As the rapid buildout of AI infrastructure continues to consume massive volumes of advanced memory, corporate IT departments and OEMs are confronting a crippling structural shortage of DRAM and NAND flash components.
This crisis has made enterprise budgets unpredictable, yet it has also brought record profits to the world’s top memory manufacturers.
Margin boom for memory makers
Driven by explosive demand from cloud service providers for enterprise solid-state drives and high-capacity memory, top-tier semiconductor companies are reporting historic revenue growth.
In the first quarter of 2026, market research firm TrendForce said the top five global NAND flash suppliers saw their combined revenue jump 83.7% from the previous quarter, reaching over $38.9 billion. This growth is driven primarily by higher prices resulting from the shortage, rather than by increased production.
View All According to TrendForce, Samsung maintained its market lead during this period, reporting $13.51 billion in NAND flash revenue, a 104.7% increase from the previous quarter. SK Hynix and Kioxia also saw big gains, with their revenues rising by 44.6% and 80%, respectively.
Micron Technology and SanDisk shared fourth place in market share, and both saw their revenues rise 96.7% from the previous quarter. By focusing on high-value, high-capacity products for businesses, these companies have protected their profits, even though higher costs have slowed down demand for smartphones and personal computers.
Navigating the supply squeeze
For corporate buyers and equipment makers, these high profits for manufacturers mean it is much harder to buy what they need. According to Gartner, in the first half of 2026, memory prices have increased by 50% to 200%, driving server costs up by more than 125%. Because of the shortage, equipment makers have had to change or even cancel server setups that need a lot of memory.
In an email exchange with EE Times, James Smith, senior director analyst at Gartner, warned that regular negotiation tactics no longer work for corporate IT buyers. Vendors now issue price quotes valid for only a week, and many can raise hardware prices right up until they ship the products.
To handle this unstable market, Smith recommended that companies change how they buy memory. Even though the shortage may last until at least 2027, he warned against panic buying or signing strict contracts.
“The real risk is turning a forecast into a fixed take-or-pay commitment before the market settles,” Smith said. “In our research, we recommend building 12- to 24-month demand forecasts, not locking buyers into long-term purchase commitments.”
If buyers start discussions early and share updated forecasts with suppliers, they can give vendors the information they need without locking themselves into high prices. Companies should make actual purchase commitments monthly or quarterly, rather than annually. “Our recommendation is to signal demand early, stay close to suppliers, and preserve flexibility until supply and pricing become more predictable,” Smith added.
Immediate production relief is an illusion
Even though memory manufacturers are investing heavily, there is no quick fix for the supply shortage. TrendForce analysts said that major NAND flash suppliers will not add much new production capacity in 2026. Instead, they are using their current resources for the most profitable server storage products.
Well-publicized expansions of domestic manufacturing are aimed at long-term changes, not at quickly increasing supply. Micron Technology recently started making its 1-alpha DRAM at its Fab 6 facility in Manassas, Virginia, which federal lawmakers praised as a win for U.S. supply chain security.
Micron said its $2 billion expansion in Virginia will eventually enable it to quadruple DDR4 memory production in the U.S., but industry analysts pointed out that this is really just shifting capacity around the world.
TrendForce research shows that Micron is moving its older memory production from Taiwan to Virginia to serve industries such as defense and automotive, as well as other long-term uses. This change lets Micron’s Taiwan factories focus only on making the newer DDR5 and high-bandwidth memory (HBM) needed for AI.
As a result, the total global supply of standard LPDDR4 and DDR4 memory will stay about the same, so the shortage is likely to continue.
Addressing these industry developments, Smith noted that buyers must manage their expectations. “The supplier investments now underway are positive, but they do not automatically mean broad near-term relief,” Smith explained.
Prioritizing workloads and sourcing
Since new hardware is still hard to find and costly, IT supply chain leaders have to reconsider when to upgrade and explore other ways to obtain equipment. Gartner suggests delaying non-essential purchases and using the secondary market, such as leasing devices that can have their memory upgraded. Because older hardware from the secondary market cannot meet the performance demands driving the AI boom, Smith emphasized the need for strict workload triage.
“Fundamentally, yes, reliance on the secondary hardware market can contradict the performance demands driving the current AI boom,” Smith explained. “But for most organizations, that is not the whole story.” He clarified that standard end-user computing and core operational tasks do not strictly require premium, AI-ready infrastructure.
“Older servers, especially those that can take memory upgrades, can still support lower-priority and keep-the-lights-on workloads,” Smith noted. “That is not a contradiction so much as a prioritization strategy to reserve premium infrastructure for workloads that genuinely need it.”
Cloud pricing pass-throughs are not the solution
The financial ripple effects of the hardware shortage are now extending beyond physical servers and into software and cloud services. As data center infrastructure costs rise, software-as-a-service and infrastructure-as-a-service providers are beginning to pass these costs on to their enterprise customers.
However, Smith insisted that supply chain leaders must aggressively scrutinize these rate hikes. “Vendors should not be allowed to blame the economy and expect customers to simply accept higher prices,” Smith argued. He advised corporate buyers to demand empirical evidence that their specific usage or workload profile has materially changed, rather than accepting price hikes based on the vendor’s hypothetical future capacity expansions.
“Resistance isn’t refusal; it is just challenging the vendor to justify their demands,” Smith said. “If the workload is essentially unchanged, customers should resist footing the bill for broader market shifts or for investments that primarily benefit other customers.”
In the end, enterprise buyers need to stay flexible and cautious to handle the current memory market. Since supply problems may last through 2027 and manufacturers are benefiting from the shortage, business leaders should focus on careful forecasting, clear workload priorities, and strong negotiation to get through this crisis.
See also:
[LPDDR6 Roadmap Leads to the Data Center](https://www.eetimes.com/lpddr6-roadmap-leads-to-the-data-center/)
[Automakers Face Memory Shock as AI Uses Up Semiconductor Supply](https://www.eetimes.com/automakers-face-memory-shock-as-ai-uses-up-semiconductor-supply/)
[Geopolitics Is Rewriting Memory Sourcing](https://www.eetimes.com/geopolitics-is-rewriting-memory-sourcing/)