Supply-Demand & Price Trend Brief: Storage Chip Market
I. Spot Market Circulation ≠ No Shortage; Tight Supply and Rising Prices Are Inevitable
The sporadic spot supplies currently circulating in the market are mostly small batches of inventory released by distributors in the short term, which by no means indicates sufficient supply and is completely unable to meet the demand for large-scale and continuous procurement.Starting from Q3 2025, the storage chip market has ushered in an unprecedented price surge: prices of core product categories have skyrocketed by 171.8% year-on-year. Since September, the spot prices of DRAM and NAND Flash have surged by over 300% cumulatively. The entire product range has seen a scarce pattern of “ample capital but scarce goods”, with absolutely no room for price cuts in the future. Do not misjudge the market supply-demand dynamics based on sporadic spot availability.
II. Current Market Status: Three Core Observations Validate the Trend of Tight Supply & Firm Prices
1. Short-Term Spot Supplies Do Not Equal Ample Supply; Price Surges Keep Breaking Records
The available spot stocks are mostly from distributors’ short-term inventory clearance or the circulation of used products. In spot markets like Huaqiangbei, certain DDR4 models have surged from $3 in Q2 2025 to $70 in December, marking an over 20-fold price hike. DDR5 spot prices soared 25% month-on-month in November, while consumer-grade NVMe SSD prices have cumulatively jumped over 250%. Even DDR4 16GB memory modules, which are gradually phasing out of the mainstream, have registered a year-on-year price increase of over 200%. Both original manufacturers and distributors are adopting a reluctant-to-sell stance, resulting in a one-way upward trend for spot prices with no signs of a decline.
2. Capacity Diversion by Leading Manufacturers; Structural Shortage Contradictions Intensify
The three industry giants—Samsung, SK Hynix, and Micron—have fully shifted their production capacity toward AI-related high-end storage products. They phased out DDR4 production in 2025 and are now focusing on DDR5, LPDDR5, and HBM products. The market share of HBM in the memory sector has skyrocketed from 8% in 2023 to 33% in 2025. The preemption of high-end production capacity has directly squeezed the supply of mid-to-low-end products. For categories such as LPDDR4X/5X, which are essential for consumer electronics and automotive electronics, the supply gap is expanding continuously. The imbalance between supply and demand has become the core contradiction plaguing the industry.
3. Giants Lock in Core Production Capacity; Supply Gap Worsens Further
OpenAI has signed agreements with Samsung and SK Hynix to lock in 900,000 DRAM wafers per month, accounting for 40% of the global total DRAM output—a move that directly monopolizes a large portion of high-end production capacity. To ensure supply chain security, downstream cloud service providers and consumer electronics manufacturers have launched panic buying, creating a vicious cycle of “the more scarce, the more frantic the rush to purchase; the more frantic the rush, the higher the prices”. As a result, the volume of spot supplies circulating in the market is becoming increasingly tight.
III. Future Outlook: No Room for Price Decline, Price Rally Cycle to Lengthen, Shortage Expected to Persist Until 2028
1. AI-Driven Super Cycle: Unbounded Explosive Growth in Demand
Global shipments of AI servers surged 180% year-on-year in 2025, driving a 220% skyrocketing demand for high-end storage products. A single AI server consumes 8 times more DRAM and 3 times more NAND than a conventional server. Moreover, AI is evolving from the training phase to large-scale inference deployment. The “storage-as-compute” technology has elevated storage components to the status of strategic materials for AI applications. Compounded by the fact that automotive storage demand for L3+ autonomous driving vehicles is 10 times higher than that of traditional models, future demand will only keep growing. DRAM demand is projected to rise 26% year-on-year in 2026, while supply will increase by a mere 20%. This supply-demand gap is set to push unit prices up by 58% year-on-year.
2. Ultra-Conservative Capacity Expansion by OEMs: No Quick Fix for Supply Shortfalls
Huge losses incurred during the previous downcycle have made leading original equipment manufacturers extremely cautious about capacity expansion. Samsung has refrained from rapid fab expansion; the new DRAM plant of SK Hynix will not release its capacity until 2028; Micron has even withdrawn from the consumer-grade storage business entirely. Furthermore, the storage chip production ramp-up cycle can take 3–4 years. Existing production capacity is also being redirected toward high-margin premium products, leaving zero room for short-term supply improvement. Industry insiders predict that the shortage situation may persist until 2028.
3. Accelerated Localization Substitution, Yet Gaps Remain Hard to Fill
Domestic players have made notable progress: ChangXin Memory’s LPDDR5X and Yangtze Memory’s 294-layer 3D NAND have achieved mass production with satisfactory yields. Leveraging cost-performance advantages, homegrown storage chips are accelerating market penetration. However, capacity ramp-up and yield stabilization still require time. The overall production scale is not yet sufficient to fully offset the supply void left by the capacity diversion of overseas OEMs. Balancing supply and demand in the mid-to-low-end market cannot be achieved rapidly, resulting in no fundamental basis for price cuts.
IV. Procurement Recommendations for Clients
1. Discard the misconception that “spot availability equals no shortage”. Resist the temptation to wait for potential price drops; lock in long-term supply agreements as soon as possible to avoid cost pressures stemming from continuous price hikes down the line.
2. For mid-to-low-end device requirements, prioritize cost-effective domestic models (e.g., ChangXin Memory’s LPDDR5X). This approach ensures supply stability while controlling costs, and helps mitigate the shortage risks associated with outdated models from overseas original manufacturers.
3. Plan inventory volumes rationally. Based on your own production capacity and order demand, stock up on core chip models in appropriate quantities to prepare for the extreme market scenario of “ample capital but scarce goods” in the future.