The price of computer memory has risen further and faster than almost any other manufactured component in living memory. DRAM prices have climbed around 171 per cent year on year, DDR5 spot prices have roughly quadrupled since September 2025, and J.P. Morgan Global Research estimates DRAM will have risen more than 400 per cent between the start of 2024 and the end of this year.

The shortage has been called RAMmageddon in the trade press. It is not caused by a factory fire, an earthquake or a pandemic. It is a deliberate allocation decision, repeated across an industry of three dominant firms.

The mechanism, in one paragraph

Memory is made on wafers, and a fab’s capacity is finite. AI accelerators use High Bandwidth Memory — HBM — which consumes roughly three times the wafer capacity per unit of storage that conventional DDR5 does. As manufacturers signed long-term contracts with AI infrastructure buyers, they shifted wafer capacity to HBM. Every wafer that goes to HBM is a wafer that does not become memory for laptops, phones, cars or servers. The supply of conventional DDR4 and DDR5 contracted sharply as a direct arithmetic consequence.

The reported figures fill in the scale. A single AI server uses eight to ten times the DRAM of a traditional server. The three major manufacturers have reportedly allocated more than 80 per cent of advanced process capacity to AI servers. SK Hynix said its HBM, DRAM and NAND capacity was essentially sold out for 2026; Micron exited the consumer memory market to concentrate on enterprise and AI customers.

Who pays

Analysts project consumer electronics prices rising by up to 20 per cent, the global PC market contracting by around 9 per cent and smartphone sales falling around 5 per cent this year. Samsung raised the price of a 32GB DDR5 module from $149 to $239 in a single month.

The distribution matters more than the averages. Firms with vertical integration or long-term supply agreements are insulated; small manufacturers buying on the spot market are not. The same applies to buyers: a hyperscaler passes memory costs to enterprise customers, while a school district replacing laptops simply buys fewer. This is a regressive price shock dressed as a technical supply issue.

The automotive industry is the slower-moving exposure. Modern vehicles use DRAM in driver assistance, infotainment and core electronic architecture, and they rely on legacy memory types whose production lines are being retired. Analysts see a realistic possibility of production disruption by 2028.

Why it cannot be fixed quickly

New capacity takes years. Micron broke ground on a $9.3 billion memory fab in July 2026; production is expected to begin in the third quarter of 2028. That is the honest timeline for adding supply, and it is why IDC expects the crunch to persist well into 2027.

There is also a reason manufacturers are cautious about building. Memory is the most brutally cyclical business in semiconductors: capacity added at a peak has repeatedly arrived into a glut, and the firms making today’s allocation decisions have all lost money that way before. Their reluctance is rational even though it prolongs the shortage — which is the standard case for public coordination in a market with three suppliers and enormous fixed costs, and equally the standard argument against, since governments have subsidised chip capacity into gluts as well.

The part that is not about laptops

Defence systems — aircraft, satellite communications, missile guidance — draw on the same memory supply chains. Analysts have noted that a Taiwan Strait contingency or sabotage of key facilities would simultaneously disrupt civilian electronics and military readiness across allied nations, and that export controls on HBM and countermeasures on critical minerals are already fragmenting the supply base.

Which is the underreported half of this story. A commercial allocation decision, made for entirely ordinary business reasons, has quietly become a matter of industrial strategy in a dozen countries.

Sources

• J.P. Morgan Global Research, on DRAM prices and the AI-driven memory shortage, August 2026
• IDC, “Global Memory Shortage Crisis”, 2026
• Counterpoint Research and TrendForce price and supply data, 2025-2026
• Bloomberg interview with Samsung’s Wonjin Lee; SK Hynix and Micron company statements
• Bloomsbury Intelligence and Security Institute, “Global RAM Shortage and Price Hikes”, January 2026