Memory makers are enjoying a huge boost to revenue as AI demand has earned them more in a single quarter than the entire previous year.
Memory makers such as ADATA saw a 17x Annual Growth In Profits, Others Also Seeing Similar Boost From AI Boom
The AI crunch continues to devastate the consumer markets as component prices go up; at the same time, memory makers are seeing an astronomical rise in their profit margins.
So there are two things to factor here, first is that memory demand is at an all-time high due to AI firms requiring more DRAM for their servers. The second is that since memory is in short supply, vendors have raised the prices of their memory products significantly.
This has resulted in five memory makers seeing big profit bumps. ADATA is one of these memory makers that reported a profit increase of 17x versus the previous year, and gross margins hitting 55.69%. Other memory makers such as Macronix, Apacer, Team Group, and Nanya Tech, also saw record revenue figures and boosted margins.
Chen Libai (ADATA Chairman) stated that the first quarter's performance is only the starting point for the year's operations, and the market has entered a new normal of long-term tight supply. As manufacturers gradually adjust their product structures, the supply of DDR4 and DDR5 is converging, coupled with the continued shortage of high bandwidth memory (HBM), the DRAM market is unlikely to ease in the short term, and price and demand momentum are expected to continue.
Machine Translated via Commercial Times
According to ADATA's Chairman, the Q1 results are a reflection of what to expect as the memory market enters "a new normal of long-term, tight supply".
We recently reported how Macronix has taken over the low-end DRAM market left over by Samsung. As bigger DRAM makers move to high-end products, smaller yet still sizable companies are taking over the task of producing old memory technologies that are still relevant and in demand.
DRAM or NAND, All Short In Supply
And it's not just DRAM, NAND flash is also on the rise with demand for SSDs and eSSDs rising, leading to a higher supply. ADATA says that they have stockpiled sufficient NAND wafers, but given the rising compute demands we have seen over the past few weeks, nothing is sufficient. To make matters worse, Samsung is expected to face up to 4% DRAM and NAND output disruption with the upcoming 18-Day labor strike, further stressing the supply chain.
Furthermore, memory and storage makers have already alerted partners of a 40% price hike around the second quarter of 2026. So yeah, more profits for memory makers, and higher prices across consumer products for the rest of us.
News Source: Commercial Times
About the author: A Software Engineer by training and a PC enthusiast by passion, Hassan Mujtaba serves as Wccftech's Senior Editor for hardware section. With years of experience in the industry, he specializes in deep-dive technical analysis of next-generation CPU and GPU architectures, motherboards, and cooling solutions. His work involves not only breaking news on upcoming technologies but also extensive hands-on reviews and benchmarking.
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