As AI-driven demand for high bandwidth memory (HBM) shows no sign of abating, the market forces are now exercising their influence to correct this imbalance, and smartphone-critical LPDDR5X prices are set to explode as a result.
TrendForce has raised its general DRAM price forecast for Q4, which affects smartphone-critical LPDDR5X as well
We noted recently that the soaring demand for HBM within datacenter servers was tightening available wafer capacity, especially as the die size for HBM is between 35 percent and 45 percent larger than that for a comparable DRAM.
Well, as per a new TrendForce report, this paradigm is now at the mercy of market forces, which are bent on balancing the market via demand destruction.
Specifically, TrendForce notes:
- DRAM contract prices continue to increase as global cloud service providers (CSPs) pursue expansion and increase orders.
- "TrendForce has accordingly revised its 4Q25 outlook for conventional DRAM pricing upward, from an earlier forecast of 8–13% growth to 18–23%, with a strong likelihood of further upward revision."
- Global server shipments will grow by 4 percent year-over-year in 2026.
- CSPs are rapidly upgrading to high-performance computing (HPC) platforms, pushing "overall DRAM bit demand beyond prior expectations" and extending "the structural supply shortage."
- DDR5 contract prices are expected to maintain an "upward trajectory throughout 2026," especially in H1.
- HBM contract prices are expected to shift into year-over-year decline in 2026, as increased competition and healthy inventory levels for HBM3e take their toll.
- As of Q2 2025, HBM3e commanded a 4x price premium over DDR5.
- By Q1 2026, DDR5 profitability will surpass that of HBM3e.
We noted recently that high demand for HBM was squeezing out the production capacity for DDR5, leading to stretched delivery times of between 26 and 39 weeks.
Today's report from TrendForce aligns with the thesis that could be drawn from DDR5's stretched delivery times that we reported on earlier in the week.
Moreover, this echoes the claims of Xiaomi's President, Lu Weibing, who recently noted in a Weibo post that Xiaomi "cannot change the trend of global supply chains, and the rise in storage costs is much higher than expected and will continue to increase."
The current situation is already pressuring the margins of SoC manufacturers like MediaTek, which is about to switch to the 2nm node at a time when TSMC is reportedly charging as much as $30,000 for a single 2nm wafer.
For the benefit of those who might not be aware, LPDDR5X is a high-performance, low-power version of standard Dynamic Random Access Memory (DRAM) that is typically used in smartphones, tablets, and thin laptops. As such, the factors that are affecting the broader DRAM market are also applicable to LPDDR5X, creating an emerging headache for smartphone OEMs like Xiaomi and Samsung, which are also considering increasing the prices of their smartphones next year.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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