Jefferies: memory prices are expected to rise 40%-50% in Q3 2026 and 30%-40% in Q4, as Chinese memory makers are unlikely to provide meaningful near-term relief
Memory prices are all set to rise further in the coming quarters of 2026 as persistent shortages continue to grip the market.
Context & Ripple Effects
The forecast extends a shortage narrative already visible in the coverage: TrendForce expects data centers to absorb more than 70% of 2026 high-end memory output, while little new capacity is expected before 2027. A separate Nikkei Asia estimate puts DRAM supply at only about 60% of demand through 2027.
Earlier reports connected the supply squeeze to sharply higher prices and downstream device pressure. Micron’s outlook signaled the earnings upside for memory producers, while coverage of smartphone manufacturing costs showed how the shortage is shifting the burden to device makers, particularly lower-cost segments.
First-order effects
- Memory buyers face another step-up in procurement costs in the second half of 2026, with Chinese producers not expected to materially loosen near-term supply.
- Incumbent memory suppliers retain unusually strong pricing power, reinforcing the favorable revenue and profit backdrop indicated by Micron’s earlier outlook.
Second-order effects
- Data-center operators’ demand for high-end memory is likely to continue crowding out other buyers, forcing handset and other device makers to manage higher component bills through pricing, product mix, or lower volumes.
- The lack of near-term relief from Chinese suppliers weakens the prospect of a rapid competitive supply response, prolonging pressure on OEMs that depend on broadly available DRAM.
Third-order effects
- If constrained capacity persists into 2027 as earlier coverage suggests, memory availability—not only compute chips—becomes a binding constraint on the pace and economics of data-center and device production.
- The episode points to a more bifurcated memory market: high-value data-center demand can command supply and pricing priority, while consumer-device makers become more exposed to allocation risk and cost volatility.
The trend: This is another data point in the AI/data-center-led reprioritization of semiconductor capacity, in which memory supply is increasingly allocated toward high-end infrastructure ahead of consumer electronics.