Source: Compiled and translated from wccftech

The memory sector has now become a classic portrait of a hysterical Victorian lady in Britain. Take the DRAM (Dynamic Random-Access Memory) market for example: a slight drop in spot prices triggers reactions ranging from doomsday market predictions to sharp stock price plunges. Yet industry giants like Samsung remain calm, seemingly intent on raising prices step by step.

According to South Korean media ETNews, Samsung is currently charging a quarter-on-quarter premium of approximately 30% for its DRAM products. More importantly, this price hike comes hot on the heels of a 100% year-on-year average price increase in the first quarter of 2026.

It should be noted that Samsung’s recent 30% price rise represents the average increase across a wide range of DRAM products, including high-bandwidth memory (HBM) for artificial intelligence, as well as general-purpose DRAM for servers, PCs and smartphones.

This means that if a DRAM chip from Samsung cost 10,000 Korean won in early 2025, it would have been priced at 20,000 won by the first quarter of 2026, and now retails for 26,000 won.

Furthermore, now that Samsung appears to have raised prices, SK Hynix and Micron are expected to follow suit with inflationary pricing for their DRAM products, which will debunk the ongoing narrative of a collapse in DRAM commodity prices.

Admittedly, prices for older DDR4 chips are indeed under pressure at present. However, this is largely due to panic selling of hoarded inventories rather than a systemic collapse in demand. According to DRAMeXchange data, the average fixed contract price of PC DRAM (DDR4 8Gb) remained flat month-on-month as of the end of March.

In addition, SemiAnalysis reports that LPDDR5 contract prices have tripled since the first quarter of 2025, currently hovering around $10 per GB, with double-digit percentage growth projected for 2027.

This implies that the situation in the smartphone segment will only deteriorate further. As we recently noted, DRAM costs now account for 35% of the bill of materials (BOM) for entry-level smartphones, while NAND flash costs make up another 19%. Combined, these two components account for a staggering 54% of the total cost of entry-level smartphones.

Memory Giants Scramble to Secure Supply

Amid cries of a declining memory industry, supply chain reports reveal that hyperscale data center operators are signing long-term contracts with suppliers to guarantee stable supply.

The memory market has entered an intriguing phase over the past few weeks. Widespread panic has emerged among retailers and certain supply chain players, who believe the launch of Google’s TurboQuant compression algorithm will bring an end to the memory supercycle. This has not only triggered a sharp decline in memory stock valuations but also pushed down DDR5 memory prices at global retailers. However, a supply chain report by Hanwha Group notes that the demand cycle is far from over; on the contrary, hyperscale data center operators such as Google and Microsoft are rushing to sign long-term agreements with SK Hynix that will extend through the end of the decade.

Industry insiders revealed on the 5th that negotiations between SK Hynix and Microsoft over a long-term DDR5 supply contract have entered the final stage. Valued at several trillion Korean won, the contract will take effect this year and span three years.

We previously discussed the rise of long-term supply agreements in the memory industry, but at that time assumed the trend was limited to Samsung. Today, however, SK Hynix is also pursuing similar partnership opportunities, indicating two key factors shaping overall memory demand. First, by signing three-year contracts, suppliers are effectively securing sustained demand in the coming quarters, aiding their expansion planning and revenue growth. Second, these three-year deals indirectly suggest that the memory cycle, originally expected to end in 2028, may be extended even further.

The report states that hyperscale data center operators are not concerned about signing memory agreements that could pose risks in the future; instead, their top priority is securing sufficient DRAM to support infrastructure development. We noted in a recent report that memory costs alone account for more than 30% of total expenditures for hyperscale data center operators, demonstrating that DRAM is not only a critical commodity for these firms but also one they are willing to “go all in” to secure supply for. The memory market is fundamentally not a price war, but a supply war — the party controlling DRAM supply will ultimately prevail.

The implementation of these long-term contracts is by no means good news for the consumer PC industry, as they not only cut off access to future incremental capacity but also extend the demand cycle, potentially signaling indirectly that prices will remain elevated for years to come. From this perspective alone, near-term boosts such as TurboQuant may be among the few factors that could pull DDR5 prices lower, but at a macro level, both spot and contract DRAM prices are set to rise sharply.

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