Memory Prices to Keep Rising in Third Quarter, but PC and Smartphone Weakness Slows Gains

DRAM contract prices seen rising 13% to 18% in the third quarter

NAND flash prices projected to gain 10% to 15%

Double-digit increases set to continue, but at a slower pace

Consumer-market strain puts a brake on further price gains

Memory-chip prices are poised to keep rising in the third quarter as demand from artificial intelligence servers and hyperscale data centers continues to strain supply. The steep gains of recent quarters, however, are set to ease as PC and smartphone makers reach the limit of what they can absorb in higher costs.

TrendForce said in a report, cited by Tom's Hardware on July 4, that conventional DRAM contract prices will rise 13% to 18% from the previous quarter in the third quarter. Contract prices for NAND flash are projected to increase 10% to 15%. That would mark another quarter of double-digit gains, though well below the roughly 60% jump in the second quarter.

The slower pace of increases does not mean supply has become plentiful. TrendForce cited mounting pressure on consumer-electronics manufacturers after months of memory price hikes. Supply remains tight, but the ability to pass those costs through in end markets such as PCs and smartphones is nearing its limit.

AI remains at the center of the memory market. Demand from AI inference systems and large data centers continues to tighten DRAM and NAND supply. Memory makers are also prioritizing production capacity for higher-margin server products. As a result, softer PC and smartphone demand has not translated into ample supply for consumer memory.

The market is increasingly split between enterprise and consumer demand. Server DRAM is set to remain in short supply in the third quarter. Some volumes are tied up in long-term supply contracts, which should temper the pace of price gains. TrendForce said AI server deployments based on x86 processors and RDIMMs should remain solid into next year as CPU supply improves.

The consumer market, by contrast, is under growing pressure. Laptop makers are expected to keep replenishing inventories, but higher memory costs are starting to feed through into product prices. TrendForce said that could weigh on PC shipments for the rest of the year.

Smartphone makers face similar pressure. With prices for low-power DRAM, or LPDDR, staying elevated, many manufacturers are considering raising handset prices. At the same time, weakening consumer demand is likely to make them more cautious about production plans.

The same pattern is emerging in storage. PC makers built up substantial inventories of client SSDs in the first half of the year. That has weakened their willingness to accept further price increases. Suppliers have also become more flexible in contract negotiations, helping restrain gains in SSD prices. Enterprise storage, however, continues to benefit from investment in AI infrastructure.

Graphics memory and retail products remain relatively weak. TrendForce said Nvidia's RTX PRO 6000 Blackwell has yet to generate as much GDDR7 demand as hoped. Weak laptop shipments were also cited as a drag on graphics-memory demand. Retail products such as USB flash drives and memory cards are also struggling because vendors have limited room to pass higher upstream costs on to consumers.

For PC builders, a near-term drop in prices still appears unlikely. With AI infrastructure remaining the memory industry's top supply priority, DRAM and NAND prices are set to keep rising. Even so, the pace of those increases is expected to slow as the burden on the consumer market nears its limit.

Kim Dae-young, Hankyung.com reporter kdy@hankyung.com