they remember previous cycles when extra capacity turned into a price crash. Analysts expect tight supply well into 2027.
The shortage is now a political topic as well. Investors have started asking whether the returns on AI spending justify the build-out, and a few large technology stocks sold off on those questions this week. Chip supply agreements have become bargaining chips in trade talks, and governments are pushing for domestic plants.
For consumers, the practical effect is simple: the same laptop costs more than it did last year, and the discount season will be thinner. For manufacturers, the pressure runs through the whole chain, including vacuum equipment used to deposit and etch the layers inside every one of those memory chips.
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