RAM and SSD prices may not ease until new fabs open in 2027 to 2028

How fast are memory prices still rising?

Research firm TrendForce expects contract prices for conventional DRAM to rise 10% to 15% in the fourth quarter compared with the third. DRAM is the working memory in PCs, phones and servers. NAND flash, the storage chips inside SSDs, is forecast to climb 15% to 20%. Contract prices are what big buyers such as PC makers pay chipmakers, and they tend to reach store shelves later.

TrendForce says increases are slowing. PC makers are still buying hard because they expect supply to stay tight in 2027. Enterprise SSDs for AI data centers are the one category where TrendForce expects a bigger jump than last quarter.

Shoppers are already feeling it. In June, IDC forecast that average PC prices would rise 17% this year, and that so many buyers would walk away that fourth quarter shipments would fall by a fifth. Jean Philippe Bouchard, an IDC vice president, didn't soften it: "We're not seeing any relief to the memory shortage situation before the end of 2027".

If that sounds endless, it's worth remembering that memory prices have crashed before, twice since 2017. The 2017 to 2018 boom ended once data center customers had stocked up. In the last three months of 2018, Samsung Electronics watched its DRAM revenue shrink by roughly a quarter, and DRAMeXchange, TrendForce's price tracking unit, expected prices to slide another 20% to 25% in early 2019.

The next bust was worse. After the pandemic buying spree, revenue at Micron (MU) roughly halved to $15.54 billion in fiscal 2023. The company lost $5.83 billion that year, and its gross margin went negative, which means it sold chips for less than they cost to make.

Now compare that with today. In its fiscal fourth quarter alone, Micron brought in $54.23 billion, about three and a half times what it made in all of fiscal 2023, and kept 87 cents of every dollar after the cost of making its chips, on an adjusted basis.

Both busts followed the same pattern: demand cooled just as buyers were overstocked and new supply arrived. That's the combination to watch for.

What's different this time with AI?

The first difference is a type of memory called HBM (high bandwidth memory): stacks of DRAM chips packaged right beside an AI processor. It eats factory space. In 2024, Micron CEO Sanjay Mehrotra said the HBM3E generation uses about three times the wafer supply of standard DDR5 memory to make the same number of bits.

Think of a chip plant as farmland. If one crop needs three acres to match what another grows on one, every field switched to the pricier crop leaves less of the cheap one for everyone else. The cheap crop here is the memory in your laptop.

The second difference is that big buyers have locked in supply. Micron says its "Strategic Customer Agreements" add confidence that its results will last, and TrendForce notes that long term deals keep some server prices below the market average. In theory, that could soften swings in both directions.

Which brings us back to that Sept. 30 call and Micron's bleak outlook for 2027 and 2028. Keep in mind that Micron sells memory, and a shortage is good for its business.

When do the new factories come online?

This is the calendar the chipmakers have given. All of these dates are targets, not guarantees.

The first new capacity is due in early 2027, when Micron's Singapore HBM plant begins initial output. Around the same time, SK Hynix aims to open the first cleanroom at its Yongin campus in South Korea, in February 2027. By the middle of 2027, Micron's first Idaho fab starts wafer output, and its Tongluo, Taiwan site begins meaningful shipments.

The next wave lands in late 2028. That's when Micron's second Idaho fab and its Hiroshima, Japan expansion start output, and Samsung is targeting mass production at its P5 plant in Pyeongtaek in late 2028, Korea JoongAng Daily reported. The longest wait is in New York, where Micron's fab produces its first wafers in 2030.

Two cautions apply. An open cleanroom isn't the same as chips on shelves, because tools still have to be installed and products approved by customers. And much of the new space is meant for HBM: TrendForce expects the share of capacity going to PC memory to keep shrinking in 2027.

Micron expects the industry's DRAM output, measured in bits, to grow in the low 20s percent a year in 2027 and 2028. Analysts quoted by Korea JoongAng Daily in March said meaningful relief would come in the second half of 2027 at the earliest.

So what should you keep an eye on in the meantime? You can't time the cycle, but you can watch the same signals the industry does. TrendForce publishes quarterly contract price forecasts, and those are the prices PC makers pay before costs reach store shelves. When those forecasts turn flat or negative, that's the first sign of a turn.

The other signal is PC demand. IDC expects fourth quarter shipments to slump as higher prices push buyers away. If weak demand starts to leave PC makers holding extra memory, that's how past busts began.

Memory prices have always come back down, and the busts of 2019 and 2023 hit chipmakers hard. This time, though, Micron, TrendForce and IDC all point to tight supply through at least 2027, with new factories arriving between the middle of 2027 and 2028. If history repeats, the turn will come when AI buyers find they've ordered more than they need.

So here's the argument: are AI companies heading for the same overstock that ended the last two memory booms, or is this shortage really different, and does that change whether you buy your next PC now or wait?