The memory shortage is set to grow through 2026

AI demand is actively reshaping today’s memory supply chain. As Samsung, Micron, and SK Hynix prioritize high-margin HBM and advanced memory technologies, legacy and mainstream memory products are becoming harder to secure and increasingly subject to allocation. This isn’t the result of a single disruption, but rather years of converging trends now reaching an inflection point.

Why the memory market is tightening

AI’s insatiable need for compute has forced the entire semiconductor industry to realign priorities, and memory is no exception. The memory supply chain is undergoing a seismic shift as major players reallocate wafer capacity for AI accelerators, squeezing out mainstream products and the OEMs who rely on them.  

Today’s market scarcity is the result of a storm that’s been brewing for some time. Three main influences comprise the swirling winds buffeting the industry.  

1. HBM prioritization is cannibalizing DRAM capacity

The transition toward HBM to support AI expansion has consumed swaths of available production capacity, with major fabs shifting their priorities to serve this demand. As a result, standard DRAM supply is being squeezed, leading to increased lead time variability on once-stable production lines. Manufacturers who need consumer-grade components for PCs, industrial systems, and embedded designs are now being forced to contend with demands from titans in the tech space who are buying out years’ worth of high-margin AI-focused chips.  

2. DDR4’s gradual exit is adding to instability

Adding to the fracas is the fact that memory vendors are preparing to move on from DDR4 well before many systems are ready to follow suit. Samsung shocked the market last summer when it announced EOL plans for its DDR4 products. While a temporary delay to fulfill an existing contract means no formal EOLs have taken place yet, the foreshadowing has already led to a drop in supply.  

This leaves engineers in a difficult spot. Supply is diminishing, but many long-lived designs still depend on DDR4. Without an official lifecycle status, the risk of costly redesigns or surprise last-time buys is a specter haunting OEMs and their product teams.  

3. Margin-first strategy is dominating memory allocation

As memory vendors chase the gains from high-margin AI products, it’s worth remembering we’ve seen this trend before. In the 2010s, they did the same for smartphones and mobile devices. Around 2018, crypto mining became the industry’s focus. Now, AI has become the high-growth, high-margin segment to fawn over.  

While this shift has been painful for most consumers, it’s paying off for the largest memory makers. SK Hynix and Samsung posted higher memory margins than TSMC’s foundry business in late 2025 thanks to DRAM and HBM price spikes. With demand for smartphones and other consumer products falling off, there’s no incentive to shift allocation away from AI chips. This means the rest of the industry will be forced to deal with the fallout.

The ripple effects for procurement and supply chain teams

The dynamics shaping today’s memory market are already being felt in procurement departments across sectors. Lead times are climbing, spot market availability is thin, and even long-term buyers are encountering allocation restrictions.  

As such, the next 18–24 months will require closer coordination between sourcing and engineering than many teams are used to. In this constrained market, mitigating risk starts with understanding that:  

• Pricing volatility is here to stay. DRAM prices surged as much as 60% in 2025, and forecasts suggest another 30-40% rise in 2026, particularly in DDR4 and high-density DDR5. HBM pricing has already reached record highs and is still trending upward as demand outpaces supply. ‍
• Allocation-only ordering is the new norm. Memory makers are increasingly restricting buyers to contracted volumes at the expense of discretionary orders. As spot availability dries up, lead times have been extended from 8–10 weeks to more than 20 in some cases. This has left spot buyers and smaller OEMs scrambling to stay afloat.  ‍
• Obsolescence-driven disruption is more likely. While DDR4 isn’t formally obsolete, slowed production and limited SKUs are pushing many buyers to treat it as such. The pressure of this shift directly impacts BOM stability, program timelines, and cost predictability. Reports of counterfeit DDR4 mislabeled as DDR5 on consumer marketplaces speak to how severe the supply squeeze has become.  

This isn’t the first time memory strategy has reshaped the market

This isn’t the first time memory strategy has been the defining force in electronics market. Surges in smartphone, cloud, and cryptocurrency mining demand in past cycles similarly redirected capacity away from legacy products.

However, this time is different. AI demand is not only larger than past cycles, but also persistent. Generative AI, edge AI, and hyperscale inference workloads are evolving daily and the frenetic pace set over the last two years shows no signs of slowing. Moreover, companies of all sizes are investing their futures in AI, further fueling the cycle.  

Meanwhile, consolidation in the memory market has left supply dynamics in the hands of just a few players. When each of these firms signals similar capacity shifts, and publicly touts record margins from doing so, it’s clear the old equilibrium is no longer in place. When any of the major memory manufacturers changes their strategy, it sends ripples into every downstream market.  

How procurement teams can reduce exposure

Memory shortages may already be here, but there are still proactive steps procurement teams can take to limit their exposure. No single action can fully offset constrained supply, but early intervention and coordinated strategy go a long way to mitigating disruption and reducing long-term costs. Key steps to take as we enter 2026 include:  

• Auditing BOMs for at-risk memory components. Identify where DDR4, low-density DDR5, and other constrained products appear in critical programs and begin mapping transition paths. Waiting for formal EOL announcements is a losing bet in this fast-paced, uncertain market. ‍
• Utilizing multiple sourcing channels. While allocation from franchise suppliers may be locked, authorized independent distributors can often help bridge availability gaps. Vetting authenticity is critical, especially amid rising counterfeit risks, but diversifying your supply chain is no longer optional.  ‍
• Monitor pricing and capacity signals closely. DRAM and HBM market shifts happen quickly, sending unexpected price hikes down the supply chain. Tapping into real-time analytics, such as those available via Datalynq, helps buyers stay ahead of the curve.

Managing the memory crunch

From identifying at-risk memory components to securing allocation-constrained parts and supporting lifecycle transitions, Sourceability helps keep you ahead of disruption. To become aware of your risks and identify the right steps to take to manage upcoming challenges, consider:

• Uploading your BOM into Datalynq to identify risk exposure ‍
• Engaging with a Sourceability expert for lifecycle planning and sourcing support ‍
• Subscribing to the newsletter for ongoing updates on the memory shortage