Demand for artificial intelligence (AI) servers is driving up prices for DRAM and high-bandwidth memory (HBM), boosting expectations for Samsung Electronics and SK Hynix. However, the sharp increase in memory prices is putting cost pressure on traditional IT devices such as PCs, smartphones, and tablets. The extent to which the server boom can offset the slowdown in general demand has emerged as a key variable for the memory market in the second half of the year.
According to industry sources, market research firm TrendForce forecasts that the contract price for general DRAM will rise by 13-18% in the third quarter compared to the previous quarter. It also predicts that NAND flash contract prices will increase by 10-15%. While the price increases are smaller than the 58-63% rise for DRAM and 70-75% for NAND in the second quarter, the upward trend continues.
At the center of this price surge is the demand from AI servers. Cloud service providers (CSPs) are increasing investments in AI training and inference servers, leading to a simultaneous rise in demand for HBM, server DRAM, and enterprise SSDs. Memory manufacturers are prioritizing production capacity for the more profitable HBM and server products.
As a result, the supply of memory for PCs and smartphones is becoming relatively tight. TrendForce notes that while PC manufacturers are continuing to replenish inventory, suppliers are shifting production capacity to server products, resulting in a decrease in PC DRAM supply. Smartphone manufacturers are also considering price increases in the third quarter to offset high mobile DRAM costs.
The burden on the device industry is reflected in the numbers. Gartner predicts that if DRAM and SSD prices rise by 130% this year compared to 2025, global PC shipments could decline by 10.4%, and smartphone shipments by 8.4%. Under the same conditions, PC prices are expected to rise by 17%, while smartphone prices could increase by 13%.
IDC's outlook is similarly cautious. IDC estimates that due to memory shortages, global smartphone shipments could decrease by 12.9% this year, reaching around 1.12 billion units, a drop of about 16 million units compared to the previous year. The average selling price is projected to rise by 14%, potentially reaching $523.
Industry analysts believe that lower-priced products will be the first to feel the impact. While high-end smartphones and premium PCs can pass on the increased memory costs to consumers, budget products may struggle to absorb the rising costs. Gartner has even suggested that the market for budget PCs priced under $500 could effectively disappear by 2028.
As memory prices soar, industry experts suggest that device manufacturers will have no choice but to raise product prices or reduce storage and memory specifications.
This situation is beneficial for Samsung Electronics and SK Hynix, as an increasing share of HBM and server DRAM sales improves average selling prices and profitability. Memory for AI servers commands higher prices than products for general PCs and mobile devices, and long-term supply contracts help stabilize volumes. Analysts in the securities market are also raising their performance forecasts for both companies based on the rising memory prices and expanded HBM supply.
However, some analysts caution that the memory boom does not necessarily indicate a recovery in overall demand. While demand from servers and data centers remains strong, consumer devices like PCs and smartphones are facing price resistance. TrendForce also points to weakened consumer market demand and high price burdens as reasons for the anticipated slowdown in price increases in the third quarter.
The home appliance and consumer electronics markets are not immune. Demand for general DRAM used in TVs, set-top boxes, and other consumer electronics is showing weakness. As memory manufacturers focus production capacity on high-value server products, supply for low-margin consumer electronics memory may become even more constrained.
Meanwhile, the HBM boom is expected to continue at least until 2027. TrendForce anticipates that as investments in AI infrastructure expand, demand for HBM and server DRAM will remain strong through 2026-2027, and the increased wafer input needed for HBM production will continue to pressure the supply of general DRAM. IDC also predicts that the memory supply burden in the smartphone and PC markets could extend beyond 2026 and into mid-2027. Consequently, the cost pressures on devices incorporating semiconductors, such as home appliances, PCs, and smartphones, are likely to increase.
An industry insider stated, "While the HBM boom is a positive factor for Samsung Electronics and SK Hynix, it is exerting cost pressure on device manufacturers. As server demand boosts the memory market, the PC and smartphone sectors are likely to face both price increases and demand declines simultaneously."
* This article has been translated by AI.
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