Investment bank UBS believes that there is plenty of room for DRAM prices to increase in the third quarter. In a note, the bank outlined that it expects the DRAM memory market to be constrained until the second quarter of 2028. UBS' coverage comes just as market research firm TrendForce outlined that the DRAM market will continue to face severe shortages in the third quarter. However, it added that the impact of high prices on the consumer market and a higher base effect can temper the rate of change in memory prices over the coming months.
DDR Prices Expected To Rise Sharply Compared To DRAM Based On UBS & TrendForce's Estimates
In a fresh note, UBS outlines that its industry checks show that DDR contract pricing is now expected to jump by 32% sequentially in the third quarter compared to its earlier estimate of 17%. In the fourth quarter, the bank expects prices to increase by 18% sequentially compared to the earlier estimate of 12%. The bank adds that specific price changes are expected to differ by the memory product's brand.
UBS also discussed the gap between memory supply and demand. It outlines that demand is expected to grow by 36.2% in 2027, while supply is expected to grow by 19.3%. As for NAND, the bank believes that prices can jump by 30% sequentially in Q3 compared to the 17% earlier estimate.
In the fourth quarter, prices are expected to rise by 12%. Cumulatively, the bank believes that the higher prices can lead to $992 billion in revenue for the memory industry in 2026 and $1.7 billion in 2027. The higher prices will continue to drive hyperscalers to capital markets to fund their projects, says UBS.
While UBS specifically mentions DDR memory prices, TrendForce's research focuses on the broader DRAM market. DDR is a special variant of DRAM that doubles the data transfer speed over the latter. According to TrendForce, DRAM memory prices can rise by 18% sequentially in the third quarter. As for NAND, the firm expects the prices to jump by 15%.
As was the case with UBS, TrendForce also believes that the DRAM market will continue to experience significant supply shortages. The research firm adds that softer consumer demand and higher base prices should control the rate of price increases as well.
Discussing NAND prices, TrendForce comments that, as prices are already at record high levels, buyers are likely to exhibit limited capacity to absorb further NAND price hikes. Using this, the firm remarks that the prices could jump by 15% sequentially.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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