Podcast Episode
Memory-focused stocks have emerged as major winners entering 2026. SanDisk led the S&P 500 with gains exceeding 60 percent, while Western Digital and Micron Technology ranked among the top performers. Micron reported record revenue and what CEO Sanjay Mehrotra called the company's highest ever free cash flow in its fiscal first quarter.
Samsung Electronics and SK Hynix are reportedly seeking to raise server DRAM prices by up to 70 percent in the first quarter of 2026, which combined with 50 percent increases in 2025 could nearly double prices by mid-2026.
HP executives estimated that rising storage costs would reduce the company's adjusted earnings per share for 2026 by 30 cents. Goldman Sachs analyst Katherine Murphy wrote that HP is the most affected company in her coverage, anticipating that price increases to offset rising memory costs will have a material impact on lower-end PC purchases.
Dell has already implemented price increases of 10 to 30 percent across commercial laptop offerings, with systems featuring 128 gigabytes of RAM seeing hikes of 520 to 765 dollars.
The root cause is AI infrastructure expansion. Memory manufacturers including Samsung, SK Hynix, and Micron have pivoted their limited production capacity toward high-bandwidth memory and enterprise-grade components for hyperscalers like Microsoft, Google, Meta, and Amazon. Every wafer allocated to high-bandwidth memory for AI servers is a wafer denied to consumer smartphones or laptop SSDs.
IDC research manager Jitesh Ubrani told The Register that price stability may not return until late 2027.
HP CEO Enrique Lores warned that memory costs, which account for 15 to 18 percent of a typical PC's cost, would force the company to redesign its product lineup and potentially raise prices in the second half of 2026.
For Android brands targeting mid to low-end segments, rising memory costs will compel them to raise the launch prices of new models in 2026. Low-end smartphone models are likely to return to 4 gigabytes of RAM in 2026, down from 6 or 8 gigabytes in recent years, representing a real step backwards for performance.
While Apple has secured favourable NAND inventory through the first quarter of 2026 and is negotiating better DRAM prices using its size and long-term supplier deals, the company's stock performance reflects broader market concerns about margin pressure in the hardware sector.
Industry analysts warn that the era of constantly getting more memory for less money appears to be over, at least for the foreseeable future, as AI infrastructure demand continues to dominate production capacity allocation decisions by major memory manufacturers.
Memory Chip Price Crisis Squeezes Tech Hardware Manufacturers as AI Demand Soars
January 16, 2026
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A sharp escalation in memory chip prices is squeezing profits at Apple, HP, and other hardware manufacturers in what industry analysts describe as an unprecedented divergence between memory suppliers and the device makers who depend on them. DRAM prices have surged 55 to 60 percent quarter-over-quarter in early 2026, while NAND flash prices have climbed 33 to 40 percent, with some manufacturers facing near doubling of costs by mid-2026.
Record Profits for Memory Makers
Samsung Electronics reported this month that its quarterly operating profit more than tripled to a record 20 trillion won, approximately 13.8 billion dollars, for the October to December period. The windfall was driven by surging demand for memory used in AI data centres. Samsung's results showed DRAM prices surged more than 30 percent quarter-over-quarter in the fourth quarter, with NAND increasing approximately 20 percent.Memory-focused stocks have emerged as major winners entering 2026. SanDisk led the S&P 500 with gains exceeding 60 percent, while Western Digital and Micron Technology ranked among the top performers. Micron reported record revenue and what CEO Sanjay Mehrotra called the company's highest ever free cash flow in its fiscal first quarter.
Samsung Electronics and SK Hynix are reportedly seeking to raise server DRAM prices by up to 70 percent in the first quarter of 2026, which combined with 50 percent increases in 2025 could nearly double prices by mid-2026.
Hardware Makers Face Crisis
For downstream manufacturers, the picture is considerably grimmer. Hardware companies face what technology research firm IDC has characterized as a crisis. Apple's stock declined at the start of 2026 after its weakest annual performance since 2022, rising just 8.6 percent in 2025 and falling 4.2 percent in early 2026. HP shares hit their lowest level since November 2020 after losing nearly a third of their value in 2025 and sinking another 6.8 percent in early 2026.HP executives estimated that rising storage costs would reduce the company's adjusted earnings per share for 2026 by 30 cents. Goldman Sachs analyst Katherine Murphy wrote that HP is the most affected company in her coverage, anticipating that price increases to offset rising memory costs will have a material impact on lower-end PC purchases.
Dell has already implemented price increases of 10 to 30 percent across commercial laptop offerings, with systems featuring 128 gigabytes of RAM seeing hikes of 520 to 765 dollars.
A Structural Shift in Production
IDC's Francisco Jeronimo emphasized that this shortage differs fundamentally from past supply crunches. This time is different, he wrote. It is not merely a cyclical shortage driven by supply-demand mismatches but a potential permanent strategic reallocation of global silicon wafer capacity.The root cause is AI infrastructure expansion. Memory manufacturers including Samsung, SK Hynix, and Micron have pivoted their limited production capacity toward high-bandwidth memory and enterprise-grade components for hyperscalers like Microsoft, Google, Meta, and Amazon. Every wafer allocated to high-bandwidth memory for AI servers is a wafer denied to consumer smartphones or laptop SSDs.
IDC research manager Jitesh Ubrani told The Register that price stability may not return until late 2027.
Painful Choices for Device Manufacturers
Hardware makers now confront a difficult decision: absorb costs, raise prices, or reduce specifications. Nothing CEO Carl Pei stated this week that brands face a simple choice: raise prices, by 30 percent or more in some cases, or downgrade specs. He confirmed Nothing would inevitably increase prices across its smartphone portfolio.HP CEO Enrique Lores warned that memory costs, which account for 15 to 18 percent of a typical PC's cost, would force the company to redesign its product lineup and potentially raise prices in the second half of 2026.
For Android brands targeting mid to low-end segments, rising memory costs will compel them to raise the launch prices of new models in 2026. Low-end smartphone models are likely to return to 4 gigabytes of RAM in 2026, down from 6 or 8 gigabytes in recent years, representing a real step backwards for performance.
Even Apple Not Immune
Even Apple, with its superior negotiating leverage and long-term supplier relationships, is not immune to the price surge. Paul Meeks of Freedom Capital Markets noted that the magnitude of the increase in storage component costs will be large enough to impact even a company of Apple's scale. Morgan Stanley analysts reported that Apple may face DRAM price increases exceeding 50 percent to secure sufficient supply.While Apple has secured favourable NAND inventory through the first quarter of 2026 and is negotiating better DRAM prices using its size and long-term supplier deals, the company's stock performance reflects broader market concerns about margin pressure in the hardware sector.
Consumer Impact
The memory price surge is expected to have significant impacts on consumers throughout 2026 and potentially into 2027. Prices for laptops, smartphones, and other devices containing memory chips are likely to rise substantially, particularly in the budget and mid-range segments. Consumers may also see devices with reduced specifications, such as less RAM or smaller storage capacities, as manufacturers attempt to control costs.Industry analysts warn that the era of constantly getting more memory for less money appears to be over, at least for the foreseeable future, as AI infrastructure demand continues to dominate production capacity allocation decisions by major memory manufacturers.
Published January 16, 2026 at 12:45am
