DRAM Follow-up
As we noted yesterday in our note on DRAM pricing, the market for DDR4 remains tight as major memory producers shift production to highly profitable HBM memory to satisfy data center demand. Our note indicated our expectation that another round of memory price increases was in the offing as we head into the holiday build season, with smaller producers already indicating those increases are to come. Yesterday, it seems that Micron (MU), one of three major DRAM suppliers, indicated to its distributor and OEM clients that it will suspend price quotes for DRAM and NAND and is refusing to negotiate long-term contracts for 2026. This came about after Micron executives reviewed customer demand forecasts which indicated to them that the current shortage situation was going to get worse, even after informing customers of a pending 20% to 30% price increase in DRAM components. More specialized memory, particularly automotive components, could see increases above those levels
It seems that while spot prices are just beginning to move upward, the industry is already prepared for round two of DRAM price increases. Based on the Micron situation and the continued shift away from DDR 4 by major producers, we expect spot memory prices to rise quickly. At the same time the extreme supply/demand situation makes it more difficult to use the memory market as a proxy for judging whether tariff-related pull-in purchases will affect demand positively or negatively during the pre-holiday build period. It seems we need to find another test bed.
It seems that while spot prices are just beginning to move upward, the industry is already prepared for round two of DRAM price increases. Based on the Micron situation and the continued shift away from DDR 4 by major producers, we expect spot memory prices to rise quickly. At the same time the extreme supply/demand situation makes it more difficult to use the memory market as a proxy for judging whether tariff-related pull-in purchases will affect demand positively or negatively during the pre-holiday build period. It seems we need to find another test bed.
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