The memory market tightens under AI demand
Micron stakes its claim as memory demand surges and pricing climbs.
The global memory market is tightening as surging demand for AI-optimized data centers and high-bandwidth memory helped Micron post record-high stock prices and robust fiscal Q4 earnings. Memory suppliers are implementing price hikes of up to 30%, with Micron withholding new quotes, signaling a shift toward constrained supply, higher production costs, and the likelihood of broader shortages beginning in 2026.
At the same time, IDC reports that the semiconductor market is witnessing an explosion thanks to AI's popularity, with expectations that the market will see revenue reach $800 billion in 2025.
Micron cancels quotations for memory products
Micron is sending a clear message about the increasingly tight memory market. Effective September 12th, the Idaho-based firm suspended all quotations for its DDR4, DDR5, LPDDR4, and LPDDR5 product lines, as well as its broader memory and storage portfolio. The shocking move includes the cancellation of all previously issued contract prices, with no new quotes expected for at least a week. Micron is also reportedly unwilling to discuss long-term contracts for next year.
For a supply chain already on alert, this abrupt pause is a strong signal of constrained availability and aggressive pricing power for suppliers.
The announcement came as Micron’s stock price hit an all-time high on the back of booming demand for high-bandwidth memory (HBM) used in AI inference and training workloads. Analysts have raised price targets accordingly given that both DRAM and NAND products are poised to continue their upward pricing momentum.
Micron’s latest move comes after it has already notified channel partners about a 20% to 30% price hike on DRAM products. Those prices are likely to climb even higher in key sectors like industrial-grade storage and automotive electronics, with some expected to see increases as high as 70%.
TrendForce data suggests that the surge in pricing is not limited to future spot markets. Existing contract customers are also affected, creating widespread uncertainty in planning cycles across consumer electronics and enterprise infrastructure alike.
Sourceability has already received confirmation from key memory vendors that DRAM pricing is up more than 50% week-over-week—a pace not seen since the post-COVID run.
Micron’s decision to withhold new quotations appears to be a strategic response to three converging trends: rising demand for AI-optimized memory, constrained production capacity, and increasing cost pressures across the supply chain. The suspension will allow Micron to reassess its inventory and reprice based on a more favorable supply-demand balance.
For buyers, however, the move carries worrisome implications. Without clear pricing benchmarks and with supply uncertain, procurement teams will need to act quickly to secure allocations and reevaluate their sourcing strategies. Those waiting for stabilization risk being priced out or left without supply entirely. Moreover, while DRAM and NAND memory are in the spotlight, the ripple effects of this supply crunch will likely touch all segments of the electronics market in Q4 and beyond.
Sourceability can help businesses mitigate exposure by locking in supply contracts early where possible and by monitoring real-time pricing trends. We also help buyers optimize their component sourcing strategies through a diverse global network of suppliers to proactively manage cost escalations.
AI causing the memory market shortage
The AI boom is perhaps the most significant driving force in the semiconductor market today. According to IDC’s latest projections, global chip revenue is set to hit $800 billion in 2025, growing 17.6% year-over-year from $680 billion in 2024. That momentum follows last year’s robust 22.4% rebound, driven by both the end of a massive inventory glut and a structural shift prioritizing high-performance compute (HPC).
At the center of this year’s growth lies the accelerating demand for DRAM, NAND, and HBM products. All are critical to supporting large language models, cloud AI inference, and hyperscale data center deployments. As AI becomes more deeply entrenched in edge and enterprise environments, storage density and memory bandwidth are becoming bottlenecks.
Micron isn’t the only vendor acting quickly in response.
SanDisk recently announced a 10% price increase for NAND products. Meanwhile, leading memory suppliers across Asia and the U.S. are notifying channel partners of broader price hikes, sometimes exceeding 50% for DRAM and double digits for NAND components. These increases reflect real shifts in capacity allocation as fabs move to prioritize high-margin, AI-relevant products.
The tightening memory market means that traditional inventory buffer strategies may no longer give OEMs and EMS providers sufficient insulation from lead time volatility.
With supply constraints expected to intensify in 2026, component buyers face a delicate balancing act between over-ordering in anticipation of shortages and absorbing elevated costs in the near term. Panic buying to get ahead of expected shortages and dodge tariff costs further clouds the industry’s ability to forecast pricing and availability for future quarters.
The current environment also carries implications for the wider industry as AI reshapes computing architectures. Even as HPC products swallow the majority of demand, older, commodity-grade memory products remain vital to industrial, automotive, and consumer sectors. Those components now risk falling into shortage as output is reallocated to AI-related products.
Sourceability can help procurement teams navigate this volatility by providing transparency into pricing trends and offering supply chain risk mitigation ahead of 2026 when shortages are expected to bite harder. With memory markets set to remain turbulent, strategic planning today is critical to softening tomorrow’s disruptions.
