TrendForce sharply revises its outlook for memory prices, warning that sustained AI and data centre demand is pushing the global memory market into an unprecedented supply squeeze
New forecasts from TrendForce suggest the memory industry is heading for its steepest-ever quarterly price increases, with contract prices for all major DRAM and NAND Flash product categories now expected to rise to record levels in the first quarter of 2026. The outcome will have a dampening effect on the entire consumer PC and smartphone market globally. Big tech has sold the farm on AI and we are all along for the ride.
According to TrendForce’s latest industry survey, persistent demand from AI workloads and hyperscale data centres is worsening the imbalance between supply and demand, significantly strengthening suppliers’ pricing power. As a result, the firm has raised its projection for conventional DRAM contract prices in 1Q26 to increases of a whopping 90–95% quarter-on-quarter, up sharply from an earlier forecast of 55–60%.
NAND Flash contract prices have also been revised upwards, from 33–38% to 55–60% QoQ, with TrendForce cautioning that further upward adjustments remain possible. The revised outlook follows stronger-than-expected PC shipments in the fourth quarter of 2025, which TrendForce says have led to a broad shortage of PC DRAM. Inventory levels are falling even among tier-one PC manufacturers with secured supply agreements, as the market shifts decisively in favour of sellers.
In this environment, PC DRAM prices are now expected to more than double quarter-on-quarter in 1Q26, setting a new record for a single-quarter increase.
Supply pressures are also intensifying in the server segment. TrendForce reports that major cloud service providers (CSPs) and server OEMs in North America and China have continued negotiating annual long-term DRAM agreements into January, competing for limited available capacity. This competition is expected to push server DRAM contract prices up by around 90% QoQ in 1Q26, also marking the largest quarterly rise on record. Memory suppliers are being forced to carefully allocate output based on assessments of actual customer demand while preserving relationships with strategic accounts.
Rolling impacts
The tightening DRAM market is having knock-on effects across end-device categories. Contract prices for LPDDR4X and LPDDR5X are both forecast to surge by around 90% QoQ in 1Q26, reflecting heightened competition for allocations. TrendForce notes that most contracts with US-based smartphone brands were finalised late last year, while negotiations with Chinese vendors are expected to accelerate after the Lunar New Year period.
On the NAND Flash side, demand is similarly outstripping supply. Although 1Q26 orders are forecast to far exceed production capacity, memory manufacturers remain focused on maximising DRAM profitability and are reallocating parts of their manufacturing lines accordingly. This strategic shift is further constraining NAND Flash supply, with short-term capacity expansion limited to incremental process improvements.
Rising AI inference workloads are also driving unexpectedly strong demand for high-performance storage. Since late 2025, leading North American CSPs have ramped up procurement, fuelling a surge in enterprise SSD orders. TrendForce now expects enterprise SSD prices to increase by 53–58% QoQ in 1Q26, another record quarterly rise, as buyers stockpile inventory amid deepening supply shortages.
